Securities and Exchange Board of India (SEBI) has notified a major reform for foreign investment in India, i.e., the ๐๐ข๐ง๐ ๐ฅ๐ ๐๐ข๐ง๐๐จ๐ฐ ๐๐ฎ๐ญ๐จ๐ฆ๐๐ญ๐ข๐ & ๐๐๐ง๐๐ซ๐๐ฅ๐ข๐ฌ๐๐ ๐๐๐๐๐ฌ๐ฌ ๐๐จ๐ซ ๐๐ซ๐ฎ๐ฌ๐ญ๐๐ ๐ ๐จ๐ซ๐๐ข๐ ๐ง ๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ (๐๐๐๐๐๐-๐ ๐) framework. The notified amendments come into force from June 01, 2026. This marks one of the most significant overhauls of Indiaโs foreign portfolio investment architecture in recent years.
Under the newly notified amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019 and the SEBI (Foreign Venture Capital Investors) Regulations, 2000, SEBI has operationalised the framework proposed before the Board in its Memorandum on SWAGAT-FI, following public consultation.
๐๐ก๐จ ๐ช๐ฎ๐๐ฅ๐ข๐๐ข๐๐ฌ ๐๐จ๐ซ ๐๐๐๐๐๐-๐ ๐?
Securities and Exchange Board of India (SEBI) has identified a set of objectively verified, low-risk foreign investors, including:
(a) Sovereign Wealth Funds
(b) Central Banks
(c) Government-owned or government-related funds
(d)ย Multilateral institutions
(e)ย Appropriately regulated Public Retail Funds
(f)ย Appropriately regulated insurance companies
(g)ย Appropriately regulated pension funds
As per the Board Memorandum, these investors already contribute 70%+ of total FPI Assets Under Custody as of June 30, 2025.
๐๐ก๐๐ญ ๐๐จ๐๐ฌ ๐๐๐๐๐๐-๐ ๐ ๐๐ก๐๐ง๐ ๐?
1. ๐บ๐๐๐๐๐-๐๐๐๐ ๐๐ ๐๐๐๐๐๐๐ ๐๐๐ (๐ญ๐ท๐ฐ + ๐ญ๐ฝ๐ช๐ฐ): Eligible investors can now register as both FPI and FVCI with no further documentation, allowing seamless participation in:
(a) Listed equity & debt (as FPI)
(b) Startups and unlisted companies in specified sectors (as FVCI) This eliminates duplication across investment routes and simplifies regulatory entry.
2. ๐ณ๐๐๐๐๐ ๐๐๐๐๐ ๐๐๐: KYC and renewal once every 10 years: Instead of the existing 3โ5 year review cycles, SWAGAT-FIs will undergo continuance and KYC review once in 10 years, aligning with RBIโs KYC norms for low-risk clients.
3. ๐ช๐๐๐๐๐๐ ๐๐๐ ๐ฐ๐ญ๐บ๐ช (๐ฎ๐ฐ๐ญ๐ป ๐ช๐๐๐) ๐๐๐๐ ๐๐๐๐๐๐๐๐๐๐: Retail schemes in IFSCs with an Indian sponsor/manager may now register as FPIs, subject to Sponsor contribution cap of 10% of corpus (or AUM for retail schemes), resolving the earlier inconsistency between SEBI and International Financial Services Centres Authority requirements.
4. ๐ผ๐๐ ๐๐ ๐ ๐๐๐๐๐๐๐ ๐๐๐๐๐๐ ๐๐๐๐๐๐๐๐๐: The amendments embed the SWAGAT-FI definition directly into the FPI and FVCI regulatory architecture, enabling simplified ongoing compliance and greater ease of investment across asset classes
SEBIโs SWAGAT-FI framework is expected to increase capital inflows from large, stable global institutions and deepen Indian equity and debt markets by attracting long-term investors.