RBI notifies the Draft FI Rules to rationalise the Principal Rules, inviting public consultation and comments

In brief

On 21 July 2026, the Reserve Bank of India (RBI) published¹ the Draft Foreign Exchange Management (Foreign Investment) Rules, 2026 (Draft FI Rules), for public consultation and comments until 31 August 2026. These Draft FI Rules propose to replace the existing Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (Principal Rules).

The Draft FI Rules seeks to establish a simplified and principles-based framework by harmonising definitions and separating procedural provisions of the Foreign Exchange Management Act, 1999 (FEMA) from sector-specific foreign direct investment (FDI) policy requirements. In addition, the Draft FI Rules intend to reduce compliance requirements, adopting neutral provisions aligned with evolving business practices, and establish a more transparent and investor-friendly framework.