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The Alternative Investment Fund (AIF) industry in India has grown in the last few years. Now, many investors are not relying only on mutual funds or fixed deposits. They are turning to new investment options like private equity, venture capital, private credit, infrastructure, and real estate funds.
SEBI proposed the new GARUDA framework on 11 May 2026 to make this growing market more efficient and easier to use. The full name of GARUDA is Green-Channel: AIF Rollout Upon Document Acknowledgement.
This framework aims to speed up the AIF scheme launch process. Earlier, it took about 30 days to launch a new scheme. But time can be reduced to about 10 working days with the introduction of GARUDA. This will allow fund managers to raise capital faster, reduce the chances of missing investment opportunities, meet AIF compliance needs and increase the ease of doing business.
An Alternative Investment Fund (AIF) is a privately pooled investment fund where multiple investors invest money together. These funds work outside the traditional investment options and are regulated by SEBI.
AIFs are generally divided into three categories:
Currently, AIFs are becoming very popular among HNIs, family offices, and institutional investors. Because they offer higher returns than traditional investments. Many investors are choosing AIFs for portfolio diversification.
In the previous AIF approval process, fund managers faced significant delays. It took about 30 days or more to launch a new scheme. So, good investment opportunities were often missed. Timing is very important in the private equity, venture capital, or private credit sector.
India’s AIF industry is now growing rapidly. As of March 2026, there were about 1,849 registered AIFs in the country. In addition, the total investment commitment has reached about ₹15.74 lakh crore. A faster approval system was needed to manage such a large market.
SEBI brought the GARUDA proposal to make the investment ecosystem more efficient. The scheme’s approval process will be faster, and capital deployment will be easier through this framework.
SEBI has some major goals behind the launch of GARUDA:
Currently, if an AIF manager wants to launch a new scheme, he first has to submit a Placement Memorandum (PPM) and other necessary documents to SEBI. Then the regulator reviews the documents. The entire approval process usually takes about 30 days to complete. The new GARUDA framework can make this process much easier and faster.
The new system will be as follows:
This is basically called the “green channel.” You will not have to wait long for the approval process to be completed. If there are no major issues, then the fund can be launched quickly.
However, SEBI will continue to conduct post-facto reviews, inspections, and compliance monitoring. Investor protection rules will also remain the same.
So, it will also be very important for fund managers to maintain transparency, governance, and proper compliance with faster approval.
Given below are the key features of SEBI’s GARUDA proposal-
The biggest advantage of the GARUDA framework is the faster approval process. Earlier, it took about 30 days to launch a new AIF scheme. Now, the time can be reduced to about 10 working days. So, fund managers will be able to do fundraising faster. It will also be possible to deploy capital faster in investment opportunities.
This proposal can improve the ease of doing business in the investment industry. Earlier, there was an operational delay for document approval and regulatory processes. The delay will be reduced a lot with the advent of GARUDA. This will make the fund launch process smoother and more efficient.
SEBI has proposed to provide some flexibility for accredited investor-only schemes. Earlier, filing through a merchant banker was mandatory. But under the GARUDA framework, the fund manager will be able to file documents directly. This will reduce both cost and processing time.
Some accredited investor-only schemes can be launched immediately after document filing. There is no need to wait long for regulator review. This will speed up the investment process for sophisticated investors.
Faster approval does not mean less regulation. The SEBI will continue risk-based inspection, post-facto review, and compliance monitoring. Investor protection rules will also remain the same.
Accredited investors refer to investors who have relatively high income, net worth, and financial knowledge. They can understand complex investment products and market risks better than ordinary investors.
SEBI has proposed granting some extra flexibility to accredited investors. Because the regulator believes that such investors are capable of doing their own risk assessment.
As of April 2026, there were about 2,773 accredited investors in India. Besides, their AIF holdings are around ₹1.91 lakh crore.
The GARUDA framework can bring big benefits to family offices, ultra-high-net-worth individuals (UHNWI), and institutional investors. They will be able to participate in new investment opportunities faster due to faster scheme launches and fewer compliance delays.
The GARUDA framework can bring big changes in India’s AIF sector. A faster approval system will allow fund managers to launch new schemes faster. This can make the entire investment ecosystem more active.
Important impacts of GARUDA are given below:
This framework can help make India’s investment market more modern and globally attractive in the long term.
Getting funding quickly is very important for startups and growing businesses. Sometimes, even with a good business idea, growth slows down due to funding delays. Timing is especially important in the technology and innovation sectors.
Through the GARUDA framework, if AIF scheme approval is fast, fund managers will also be able to raise capital faster. So, investment flow can reach startups and businesses faster.
The following sectors can benefit the most:
For example, if an AI startup gets funding quickly, it can develop new products or expand quickly. Similarly, infrastructure and renewable energy projects can also get financial support quickly.
Quicker investment deployment will help increase innovation. It can also have a positive impact on new business expansion, job creation, and economic growth.
GIFT City is currently gaining popularity as India’s growing international financial hub. Offshore funds, global investment platforms, and international financial services are rapidly expanding here.
If the GARUDA framework is launched, the faster AIF approval process can attract more global fund managers. Because the easier and faster the fund launch process is, the more interest from international investors will increase.
Currently, many global financial centres such as Singapore, Dubai, and Luxembourg are known for their fund-friendly regulations and quick approval systems. India is also looking to move in that direction.
The GARUDA framework can make India’s alternative investment market more globally competitive. So, domestic and foreign fund managers can give more importance to India as an investment destination.
This initiative can help GIFT City take a stronger position in the global financial ecosystem in the long term.
