Less paperwork, more investment: Sebi launches single-window entry for FPIs

The low risk foreign investors identified by Sebi include government-owned funds, central banks, sovereign wealth funds, multilateral entities, highly regulated public retail funds

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 Markets regulator Sebi has launched a new system that will make it much easier for low-risk foreign institutions to invest in the Indian stock market and private companies.This new framework is called SWAGAT-FI, short for Single Window Automatic & Generalised Access for Trusted Foreign Investors—and its whole purpose is to simplify paperwork, cut down repeated compliance checks, and make India a more attractive investment hub.

 

Here’s what you need to know—minus the jargon.

 

Who exactly are these “trusted foreign investors”?

 

Sebi has created a special category of low-risk foreign players who will get easy access to the Indian markets under SWAGAT-FI. These include:

 

• Sovereign wealth funds
• Central banks
• Government-owned investment funds
• Multilateral institutions (World Bank, ADB, etc.)
• Highly regulated public retail funds
• Insurance companies
• Pension funds

 

These are the biggest, most stable, and most credible investors globally—basically the “blue tick” investors of the world.

 

What does SWAGAT-FI actually do? (And why should you care?)

 One-click style access for foreign investors

 

Earlier, foreign investors had to register separately under different categories and submit repeated documentation. SWAGAT-FI creates a single-window access, reducing paperwork and speeding up approvals.

 

 Dual registration: FPI + FVCI with no extra documents

 

This is a big one. If a foreign investor applies once, they can now get:

• FPI (to invest in listed shares and bonds)
• FVCI (to invest in unlisted startups and private companies without filing new documents every time.

This opens the door for large foreign funds to invest more flexibly across India’s public and private markets.

 

KYC + renewal every 10 years, not every 3–5 years

 

The boring-but-essential KYC and re-registration cycle has now been stretched to once in 10 years. This reduces compliance work significantly and makes India more investor-friendly.

 

Key changes for funds operating out of IFSC (GIFT City)

 

• Retail schemes in IFSCs (like in GIFT City) with an Indian sponsor or manager can now register as FPIs too.
• This widens the pool of investors who can bring foreign money into India.
• Sebi also clarified that sponsor contributions from resident Indian entities must be below 10% of the fund corpus, to avoid conflicting rules between Sebi and IFSCA.
• This prevents accidental non-compliance and gives funds clarity to operate smoothly.

 

Why does this matter to you as an Indian investor?

 

Even though these reforms are aimed at foreign institutions, you benefit indirectly:

• More foreign money = deeper, more stable markets
• Large, low-risk investors like sovereign funds tend to invest steadily. Their participation can:
• Improve liquidity
• Lower volatility
• Support long-term market growth

 

 More funding for Indian startups and private companies

 

• Dual registration (FPI + FVCI) means these investors can support both listed companies and startups.
• This strengthens India’s startup ecosystem and job creation.
• More confidence in India as a global investment hub
• When regulations become simpler and more transparent, foreign investors feel safer.
• This boosts India’s valuation, global standing and long-term economic growth.

 

When do these rules kick in?

 

Sebi has already updated the regulations, and the changes will come into effect on June 1, 2026.

 

How big are these foreign investors anyway?

 

As of June 30, 2025:

•  
• India had 11,913 registered FPIs
• They held assets worth ₹80.83 lakh crore
• SWAGAT-FI investors account for 70%+ of this asset base
• This means the new rules impact most of the serious foreign money flowing into India.

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. 

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 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 be subject to a maximum of 10 per cent of corpus of the Fund (or assets under management in case of retail schemes).