Foreign Investors Can Now Buy Equity In Listed Indian Companies, But There Is A Catch

Last updated: February 1, 2026 12:39 pm

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Anand Kumar is a Senior Journalist at Global India Broadcast News, covering national affairs, education, and digital media. He focuses on fact-based reporting and in-depth analysis...

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Finance Minister Nirmala Sitharaman on Sunday expanded investment opportunities in India for foreign investors, offering them a new avenue to buy Indian stocks.

Sitharaman proposed a market-making framework with appropriate access to funds and derivatives on corporate bond indices. (Parliament TV)To attract global investors to the country and increase liquidity in the secondary market, Sitharaman proposed a market-making framework with appropriate access to funds and derivatives on corporate bond indices.

More importantly, the Finance Minister in his speech for the Union Budget 2026 said that all Individuals of Indian Origin (PIOs) will now be allowed to invest in equity instruments and listed Indian companies through the Portfolio Investment Scheme.

Sitharaman also proposed raising the investment limit for an individual PIO from 5 percent to 10 percent.

Tax holiday for foreign companies providing global cloud services with Indian data centers in IndiaUnion Budget 2026 allows tax holiday till 2047 for foreign companies providing cloud services to global customers using data centers in India.

Sitharaman said, “I propose to give a tax holiday till 2047 to any foreign company that provides cloud services to global customers using data centers located in India. However, the finance minister said such companies will have to provide cloud services to Indian customers through an Indian reseller entity.”

Apart from this, Sitharaman proposed a safe harbor provision of 15 per cent cost for companies related to Indian companies operating data centres.

Foreign Assets Disclosure SchemeDuring the Union Budget speech, the Finance Minister proposed a six-month foreign asset disclosure scheme for small taxpayers including students, technology professionals and relocating NRIs.

Sitharaman announced that irrespective of the outcome, no interest would be levied on the penalty amount for the taxpayers for the period of appeal before the first appellate authority. The Finance Minister announced a three-year exemption for dividend income received by notified cooperatives on investments made up to January 31, 2026.