Even if the GARUDA framework approval process is expedited, compliance responsibility will not be reduced. Rather, fund managers will have to follow regulatory rules more carefully due to faster approval.
The following issues should be given special emphasis:
Even if the SEBI gives faster approval, post-facto review, inspection, and risk-based monitoring will continue. The regulator can take action when any irregularity is found.
Apart from this, investors should not take investment decisions just by looking at fast approval. It is very important to do proper due diligence before investing in any AIF scheme. You should understand the fund strategy, risk level, manager experience, and financial objective well and then invest.
The Alternative Investment Fund (AIF) market in India is expected to grow at a faster pace in the coming years. Many investors are now looking to move beyond traditional investments and create diversified portfolios. So, the demand for private equity, venture capital, private credit, and real estate funds is increasing.
Investor awareness has increased significantly. High Net Worth Individuals (HNWIs), family offices, and institutional investors are also showing more interest in alternative investments.
Regulatory reforms like GARUDA can increase investor participation in this sector. A faster approval system will facilitate fund launches and help in capturing market opportunities faster.
India is carving out a significant place in the global private market ecosystem. Innovation, technology growth, and faster capital deployment can further strengthen the AIF industry in the long term. India may also become more popular as a global alternative investment destination in the future.
Enterslice is a professional business consulting and legal advisory company. AIF registration and regulatory compliance processes can be complex at times. We can provide professional support to businesses and fund managers.
Our Services:
Professional compliance support significantly reduces regulatory risk. In addition, document handling, filing, and approval processes become smoother. This allows fund managers to increase operational efficiency and focus more on business growth.
SEBI’s GARUDA framework is a big and important step for the AIF industry in India. The AIF scheme launch process can be much easier and faster with a faster approval system. So, investors, startups, fund managers, and the GIFT City ecosystem can all benefit.
Quicker capital deployment, especially in the venture capital, private equity, and infrastructure sectors, can help drive market growth. However, even with faster approvals, compliance, governance, and transparency remain as important as ever.
Enterslice can provide professional support, such as AIF registration, legal documentation, SEBI compliance, and regulatory filings, to properly manage such regulatory processes. We enable businesses to maintain compliance in a smoother and safer way. So, contact us today for hassle-free compliance.
GARUDA is a proposed framework by SEBI. It has been brought to speed up the AIF scheme launch process. It may be possible to launch eligible AIF schemes in less time. Earlier, the approval process used to take about 30 days. The time can be reduced to about 10 working days with the introduction of GARUDA. Its main objective is to improve faster capital deployment and ease of doing business.
The full name of GARUDA is Green-Channel: AIF Rollout Upon Document Acknowledgement. Here, “green channel” means an easy and fast approval route. The scheme can be launched when the regulator does not raise any objection within a certain period after the AIF manager files the documents. This can make the approval process much faster and smoother.
It usually takes about 30 days to launch a new AIF scheme. The regulator takes time to complete the document review and approval process. But under the GARUDA framework, eligible schemes can be launched in about 10 working days. This can save about 20 days. The fund managers will be able to capture investment opportunities faster due to faster approval.
No, the GARUDA framework may not automatically apply to all AIF schemes. According to the consultation paper of the SEBI, only “eligible” schemes can get this green channel facility. Which type of fund or scheme will get this facility will depend on the final regulatory guidelines, So, future eligibility criteria will be very important.
“Accredited investors” are defined as financially strong and experienced investors. Their income or net worth is higher than that of ordinary investors. They also understand complex investment risks and market structure better. So, the regulator is giving some extra flexibility to accredited investors. Family offices, ultra-high-net-worth individuals (UHNWIs), and institutional investors generally fall into this category.
No, the GARUDA framework will not reduce investor protection rules even if it gives faster approval. SEBI will continue post-facto review, inspection, and compliance monitoring. The regulator can take action when any irregularity or compliance issue is found. So, the importance of transparency, governance, and disclosure will remain the same as before, with the faster process.
Faster funding access is very important for startups. If the AIF approval process is faster through the GARUDA framework, fund managers will also be able to raise capital faster. As a result, startups can make investments faster. Especially businesses in AI, technology, renewable energy, and the digital economy sectors can benefit. Faster funding will also help in innovation and business expansion.
If the SEBI raises any objection or seeks clarification within the 10 working-day observation period, the green channel facility will be temporarily closed. The scheme cannot be launched then. First, the fund manager will have to resolve the issue or follow additional directions from the regulator. After that, the approval process can proceed again.
GIFT City is currently India's growing international financial hub. Speeding up the GARUDA framework fund launch process can increase the interest of global fund managers and international investors. A faster approval system can make offshore fund setup and cross-border investment structures more attractive. It can help increase GIFT City's global competitiveness in the long term.
Yes, foreign investors and global fund managers can benefit from the GARUDA framework. Faster approval and a smoother filing process can make India's alternative investment market more attractive. International fund houses will be able to launch schemes faster. This can also make it easier to set up India-focused investment vehicles. This is likely to increase foreign capital inflow.
Merchant bankers will play a crucial role in the GARUDA framework. They will file a Placement Memorandum (PPM) and required documents on behalf of the AIF manager. They will also have to ensure that the filing is accurate and complete. In the acknowledgement-based approval model, document quality and compliance responsibility may become more important. Hence, the accountability of merchant bankers may increase.
Enterslice can provide professional support in AIF registration, legal documentation, and regulatory compliance. We provide services like SEBI compliance advisory, due diligence, regulatory filing, and merchant banker coordination. The GIFT City setup of advisory and corporate compliance support is also provided. This will help businesses manage regulatory requirements in a smoother way.
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