Russian firms queue for Indian market trading licence

However, Russia still doesnt feature amongst the top ten sources of FPI inflows into India.

Russian firms are stepping up their entry into India’s capital markets, with the number of Russia-linked Foreign Portfolio Investors (FPIs) registered with the Securities and Exchange Board of India (Sebi) rising sharply from just three in 2023 to 23 today. At least five more Russian entities are currently in the process of securing FPI licences, according to a global custodian familiar with the filings. India’s consistently strong market performance continues to draw new foreign money—but for Russian investors, the strategic motivations run deeper.

Western sanctions following the Ukraine war have made even routine capital movement challenging for Russia-linked entities, with several European jurisdictions freezing assets owned by sanctioned nationals. Against this backdrop, India is being viewed as a stable, politically secure, and accessible market. “India and Russia have had deep diplomatic ties for decades. For Russian funds, that makes India a predictable and safer jurisdiction at a time when deploying money in the West has become extremely difficult,” the custodian said.

Sberbank, Russia’s largest lender, has led the way. It was among the first Russian institutions to register with Sebi and currently has three entities operating as FPIs in India. Other Russian financial institutions with registrations include T Bank and Alfa Capital. A few Russian brokerage firms have also been investing on behalf of wealthy clients, although FPI rules do not require disclosure of beneficial owners, making it difficult for Moneycontrol to identify the individuals behind these flows.

Before February 2022, Russian funds had diversified exposure across global equities, real estate, luxury assets, and other alternative investments. Sanctions imposed after the Ukraine invasion—by the US, UK, and EU—froze assets and severely limited mobility of capital. “Those actions forced many wealthy Russians to reconsider the risks of investing in countries with which Moscow has strained diplomatic ties. India, by contrast, is seen as a bright spot offering both durability and predictability,” the custodian said.

The build-up of Russian interest is expected to intensify following a joint announcement on Thursday that will open India’s markets to Russian retail investors via the mutual fund route. Shortly after President Vladimir Putin’s visit, Sberbank launched what it described as the first India-focused mutual fund designed for Russian individuals. “We are opening another window of investment opportunities for our Russian clients,” Herman Gref, chairman of the Sberbank Executive Board, said in a joint statement. “Until now, no straightforward options existed for Russian investors to make personal investments in Indian assets. We have created a new and efficient financial bridge between the two countries.”

Indian depositories publish country-wise FPI ownership only for the top 10 countries by investment value. Since Russia does not feature in that list, granular data on the extent of Russian exposure is not publicly available.