SEBI Introduced SWAGAT-FI for FPI’s and FVCI’s Entry into Indian Market

The capital markets regulator, SEBI, has unveiled a streamlined single-window system aimed at making it easier for low-risk foreign investors to enter the Indian securities market. The initiative is designed to cut down on compliance hurdles and boost India’s appeal as a global investment hub.

Simplified Market Entry by SWAGAT-FI

The new framework, Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) offers simplified market entry for low-risk foreign entities, introduces a unified registration process across various investment routes, and eliminates repeated documentation requirements.

SEBI has classified a range of institutions as low-risk investors, including sovereign wealth funds, central banks, government-backed funds, multilateral agencies, well-regulated public retail funds, pension funds, and insurance companies overseen by reputable regulators.

SEBI’s Initiatives for FPI

Through two notifications issued on December 1, SEBI introduced the SWAGAT-FI mechanism for both Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs). These changes, which amend existing regulations for FPIs and FVCIs, will take effect on June 1, 2026. The amendments follow the board’s approval of the proposal in September.

Under the new structure, SWAGAT-FI entities applying for or already holding FPI status will also be able to register as FVCIs without submitting any additional paperwork. Dual registration will allow them to invest in listed equities and debt instruments as FPIs, while gaining access to unlisted companies and startups in designated sectors under FVCI rules.

To further ease compliance, SEBI has extended the validity period for registration renewals including fee payments and KYC reviews from the current three- or five-year cycle to a 10-year cycle. Additionally, to support FPIs operating out of International Financial Services Centres (IFSCs), SEBI has permitted retail schemes managed or sponsored by resident Indians in IFSCs to register as FPIs. Previously, this option was available only to Alternative Investment Funds with resident Indian sponsors or managers.

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SEBI also addressed inconsistencies between its regulations and those of the IFSCA regarding sponsor contribution limits for funds in IFSCs. The updated FPI Regulations now cap such contributions at 10% of a fund’s corpus (or AUM for retail schemes) to ensure regulatory alignment. As of June 30, 2025, India had 11,913 registered FPIs, holding assets worth ₹80.83 lakh crore. According to SEBI, SWAGAT-FI-classified investors account for over 70% of the total assets held by FPIs.

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