Nris In UAE: Indian Regulator Seeks To Ease Overseas Investment In Capital Market

Question: Overseas investors have in recent weeks exited the Indian capital market. Are steps being taken to shore up the sentiment and incentivise them?

ANSWER: To make India more attractive for overseas capital to flow into the country, the Securities and Exchange Board of India (Sebi) has initiated the Swagat-FI framework for foreign investors. This means that foreign portfolio and venture capital investors like sovereign funds, central banks and regulated retail funds will have single-window access with a ten-year registration and KYC cycle against three years at present. Further, Sebi and market infrastructure institutions have launched the India Market Access Portal to provide step-by-step guidance on foreign portfolio investor registration, documentation and compliance.

Other measures taken by Sebi recently to deepen the capital market in India pertain to dilution of guidelines for companies which are about to launch Initial Public Offerings. Companies listing with less than 15 per cent public float will now be given ten years to meet the 25 per cent minimum public shareholding requirement, while those companies which have 15 per cent or more public float will have five years to do so. Anchor investor rules have been liberalised under which the overall quota has gone up to 40 per cent with life insurance and pension funds having a share in the reserve pool.

Question: While many are suggesting that the government should create the right environment for providing employment opportunities to the youth in India, the issue of entrepreneurship has receded in the background. Is this likely to change in the near future?

ANSWER: A new initiative called Yogya Bharat Mission is being put in place by the Indian Government to develop entrepreneurship skills which would provide exciting opportunities for the youth. A new model 'Business in a Box' is being set up which would deploy business models that could be implemented by individuals and nano-entrepreneurs with a focus on technical skills. This will cater to local economies and promote sustainable non-farm occupational opportunities, particularly in rural and peri-urban areas. Further, it will create the necessary environment for small entrepreneurs so as to prevent large scale migration for work opportunities to urban centres.

The Government also plans to introduce a national employability and entrepreneurship measure, which would track data and use it from time to time to make necessary policy interventions and take strategic measures that are aligned to corporate and industry needs. According to data available, 30.6 per cent of would-be entrepreneurs are presently trained through hereditary exposure, self-learning and on-the-job training. The Ministry for Skills, Development and Entrepreneurship has, therefore, identified competencies, like effective communication, digital and financial literacy, problem solving adaptability, and an entrepreneurial mind-set, that are required to be cultivated for reaping the demographic dividend.

Question: Have export of Indian goods been adversely impacted by additional US tariffs being imposed? What measures are being taken to counter this challenge?

ANSWER: The data for the month of August has shown that export of Indian goods rose by 6.7 per cent to $35.1 billion in August and the aggregate for the first five months of the current fiscal year 2025-26 stands at $184.1 billion. During this five-month period, India's import bill went up by just 2.1 per cent. It is therefore clear that Indian exporters are diversifying into new global markets with help from overseas Indian trade missions. In a bid to push e-commerce exports which would help small and medium businesses, the Government is proposing to institute a framework for an inventory based model applicable to e-commerce exports. This proposal will depart from the current guidelines which do not permit foreign e-commerce platforms to hold inventory.

Under the proposed guidelines, medium and small enterprises would be assisted and encouraged to participate in e-commerce trade. Currently, these enterprises are not able to do so on account of certain complexities pertaining to documentation, compliance requirements and high cost of logistics. It is therefore proposed by the Government that a third party export facilitation model would be set up wherein a dedicated entity linked to e-commerce platforms would manage on behalf of these enterprises compliance, logistics and customs procedures. This would enable small and medium enterprises to focus on product development, quality controls and branding. With these initiatives being taken, it is expected that the Indian export sector would continue to perform well in the coming months and be able to meet the challenges imposed by US tariffs until these are eased when the India-USA agreement is entered into.

The writer is a practising lawyer, specialising in corporate and fiscal laws of India.

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