The Reserve Bank of India released the draft Foreign Exchange Management (Foreign Investment) Rules, 2026 on 21 July 2026. The draft proposes to replace the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 entirely with what is described as a simplified, principle-based framework for foreign direct investment and foreign portfolio investment. Comments were invited until 31 August 2026.
Why it matters
The NDI Rules, 2019 sit at the centre of the FEMA framework for foreign investment in Indian companies, LLPs and other instruments. A full replacement will change the structure and wording that advisers, banks and investors have relied on since 2019.
Status
A compliance tracker last updated on 10 October 2026 still lists the draft under rules open for comment and shows no notice of finalisation. That does not confirm that the draft remains pending. The current status should be checked on the RBI’s FEMA notifications page.
Other FEMA items listed in the same period
- FEMA 395(4)/2026-RB, which amends the permitted payment modes for NRI and OCI investments in non-debt instruments.
- The Sixth Amendment to the Deposit Regulations, which concerns SNRR accounts.
Points for NRIs and OCIs
- The summary reviewed does not address the acquisition or transfer of immovable property by NRIs and OCIs. Do not assume any change to property purchase or sale rules until the final text is read.
- Review how your existing investments and accounts are structured, and keep NRE, NRO and SNRR funds separate.
- Seek advice before any new investment or remittance that depends on the 2019 provisions.
This update is for general information and is not legal advice. Please consult a qualified advocate before acting on any development discussed here. Apex Law Office LLP.
