Foreign Investment

Rs. 80 Lakh Crore in Play: Will SWAGAT-FI Keep FIIs Invested in India?

Foreign investors today hold over Rs 80 Lakh crore assets in the Indian markets. However, in recent months, they have pulled out more than Rs 80,000 crore from equities because of global uncertainty. To stop this outflow, SEBI launched a new system called SWAGAT-FI (Single Window Automatic and Generalised Access for Trusted Foreign Investors).

The new framework makes it easier and faster for trusted investors such as regulated insurance companies, government-owned funds, sovereign wealth funds and pension funds to invest in India. SWAGAT-FI allows one demat account for all routes with simpler KYC rules and allows eligible foreign investors to register for 10 years.

SWAGAT-FI will keep foreign investors interested in India as the process reduces bureaucratic paperwork and enhances global investor convenience, making India an investor-friendly market. At Enterslice, we help foreign investors by checking their eligibility, handling the registration and guiding them on how to use SWAGAT-FI for a smooth investment in India.

What is SWAGAT-FI?

SWAGAT FI is a new investment framework introduced by SEBI (Securities and Exchange Board of India). SWAGAT-FI is a Single Window Automatic & Generalised Access for Trusted Foreign Investors, which is aimed at simplifying the compliance process, reducing the documentation process and making India an attractive destination for global investment.

The SWAGAT-FI is known as a “diplomatic passport” for specific categories of foreign investment. It is a framework that is designed to ensure the long-term stability of foreign funds in India. In India, over 80 lakh crore assets are being managed by foreign investors. As stated by SEBI, over 70% of the assets owned by these foreign investors are qualified for the SWAGAT-FI framework. This initiative is expected to attract more stable and long-term global capital into the Indian market.

How Does SWAGAT-FI Work?

Through the Single Window Automatic & Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework, SEBI will review and verify to classify different foreign investors as low-risk and allow them a quick entry to the Indian market. Investors that are government-owned or the investors that are rigorously monitored and regulated, such as global insurance companies, central banks, sovereign wealth funds, pension funds and large mutual funds, can be classified under low-risk.

When you are eligible as an investor, you can register through SWAGAT-FI, which merges multiple routes for investment under one legal process. This will ensure compliance and minimal duplication of KYC, making it easier for you to manage your account.

What is FII?

Foreign Institutional Investor (FII) is a foreign-based entity that is investing in a country where it is not registered. FIIs are important participants in the global market because they bring large amounts of capital to invest in the international market and contribute to the economy.

In India, the Foreign Institutional Investor are of two types, Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs). The FDIs are a long-term investment involving control over businesses and assets while FPI is a short-term investment such as stocks and bonds. FIIs is a sub-category of FPIs such as pension funds, hedge funds and mutual funds.

Role of Foreign Institutional Investors (FII) in India’s Economy

TheForeign Institutional Investor (FII) plays an important role in the Indian economy. Countries with a good number of FII have a fast-growing economy because foreign money brings new capital, ideas and standards. India has a high-growth economy and multi-national companies available for investment, making FII common in the country.

However, to participate in the Indian market, all the Foreign Institutional Investors in India will have to register with the Securities and Exchange Board of India (SEBI).

FII also increase liquidity in the stock and bond markets, which will allow you and other investors to efficiently buy and sell shares and securities more easily within the country. This will also ensure compliant corporate governance standards, bring global best practices and improve the quality of the Indian market.

However, if the Foreign Institutional Investors (FIIs) suddenly withdraw or move their money, it can cause volatility, sudden market fluctuations, and create a sharp market distress, which can make the economy of India vulnerable. That is why India is initiating new rules and frameworks like SWAGAT-FI to make it easier for FIIs to stay and invest for the long term in the country.

Will SWAGAT-FI Keep FIIs Invested in India?

SWAGAT-FI (Single Window Automatic & Generalised Access for Trusted Foreign Investors) can be a strategic initiative by India to keep the Foreign Institutional Investors from continuing to invest in India.

SWAGAT-FI is designed to help FIIs stay invested in the country by giving them easier entry, simpler compliance to minimise repeated compliance requirements, a unified registration process and a longer 10-year validity. This will save the foreign investors time and money by reducing the risk of mistakes in compliance. These benefits will make many FIIs keep their money in India for the long run.

