RBI proposes simpler FDI compliance regime, seeks stakeholders comments

MUMBAI: The Reserve Bank of India (RBI) on Tuesday released draft Foreign Exchange Management (Foreign Investment) Rules, 2026, proposing a simplified and principle-based regulatory framework for foreign direct investment (FDI) compliance, and invited comments from stakeholders by August 31.

The central bank said the move follows the Union Budget 2026-27 announcement of a comprehensive review of the existing Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (NDI Rules) to create a more contemporary and user-friendly framework for foreign investments.

According to the RBI, the proposed framework aims to simplify regulations while aligning them with the government’s FDI policy and evolving business practices.

विदेशी मुद्रा प्रबंधन (गैर-ऋण लिखत) नियम, 2019 का युक्तिकरण-टिप्पणियों हेतु नियमों का मसौदा
Rationalisation of Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 – Draft Rules for Commentshttps://t.co/5paTovBQvu

— ReserveBankOfIndia (@RBI) July 21, 2026

Highlighting the key features of the draft rules, the RBI said they provide a “Simplified and principle-based framework: Rationalization of provisions, harmonization of definitions and a simplified regulatory architecture to enhance clarity and reduce regulatory complexity.”

The draft also seeks to improve regulatory consistency by ensuring “Clear demarcation of procedural FEMA provisions from policy and sector-specific requirements, improving regulatory coherence and facilitating timely policy changes.”

Further, the RBI said the proposed rules are designed to promote ease of doing business through “Streamlined procedures, reduced compliance burden and greater operational flexibility through a transparent and investor-friendly regulatory framework.”

The central bank said the rules have been prepared after a committee constituted by the Central Government reviewed the existing regulatory framework, with the draft incorporating the committee’s recommendations in consultation with the government and other stakeholders.

The RBI said the rules will be finalised after wider public consultation. It has placed the draft Foreign Exchange Management (Foreign Investment) Rules, 2026 on its website and invited comments and feedback from all stakeholders.

Comments on the draft may be submitted through the “Connect 2 Regulate” section on the RBI website or via email by August 31, 2026, with the subject line “Feedback on Draft Foreign Investment Rules”, the central bank said. (ANI)