India’s markets regulator and its central bank are in advanced discussions to ease entry processes for new overseas investors, four sources said, at a time when foreign flows into the economy remain weak.
The changes would include fewer and standardised documentation and less scrutiny on investors that are already regulated in other countries. That will reduce the time taken to register in India to 30-60 days from nearly six months, bringing them in line with global standards, said the sources, who have direct knowledge of the matter. They declined to be named as discussions are private.
Email queries sent to market regulator Securities and Exchange Board of India (SEBI) and the Reserve Bank of India were not answered.
“To facilitate the ease of investments by foreign investors in India we are engaging with various stakeholders to streamline the know your customer norms across the regulators,” Tuhin Kanta Pandey, India markets regulator chairman, said last week, without elaborating.
The proposed changes come at a time when India faces harsh trade tariffs from the US, leading to uncertainty for the economy and its markets.
Overseas investors have sold a net $10 billion in Indian equities and bonds so far in 2025, with selling intensifying in July and August because of muted corporate earnings and U.S. tariff concerns.
Top Indian regulatory officials have met over 200 global asset managers across Europe, Asia and the U.S. in the last five months to seek feedback on ways to make Indian markets more accessible, two of the four sources said.
Separately a delegation of investors from six countries met officials at the RBI, SEBI, exchanges and finance ministry in India earlier this month, the two added.
As part of the changes, the central bank will match SEBI's more liberal documentation needs for regulated overseas pooled funds, such as insurance and mutual funds, which are considered to be low-risk, the sources said.
“In 2019, SEBI had eased documentary requirements for regulated public retail funds brought them at par with government-owned funds. A similar relaxation has not been done by RBI yet,” said one of the sources.
RBI will also align norms for foreign investors to open bank accounts with SEBI's registration requirements, a second source said.
At present, RBI requires banks to follow a risk-based assessment which includes seeking a declaration on the source of funds and proof of identity, among other requirements.
SEBI has also recently lauched a website for foreign investors, and is exploring whether it could allow them to submit registration documents directly, said one of the four sources.
"Both SEBI and RBI have been very responsive and pro-active this year in finding ways to make it easy for foreign investors to invest in India,” said Eugenie Shen, managing director, Asia Securities Industry & Financial Markets Association, a lobbyist for offshore investors.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
