Union Budget 2026-27 LIVE: FM proposes Comprehensive Review FEMA (Non-debt Instruments Rules)

The Union Budget for the Financial Year 2026-27 was presented by Finance MinisterNirmala Sitharaman in the Lok Sabha today (Sunday, 1 February 2026). This is her 9th consecutive budget.

The FM has proposed a comprehensive review of the FEMA (Non-debt Instruments Rules). This budget was inspired by 3 Karvtavyas.

The minister said that “I propose a comprehensive review of the FEMA (Non-debt Instruments Rules) to create a more contemporary, user friendly framework for foreign investments consistent with India’s evolving economic priorities”.

Let AI handle GST returns, notices, and litigation - Click Here to know more

The FEMA (Non-Debt Instruments) Rules presently govern foreign investments in equity instruments, convertible securities, and other ownership-linked investments in Indian entities. Over the years, these rules have been amended multiple times to liberalise sectoral caps, simplify entry routes, and clarify pricing and reporting norms.

For foreign investors, private equity funds, venture capital players, and Indian companies receiving overseas investments, the proposed review signals procedural simplification and regulatory clarity in the near future.

The FM also proposed to introduce a market making framework with suitable access to funds and derivatives on corporate bonds. To encourage the issuance of municipal bonds of higher value by larger cities, FM also proposed an incentive of Rs. 100 crores for a single bond issuance.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates