India set to double the investment limit for foreign individuals to 10%: Report

According to two senior government officials and documents Reuters examined, India's central bank plans to double to 10% a restriction on individual foreign investors' investments in listed companies in an effort to increase capital inflows. Since the benchmark NSE Nifty 50 reached a record high in September, foreign portfolio investors (FPIs) have taken more than $28 billion out of Indian stocks due to pressure from low results, high valuations, and the possibility of U.S. tariffs.

According to the officials, India is increasing the applicable investment limits and extending to all foreign investors the perks that were previously only available to Indians living abroad in order to encourage international investment.

In a letter to the government last week, the central bank stated, "It is felt that these proposals may be implemented as early as possible," citing recent external sector events that have disrupted capital inflows. The central bank, the finance ministry, and the Securities and Exchange Board of India (SEBI), which oversees the market, did not respond to emails requesting comment.