SEBI Introduces the SWAGAT-FI Framework for Low-Risk Foreign Investors

In a significant step towards facilitating foreign investment in India, the Securities and Exchange Board of India (SEBI) has introduced a comprehensive regulatory framework specifically designed for trusted foreign investors through parallel amendments to both the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 (FPI Regulations) and the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000 (FVCI Regulations). These amendments, notified vide two separate notifications dated December 1, 2025, formalize the Single Window Automatic and Generalised Access for Trusted Foreign Investor (SWAGAT-FI) framework that was approved by SEBI at its 211^th meeting held on September 12, 2025 (which can be accessed here).  The framework is built on a ‘trust-but-verify’ approach and is designed to cater to sophisticated, low-risk foreign investors meeting stringent objective verification criteria.

Key highlights of the amendments have been outlined below:

• Introduction of the SWAGAT-FI framework:

1. 1. The Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2025 (FPI Amendment Regulations) define the term ‘Single Window Automatic and Generalised Access for Trusted Foreign Investor’ or ‘SWAGAT-FI’ to include the following categories of investors, subject to conditions as may be specified by SEBI from time to time: (I) Government and Government related investors as provided under the FPI Regulations; and (II) Public retail funds as defined in the FPI Regulations. The Securities and Exchange Board of India (Foreign Venture Capital Investors) (Amendment) Regulations, 2025 (FVCI Amendment Regulations) adopts the same definition of SWAGAT-FI.

1. 2. The SWAGAT-FI framework envisages dual registration, allowing eligible investors to register both as Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) through a single unified process.  This eliminates the need for separate registration processes and streamlines market access for trusted foreign investors.

1. 3. SEBI has extended the review and fee-payment cycles for registration, renewals and Know Your Client (KYC) review to ten years from the prevailing three- or five-year cycles. While registration/renewal fees for SWAGAT-FI investors will be collected in advance once every ten years, renewal fees is required to be paid once every ten years to keep the registration in force.

1. 4. SWAGAT-FI investors are exempted from the 50% aggregate contribution limit applicable to Non-Resident Indians, Overseas Citizens of India, and Resident Indian individuals investing in FPIs.

1. 5. SWAGAT-FI investors are exempted from the investment limits specified under the FVCI Regulations, which prescribe that 66.67% of an FVCI’s investments should be in unlisted equity shares or equity linked instruments of venture capital undertakings and 33.33% in other specified securities.

1. 6. Eligible foreign investors may opt to be identified as SWAGAT-FIs at the time of their initial FPI registration. Existing FPIs that satisfy the eligibility criteria will also be permitted to apply for SWAGAT-FI status.

1. 7. Upon obtaining SWAGAT-FI status, both new applicants and existing FPIs will become eligible for the regulatory relaxations discussed at (iv) and (v) above.

• Ease of Doing Business measures for FPIs based in IFSCs:

1. 1. In order to facilitate resident Indian participation in International Financial Services Centre (IFSC) based FPIs, SEBI has permitted registered Indian mutual funds to be constituents of FPI applicants, provided they comply with the conditions prescribed by SEBI.

1. 2. Further, SEBI has permitted registration of retail schemes based in IFSCs, managed or sponsored by resident Indian non-individuals, as FPIs.

1. 3. For alternative investment funds (AIFs) and retail schemes set up in IFSCs, the maximum permissible contribution by the fund management entity or its associate has been harmonized at 10% of the corpus (for AIFs) or 10% of the assets under management (for retail schemes), harmonizing SEBI and International Financial Services Centres Authority (IFSCA) norms.

1. 4. The amendments clarify that ‘fund management entity’ and ‘associate’ shall have the meaning as provided under the International Financial Services Centres Authority (Fund Management) Regulations, 2025, as amended from time to time.

1. 5. These amendments are effective from the date of their notification in the official gazette, i.e. December 1, 2025.

Conclusion:

These amendments represent a strategic overhaul of India’s foreign investment framework, positioning SWAGAT‑FI as a unified, interoperable registration mechanism that offers trusted foreign investors a simpler, more predictable and streamlined regulatory pathway to access Indian markets.