Union Budget 2026 Unveils Strategic Capital Market Liberalization: PIO Investment Cap Doubled to 10%

In a landmark policy shift announced during the Union Budget 2026 presentation, Finance Minister Nirmala Sitharaman has authorized Persons of Indian Origin (PIO) to directly invest in listed Indian companies, marking a significant liberalization of India's capital markets. The strategic move doubles the permissible investment limit from 5% to 10%, a calculated effort to deepen market liquidity and attract long-term foreign capital anchored by diaspora connections. This intelligence assessment indicates the policy is designed to leverage the substantial financial capacity and inherent affinity of the global Indian diaspora, channeling it into domestic equities. Analysts project this will enhance price discovery, reduce volatility, and provide listed firms with a more stable, culturally-aligned investor base. The reform aligns with broader governmental initiatives to position India as a premier global investment destination by systematically easing capital controls. It signals confidence in the maturity of India's regulatory frameworks to manage increased foreign portfolio investment while safeguarding national economic interests. The calibrated increase suggests a phased approach to further financial integration, with the PIO community serving as a strategic conduit for sustainable capital inflows.