India Union Budget 2026–27 – India’s Commitment to Attract Larger Foreign Investment

The proposed Union Budget 2026-27 (‘Budget’) reinforces Government of India’s commitment to attract larger Foreign Direct Investment (‘FDI’) by removing regulatory barriers, streamlining processes, developing infrastructure, bettering logistics and improving the business environment by enhancing the Ease of Doing Business (‘EoDB’).

Budget highlights:

1. The investment limit for an Individual Person Resident Outside India (‘PROIs’) under the Portfolio Investment Scheme is proposed to be increased from 5 percent to 10 percent. Further, the overall investment limit for all such individual PROIs is proposed to be enhanced from 10 percent to 24 percent. Resultantly, overseas investors will be able to take higher equity exposure in Indian listed companies.

2. Review of Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 to make it simpler and more foreign investor friendly, thereby, reducing compliance and regulatory norms for foreign investors.

3. To boost investment in Information Technology (‘IT’) sectors in India, foreign companies providing cloud services by setting up data centres in the India will be exempted from paying tax till 2047 (tax holiday). This move makes it more cost-effective for foreign cloud service providers and further boosts foreign invest in Indian’s IT sectors.

4. FDI limit for the insurance sector will be increased from 74% (seventy four percent) to 100% (one hundred percent) for the companies investing entire premium in India.

5. Procedures and compliance requirements under the Indian merger regime will be rationalized for speedy approvals.

These are preliminary proposals under the Union Budget 2026–2027. Further clarity on implementation, timelines and operational details is expected in the coming months.