Regulators in India are currently engaged in advanced discussions to simplify entry procedures for new overseas investors. The changes being considered would involve streamlining documentation requirements and reducing scrutiny for investors already regulated in their home countries. These alterations aim to cut down the registration time in India to a span of 30-60 days from the previous six months, aligning with global standards.
These developments come amidst a period of sluggish foreign inflows into the Indian economy. As per sources with direct knowledge of the matter, top officials from the central bank and market regulator have been working closely on this initiative. Despite their preferences to remain unnamed due to confidentiality reasons, it has been revealed that the proposed modifications have the potential to make Indian markets more appealing to overseas investors.
Market regulator Securities and Exchange Board of India (SEBI) and the Reserve Bank of India have not yet provided official comments on these deliberations. However, Tuhin Kanta Pandey, Chairman of India's markets regulator, expressed the need to simplify know your customer norms across various regulatory bodies to facilitate foreign investment.
Against a backdrop of trade tensions with the U.S., India has witnessed net sales of $10 billion from foreign investors across equity and bond markets in the current year. To address this concern, Indian officials have engaged with over 200 global asset managers to gather feedback on enhancing market accessibility, with a recent delegation from multiple countries meeting with Indian regulatory bodies.
In a bid to harmonize regulations, the central bank is working towards aligning its documentation requirements with SEBI for overseas pooled funds such as insurance and mutual funds. Additionally, efforts are underway to synchronize norms for foreign investors seeking to open bank accounts in India with SEBI's registration prerequisites.
SEBI has introduced a dedicated website for foreign investors and is exploring the possibility of direct submission of registration documents to further streamline the process. A lobbyist for offshore investors, Eugenie Shen, commended both SEBI and RBI for their proactive measures to attract foreign investment into India.
Overall, these initiatives reflect a concerted effort by Indian authorities to attract overseas capital and bolster the country's economy amidst global economic uncertainties.
