RBI Proposes Simplified FDI Rules

The State Bank of India (RBI) on July 22, 2026 released draft Foreign Exchange Management (Foreign Investment) Rules, 2026, proposing a simplified and principle-based regulatory framework for foreign direct investment (FDI) compliance. The move follows the Union Budget 2026-27 announcement for a comprehensive review of the existing Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules). Key features include rationalization of provisions, harmonization of definitions, clear demarcation of procedural FEMA provisions from policy and sector-specific requirements, and broadening of eligible investee entities to include REITs, InvITs, AIFs, venture capital funds, mutual funds, ETFs, partnership firms, and proprietary concerns. The draft rules aim to reduce compliance burden, enhance clarity, and promote ease of doing business. Public comments are invited until August 31, 2026.