SEBI has made it easier for low-risk foreign investors to participate in the Indian securities market with the introduction of a single-window access, a move aimed at simplifying compliance and enhancing the country’s attractiveness as an investment destination.
The new framework — Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) — would provide easier investment access to low-risk foreign investors, enable a unified registration process across multiple investment routes and reduce repeated compliance and documentation for such entities.
The low-risk foreign investors identified by SEBI include government-owned funds, central banks, sovereign wealth funds, multilateral entities, highly regulated public retail funds, and appropriately regulated insurance companies, as well as pension funds.
SEBI’s new framework
According to two separate notifications dated December 1, SEBI introduced the SWAGAT-FI framework for FPIs and Foreign Venture Capital Investors (FVCIs).
To give this effect, SEBI has amended the FPIs and FVCIs regulations, which would come into force on June 1, 2026. The amendment follows the SEBI board’s approval of a proposal in this regard in September.
Under the new framework, the regulator has granted an option to SWAGAT-FIs applying for registration/ already registered as FPIs to also register as FVCI, without requiring any further documentation.
Registration under both FPI and FVCI regulations will enable SWAGAT-FIs to invest in listed equity instruments and debt securities of Indian companies as FPIs, and in unlisted Indian companies engaged in specified sectors and startups as FVCI entities under their respective regulations.
To enhance ease of compliance, the regulator has increased the periodicity for the continuance of registration, including payment of fees and review of KYC documentation, to 10 years, up from the current three- or five-year periods.
To enhance the ease of doing business for FPIs operating from International Financial Services Centres (IFSCs), SEBI allowed retail schemes in IFSCs with a resident Indian sponsor or manager to register as FPIs.
Current status
Currently, Alternative Investment Funds in IFSCs with a resident Indian sponsor or manager are permitted to register as FPIs.
SEBI noted that limits on sponsor contribution by resident Indian non-individuals in funds set up in IFSC, as specified by SEBI and the International Financial Services Centres Authority (IFSCA), were at variance, leading to the risk of non-compliance by such entities.
To address this, the regulator amended FPI Regulations so that such sponsor contributions are subject to a maximum of 10 per cent of the corpus of the Fund (or assets under management in case of retail schemes).
As of June 30, 2025, India had 11,913 registered FPIs, holding assets worth Rs 80.83 lakh crore and SWAGAT-FIs are estimated to contribute more than 70 per cent of total FPIs’ assets under custody, according to SEBI data.