SEBI proposes steps to boost resident Indian participation in FPIs via IFSC schemes

Consultation Paper Dated 08.08.2025

1. SEBI Seeks Public Comments on FPI Reforms

The Securities and Exchange Board of India (SEBI) has released a Consultation Paper inviting public feedback on proposals aimed at facilitating greater participation of resident Indians in Foreign Portfolio Investors (FPIs). The initiative seeks to broaden investment opportunities and strengthen India’s engagement with global capital markets.

2. Inclusion of IFSC-Based Retail Schemes

One of the key proposals is to allow International Financial Services Centre (IFSC)-based Retail Schemes, with resident Indian non-individual sponsors or managers, to register as FPIs. This move is expected to provide resident investors with a regulated channel to invest in foreign securities through the IFSC framework.

3. Alignment with IFSCA Regulations

SEBI has also proposed to align the FPI contribution limits with the IFSCA (Fund Management) Regulations, 2025. This harmonization aims to ensure consistency between SEBI’s regulatory framework and IFSCA’s provisions, creating a streamlined compliance environment for market participants.

4. Participation of Indian Mutual Funds in FPIs

Another notable proposal is to permit Indian Mutual Funds to be constituents of FPIs. By enabling mutual funds to participate in FPIs, SEBI intends to diversify the investor base and encourage cross-border portfolio diversification for Indian investors.

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