RBI, SEBI Push To Make India FPI-Friendly Amid $10 Billion Capital Outflows: Report

India's markets regulator and the Reserve Bank of India (RBI) are reportedly exploring ways to facilitate the entry of overseas investors into domestic markets, as foreign institutional investors (FIIs) continue to withdraw capital.

The Securities and Exchange Board of India (SEBI) and the RBI are in advanced talks to streamline documentation and reduce scrutiny for investors already regulated in other countries, according to a Reuters report.

What Will Be Different?

Currently, registering as a foreign portfolio investor in India can take up to six months. The proposed changes aim to cut this to 30–60 days, aligning India more closely with global standards.

SEBI Chairman Tuhin Kanta Pandey recently stated that regulators are collaborating with stakeholders to simplify the know-your-customer (KYC) norms.

Among the changes, the RBI is expected to align its bank account opening norms with SEBI's relaxed requirements for regulated pooled funds, such as mutual funds and insurers, while SEBI is exploring the digital submission of documents.

The effort comes at a time when foreign investors have sold $10 billion in equities and bonds this year, with outflows accelerating in July and August due to weak corporate earnings and heightened U.S. tariff risks.

This also comes in the backdrop of a dispute between SEBI and a U.S.-based trading firm, Jane Street. On July 4, SEBI barred all entities of the Jane Street Group from participating in the Indian securities market and ordered the impounding of ₹4,844 crore in alleged unlawful gains. The regulator stated that the firm generated ₹43,289 crore in profits through index options trading between January 2023 and March 2025.

The matter is currently with an appellate court, with SEBI reportedly being asked to share evidence to support its allegations.

For updates and corrections, email newsroom[at]stocktwits[dot]com. 

MENAFN23092025007385015968ID1110099076