The key reasons why SWAGAT-FI will help keep FIIs invested in India include:

SWAGAT-FI framework is for the trusted investors, allowing a unified registration process across multiple investment routes for the FPIs and Foreign Venture Capital Investors (FVCIs).

The SWAGAT-FI registration process minimises repeated compliance requirements and simplifies documentation for the eligible investors.

SEBI classifies low-risk investors eligible for SWAGAT-FI registration, making the market entry to India easier and faster.  

SWAGAT-FI allows FIIs a 10-year approval compared to a 3-year cycle, ensuring a long-term validity, which reduces administrative hassle.

SWAGAT-FI offers a transparent and cost-effective registration process for eligible foreign investors.

The approval of SWAGAT-FI will ensure that foreign investors can participate without structural limitations in India.

SEBI has removed specific restrictions in SWAGAT-FI registration of FIIs, allowing for larger and more flexible investments.

Foreign Portfolio Investors (FPIs) Assets in India

On June 30th, 2025, there were 11,913 registered Foreign Portfolio Investors (FPIs) in India with assets worth ₹80.83 lakh crore. According to the Securities and Exchange Board of India (SEBI), more than 70% of the foreign investors who are holding these assets are qualified under the SWAGAT-FI framework, which shows that FIIs are one of the most significant investor groups in India’s capital markets.

As of September 12th, 2025, there are 12,017 registered Foreign Portfolio Investors (FPIs) in India. The number of FII registrations has increased, which reflects the growing confidence of global investors in India’s capital markets.

Long-Term Compliance Approval for Simplified Operations

The SWAGAT-FI registration allows you as a foreign investor to get a 10-year approval, which provides a long-term validity compared to the previous 3 or 5-year cycle, making it easier for the FIIs by reducing the compliance and the administration burden.

With one time registration and a single demat account across all investment routes, you can now manage your Indian investments with less paperwork. This long-term compliance approval ensures faster entry and exit with simplified operations for payment of fees and documentation reviews of Know Your Customer (KYC). Therefore, you do not have to worry about frequent regulatory hurdles, which makes India an investor-friendly country for the FII.

Benefits of SWAGAT-FI for the FII in India

The benefits of SWAGAT-FI for the Foreign Institutional Investor (FII) in India include:

Increased FII  

The implementation of SWAGAT-FI simplifies the market entry for foreign investors, which will encourage more stable and increased inflow of Foreign Institutional Investors.

Reduced Compliance Burden

SWAGAT-FI has reduced the compliance burden for foreign investors by simplifying documentation and compliance requirements. It allows 10-year validity registration, which allows the foreign investors to reduce the administrative and compliance burden.

Improved Global Positioning

The launch and implementation of SWAGAT-FI will enhance India’s position globally and improve India’s reputation as one of the world’s most investor-friendly countries for FII.

Improved Market Depth

India’s greater international participation will improve and boost the liquidity in both the debt market and the equity markets by attracting foreign capital to the country.

Alignment with the Global Best Practices

SWAGAT-FI framework aligns with the global best practice by allowing a single registration and demat account, which matches the international standards. It also reduces paperwork and compliance costs, making Indian markets accessible and foreign investor-friendly.

To Wrap Up

The Securities and Exchange Board of India (SEBI) has launched SWAGAT-FI in a move to make India an attractive global investment destination. The Foreign Institutional Investor (FII) in India manage over ₹80.83 lakh crore in India’s markets with more than 11,913 registered Foreign Portfolio Investors (FPIs) as of June 2025.

However, India has seen an increase; by 12th September, there are over 12,000 registered Foreign Portfolio Investors (FPIs), reflecting confidence in India’s investment market. The recent implementation of SWAGAT-FI will also show how India is serious about attracting and retaining long-term foreign capital.

Since the launch of SWAGAT-FI, SEBI has made numerous improvements for the FIIs, such as simplified and quick market entry, unified registration flexibility and a longer 10-year registration validity. SWAGAT-FI will therefore help retain the Rs 80 lakh crore assets by giving the FIIs a lower regulatory burden and a smooth registration process.

Enterslice can assist you in assessing the eligibility under SWAGAT-FI to ensure you complete the registration process correctly. Our expert team will manage the ongoing regulatory compliance so that your investment journey in India is smooth and secure.

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