Markets regulator Securities and Exchange Board of India (Sebi) has proposed introducing a single window access for low risk foreign investors seeking to participate in the Indian securities market, 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), if implemented, 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, Sebi said in its consultation paper.
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.
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 as on June 30, 2025.
“SWAGAT-FI framework aims to offer a unified, streamlined and consistent access mechanism for certain categories of foreign investors that are verified to have met specified eligibility criteria. This framework will help reduce regulatory complexity, simplify compliance and enhance India's attractiveness as an investment destination,” Sebi said.
Under the framework, the regulator has proposed to "grant an option to SWAGAT-FIs applying for registration/ already registered as FPIs to also register as FVCI (Foreign venture Capital Investor), without the need for 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 FPI, and in unlisted Indian companies engaged in specified sectors and startups as FVCI under respective regulations, it added.
To enhance ease of compliance, the regulator has suggested increasing the periodicity for continuance of registration, including payment of fee and review of KYC documentation to 10 years, up from the current three-year or five-year periods.
It has been proposed to permit the use of a single demat account for holding all securities acquired as FPI or FVCI or as foreign investor investing in units of investment vehicles, on an optional basis. Further, depositories will tag investments to ensure regulatory supervision.
It has also been proposed to remove the restriction on aggregate NRI, OCI and Resident Indian (RI) individuals’ contribution in SWAGAT-FIs. At present, aggregate contribution from non-NRI, OCI and RI individuals in an FPI is capped at 50 per cent of the total corpus. Sebi has sought public comments on the proposals till August 29.
Boosting resident Indians’ participation in FPIs
Sebi has proposed facilitating greater participation of resident Indians in the Foreign Portfolio Investors (FPIs) framework. Under the proposal, Sebi has suggested expanding the role of Indian non-individuals and mutual funds in international investment structures.
“It is proposed to enable retail schemes based in IFSCs in India with resident Indian non-individuals as sponsor/manager to register as FPIs,” Sebi said in its consultation paper. The regulator has suggested that allowing retail schemes based in International Financial Services Centres (IFSCs) with resident Indian non-individuals as sponsors or managers can be registered as FPIs.
Besides, Sebi proposed that the term "sponsor or manager" for IFSC-based FPIs may be replaced with "Fund Management Entity (FME) or its associate". Resident Indian non-individuals as FME or its associate in AIFs and retail schemes in IFSCs may contribute up to 10 per cent of the fund’s corpus or assets under management for retail schemes. Overseas mutual funds/unit trusts registering as FPIs may be allowed to include Indian mutual funds as constituents.
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