SEBI Proposes SWAGAT-FI to Streamline Foreign Investment in India

On August 11, 2025, the Securities and Exchange Board of India (SEBI) proposed a new regulatory framework named SWAGAT-FI (Single Window Automatic & Generalised Access for Trusted Foreign Investors). This initiative aims to simplify access for low-risk foreign investors to the Indian securities market. SEBI intends for the framework to unify compliance procedures and reduce repetitive documentation, thereby enhancing India’s appeal as a global investment destination.

What SWAGAT-FI Proposes

Under the proposed framework, eligible foreign investors would enjoy a streamlined, single-window registration process. Once registered, they could invest through multiple routes—such as Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs)—without separate onboarding steps.

SEBI has identified specific categories of investors as “low-risk” and thus eligible for SWAGAT-FI. These include sovereign wealth funds, central banks, government-owned funds, multilateral agencies, regulated public retail funds, and insurance and pension funds—entities typically subject to robust governance in their home jurisdictions.

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Scale of Proposed Impact

As of June 30, 2025, India had 11,913 registered FPIs holding assets totalling ₹80.83 lakh crore. More than 70% of these assets are estimated to be held by entities that would qualify under the SWAGAT-FI framework—highlighting the substantial influence of the proposed eligible group.

Further Operational Benefits

SEBI’s proposal includes the following key operational enhancements:

• Dual registration option: SWAGAT-FIs may register simultaneously as FPI and FVCI without additional paperwork, allowing investments in both listed instruments and unlisted sectors/start-ups.
• Extended compliance cycle: The periodicity for registration renewals, fee submission, and KYC reviews would be extended to 10 years, up from the current 3 or 5-year cycles.
• Single demat account handling: SWAGAT-FIs may optionally use a single dematerialised account for all their holdings—across FPIs, FVCIs, or related investment instruments. Depositories would tag investments for regulatory oversight.
• Relaxation of NRI/OCI/RI caps: The current restriction limiting aggregate contributions from Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Indians (RIs) to 50% would be removed for SWAGAT-FI-eligible funds.

Public Consultation

SEBI has sought public input on this proposal and will accept feedback until August 29, 2025. Stakeholder suggestions will inform further refinement and finalisation of the framework.

Conclusion

SEBI’s proposed SWAGAT-FI framework aims to make India’s capital markets more accessible for trusted foreign investors by consolidating registration, extending compliance timelines, enabling dual-route investments, and easing ownership restrictions. Should it be adopted, this framework could significantly boost foreign participation and further cement India’s position as an investor-friendly global destination