Description

On 21 July 2026, the RBI released the draft Foreign Exchange Management (Foreign Investment) Rules, 2026—proposing an overhaul of the existing NDI Rules framework. The new draft Foreign Investment Rules mark a move from an instrument-centric regime to a transaction-focused framework with harmonized reading of FDI policy.

Key changes include:

• Expanded scope of eligible investee entities (now covering partnerships and proprietary concerns)
• Clearer definition of Foreign Controlled Entities (FCE)
• Reference to sector specific definition of ‘ownership and control’
• Removal of ceiling/floor criteria for valuation and price determination
• Relaxed compliance for rights/bonus issue
• Direct international listing pathway for Indian public companies

Timeline: The last date for submitting comments/feedback to RBI on the draft rules is 31 August 2026.

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