India’s market regulator plans to sharply cut the registration timeline for foreign portfolio investors, Securities and Exchange Board of India chief Tuhin Kanta Pandey said.
“The idea is that we should take five days. Currently, we are talking about 30 days. But people's impression is that it takes a few months,” Pandey said in an interview with Mint.
To further attract FPIs, Sebi has been holding webinars to tutor them on entering the Indian markets to make their onboarding smoother and faster. About 2,000 FPIs have been part of such webinars conducted by Sebi officers, Pandey said.
The regulator wants to make the Indian capital market more attractive for foreign investors as factors such as high valuations and weak earnings growth deter investor interest. FPIs had a net outflow of ₹1.66 trillion from the equities market in 2025 against inflows of ₹427 crore the year before, according to data from the National Securities Depository Ltd. Foreign investors have pulled out a net ₹35,962 crore from Indian equities so far in 2026.
Mint reported last month that high valuations and a prolonged slowdown in earnings pushed foreign investors to move money out of Indian stocks and into AI-led markets such as Taiwan and South Korea. This shift left India among the weaker-performing markets even as global markets were unsettled by US-Europe trade tensions. FPIs have been using every market rebound to build short positions, reflecting continued concerns over corporate earnings.
The Sebi chief said recent interactions with FPIs in Japan highlighted the need for deeper engagement with countries that already have strong economic ties with India. He sensed a high level of confidence in India among Japanese investors, with very few concerns raised. Many wanted to look beyond foreign direct investment and increase their portfolio exposure to India.
“They were happy that some of the Japanese subsidiaries which are listed here are doing so well,” Pandey said.
Process digitization
Some smaller Japanese entities said they not only want to go to India but also eventually list there, he said. They said they want to carry out research in India and set up an R&D facility that would get listed, said Pandey.
The push to reduce approval timelines is linked to greater digitization of the process, including the use of digital signatures. Once the process is completely digitized, the regulator plans to track and calculate timelines more transparently.
Sebi has taken up several initiatives recently to ease onboarding for foreign investors. In 2025, it launched SWAGAT-FI, a digital platform that acts as a single-window interface for registration, documentation and grievance redressal for FPIs. With the platform, the market watchdog aims to improve coordination between FPIs, intermediaries and the regulator, reducing delays and bringing greater transparency and predictability to the FPI registration and post-registration process.
However, FPIs still face hurdles in the Indian markets such as capital gains tax on their investment gains.
“Most jurisdictions do not have capital gains for foreigners,” said Pandey. “But that is something which is clearly not our remit.”
Capital gains tax is levied on investments based on the holding period. Short-term investments, taxed at 20%, are those where gains are booked before 12 months. Gains booked after 12 months are termed as long-term investments and are taxed at 12.5%.