India to Simplify Entry for Overseas Investors, Shortening Registration Time

India is moving to simplify registration procedures for foreign investors, in a bid to counter sluggish foreign flows and address concerns over U.S. trade tariffs, according to multiple sources familiar with the matter.

SEBI and RBI Streamline Investor Registration

The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) are in advanced discussions to reduce documentation requirements and ease scrutiny for overseas investors already regulated in other jurisdictions. The proposed reforms are expected to shorten registration timelines from nearly six months to between 30 and 60 days, aligning India with international norms, the sources said. They requested anonymity as the talks are ongoing and confidential. Emails sent to SEBI and RBI seeking comment were not answered.

“To facilitate the ease of investments by foreign investors in India, we are engaging with various stakeholders to streamline know-your-customer norms across regulators,” SEBI Chairman Tuhin Kanta Pandey said last week, without offering further details.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

Foreign Flows Hit by Tariffs and Market Uncertainty

The reforms are coming amid mounting uncertainty in Indian markets due to U.S. tariffs. So far in 2025, overseas investors have sold a net $10 billion in Indian equities and bonds, with sell-offs accelerating in July and August due to subdued corporate earnings and trade concerns.

To improve market access, top Indian regulators have engaged with over 200 global asset managers across Europe, Asia, and the U.S. during the past five months. Additionally, a delegation of investors from six countries met officials at the RBI, SEBI, Indian exchanges, and the finance ministry earlier this month, according to sources.

Low-Risk Funds to Benefit from Relaxed Norms

Under the proposed changes, RBI will adopt SEBI’s more liberal documentation requirements for regulated foreign pooled funds, such as insurance and mutual funds, which are considered low-risk. One source noted that while SEBI relaxed documentation for regulated public retail funds in 2019, RBI has yet to implement similar measures. Furthermore, RBI will align procedures for opening bank accounts for foreign investors with SEBI’s registration standards. Currently, RBI mandates a risk-based assessment including verification of fund sources and identity documentation.

SEBI has also launched a dedicated website for foreign investors and is exploring the possibility of allowing them to submit registration documents directly online.

“Both SEBI and RBI have been very responsive and proactive this year in finding ways to make it easy for foreign investors to invest in India,” said Eugenie Shen, Managing Director of the Asia Securities Industry & Financial Markets Association, a lobbyist group for offshore investors.

Conclusion

The proposed regulatory changes are expected to significantly ease the entry of overseas investors into Indian markets, boost foreign capital inflows, and provide a more streamlined framework that aligns with global standards.