The Reserve Bank of India's recent decision to increase investment limits for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and eligible Persons Resident Outside India (PROIs) investing in Indian equity markets has been broadly welcomed by market participants. However, industry experts believe the move is unlikely to trigger a significant increase in foreign portfolio inflows in the near term.

According to market estimates, NRI holdings in Indian equities currently stand at approximately ₹5.2 lakh crore, a relatively small share compared to India's total market capitalisation of around ₹461 lakh crore. As a result, analysts expect the policy change to have a gradual rather than immediate impact on foreign participation.

Gopal Jain, Managing Director and CEO of Gaja Alternative Asset Management, said the measure would support market liquidity, improve ease of access, and reinforce India's attractiveness as a long-term investment destination. He noted that the move helps connect India's capital markets more closely with global savings and represents a measured step toward further capital account liberalisation.

Nirav Karkera, Head of Research at W by Groww, said the reduction in compliance requirements and improved accessibility for overseas investors are directionally positive for foreign flows. However, he cautioned that the incremental increase in participation is unlikely to be large enough to materially alter capital market inflows or currency dynamics in the immediate future.

Vikas Gupta, CEO of Omniscience Capital, also believes the policy will not result in an immediate spike in investments. He noted that awareness of the regulatory changes and investor understanding of the new framework will take time to develop before meaningful inflows materialise.

Experts highlighted that long-term interest among NRIs and OCIs in India's growth story remains strong despite short-term market volatility. In addition, periods of rupee weakness can enhance the attractiveness of Indian assets for overseas investors by increasing the purchasing power of foreign currency remittances.

Market participants view the RBI's move as part of a broader effort to improve foreign investor participation, simplify investment processes, and build confidence in India's regulatory framework. While the immediate impact on flows may be limited, analysts believe the measure could provide structural support for a gradual return of foreign investment into Indian capital markets over time.