Sebi Boosts NRI Investment with FPIs in IFSC

Sebi has approved up to 100% aggregate contribution by NRIs, OCIs, and Resident Indians in FPIs based in International Financial Services Centres. This amendment is expected to boost NRI investment in Indian securities markets. FPI applicants must submit relevant documents, with existing FPIs given six months to comply.

The Securities and Exchange Board of India (Sebi) has announced a significant move to enhance investment by non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Indians in Foreign Portfolio Investors (FPIs) based in International Financial Services Centres (IFSCs).

In a circular issued on Thursday, Sebi stated it has amended its FPI rules to allow up to 100% aggregate contribution by NRIs, OCIs, and RIs in the corpus of FPIs regulated by the International Financial Services Centres Authority (IFSCA). This decision aims to channel more NRI and OCI investments into the Indian securities markets, a long-standing demand from the investment community.

Finance Minister Nirmala Sitharaman, in her July 2019 budget speech, emphasized the need to boost NRI investments in Indian capital markets. Despite being the world's top remittance recipient, India has seen relatively low NRI investment. The new Sebi guidelines require FPI applicants to provide necessary documentation and declarations at the time of registration, with existing FPIs given a six-month window to meet the new requirements.

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