India’s financial authorities are deep in talks to simplify the entry process for new foreign investors, according to four sources, as international capital inflow remains sluggish.
The proposed changes aim to streamline documentation, making it uniform and reducing scrutiny for investors regulated abroad. This adjustment could cut registration time in India to 30-60 days from the current six months, aligning with international standards, the sources revealed. They requested anonymity as the discussions are private.
Inquiries sent to the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) remain unanswered.
“We are working with various stakeholders to simplify KYC norms across regulators to facilitate foreign investments,” said Tuhin Kanta Pandey, the chairman of India’s market regulator, last week without further details.
These proposals emerge amid U.S. trade tariffs impacting India’s economy and markets.
Foreign investors have offloaded a net $10 billion in Indian equities and bonds in 2025, with sales peaking in July and August due to weak corporate earnings and tariff concerns.
Leading Indian regulators have consulted with over 200 global asset managers in Europe, Asia, and the U.S. in the past five months to gather feedback on increasing market accessibility, two sources added.
A delegation from six countries also met with RBI, SEBI, stock exchanges, and the finance ministry earlier this month, the sources noted.
The central bank plans to align its documentation requirements for regulated foreign pooled funds, like insurance and mutual funds, with SEBI’s more lenient standards, the sources stated.
“In 2019, SEBI eased documentation for regulated public retail funds, aligning them with government-owned funds, a step not yet mirrored by RBI,” one source mentioned.
The RBI will also harmonize foreign investor bank account norms with SEBI’s registration criteria, another source informed.
Currently, RBI mandates a risk-based assessment for banks, including fund source declarations and identity proof.
SEBI recently launched a website for foreign investors and is considering allowing direct registration document submissions, according to one source.
“Both SEBI and RBI have been proactive this year in facilitating foreign investments in India,” stated Eugenie Shen, managing director at the Asia Securities Industry Financial Markets Association, an advocate for offshore investors.
