Research and Articles

• SEBI has operationalised the SWAGAT-FI framework through a detailed SOP, providing procedural clarity for eligible FPIs and FVCIs.

• SWAGAT-FI investors will benefit from a 10-year registration validity, streamlined KYC and renewal requirements, and a single-window process for FVCI registration for eligible FPIs. GIFT IFSC Retail Schemes have been expressly recognised as satisfying the prescribed Public Retail Fund eligibility conditions for SWAGAT-FI status.

At its core, the SWAGAT-FI Framework is intended to simplify and streamline investment access for objectively identified, low-risk institutional foreign investors, having regard to factors such as their regulated status, diversified investor base, and independence in governance and control. Such investors are proposed to benefit from a simplified registration mechanism, longer registration validity, reduced compliance requirements, and the ability to obtain both FPI and FVCI registrations through a unified single-window process.

The SOP constitutes the first comprehensive operational document issued under the framework and provides Designated Depository Participant (“DDP”) and applicants with detailed procedural guidance, verification standards, and implementation-related clarifications necessary for operationalising the framework in practice.

A. Registration Process and Single-Window Benefit

The registration process under the SWAGAT-FI Framework is DDP-driven, whereby an applicant seeking registration or reclassification is required to submit a SWAGAT requisition letter (in the format prescribed under Annexure A to the SOP) to its DDP. The DDP is responsible for verifying the applicant’s eligibility and submitting the application to the Depository for further processing.

To streamline verification, the SOP prescribes a tiered evidentiary framework to be followed by the DDP:

• Primary evidence: The DDP may rely upon the indicative guidelines and conditions set out under Annexure B [for Public Retail Funds (“PRFs”)] and Annexure C (for pension funds), including references to regulatory websites, official registers, and publicly available material issued by the relevant home-jurisdiction regulator. Where eligibility can be independently verified through such regulatory sources, reliance may be placed on the same.

• Secondary evidence: In cases where eligibility cannot be established through the regulatory framework, regulator website, or other material contemplated under the SOP, the applicant is required to furnish original or certified/attested copies of certificates or documents issued by the relevant regulator or authority, or constitutive documents of the FPI/FVCI (such as the Prospectus, Information Memorandum, or Offer Document), specifically identifying the applicable provisions. Importantly, the DDP is expressly prohibited from relying solely on applicant declarations in such instances, and all certifications/attestations are required to comply with the authorisation standards prescribed under the applicable Master Circular.

The SOP further introduces 2 (two) significant carve-outs in relation to the eligibility conditions applicable to PRFs:

• Skin-in-the-game exemption: The general requirement that contributors to the fund should not participate in its day-to-day operations, intended to preserve the blind-pool character of the structure, will not apply to contributions made by the investment manager solely for the purpose of meeting applicable “skin-in-the-game” requirements.

• Permissibility of same-group investment managers:  The requirement that the investment manager be independent from contributors is clarified not to prohibit an investment manager belonging to the same group as the FPI from managing or controlling the fund. This carve-out is particularly relevant for captive or affiliated fund structures commonly seen in several overseas jurisdictions.

A notable structural benefit introduced under the SWAGAT-FI Framework is the integrated access to both FPI and FVCI registration. An entity registered as a SWAGAT-FI FPI is permitted to obtain registration as an FVCI without being required to furnish any additional documentation, thereby significantly reducing procedural and compliance burdens for institutional investors seeking exposure to both listed securities and the venture capital ecosystem in India.

To enable clear classification and effective supervisory oversight, the SOP mandates Depository to implement a dedicated SWAGAT-FI identifier/flag on the FPI Registration Portal, with separate tagging for SWAGAT-FI-FPI and SWAGAT-FI-FVCI registrations. In accordance with the above requirement, National Securities Depository Limited (“NSDL”) has introduced the SWAGAT-FI flag in the CAF Registration and FVCI Registration modules for all fresh registration applications.³

This mechanism is intended to facilitate regulatory monitoring and accurate identification of entities registered under the SWAGAT FI framework..

B. Ten-Year Registration, KYC Periodicity and Fee Structure

In line with the SWAGAT-FI Circular, SWAGAT-FI FPIs are granted a registration validity of 10 years, representing a significant departure from the shorter renewal cycle ordinarily applicable to non-SWAGAT FPIs. Correspondingly, KYC review requirements for SWAGAT-FI FPIs are to be undertaken once every 10 years (or at such other periodicity as may be prescribed by the RBI for RBI-regulated entities), subject to the risk categorisation framework adopted by the relevant DDP or custodian.

Further, the renewal framework for SWAGAT-FI FPIs have been substantially streamlined. To continue registration for a subsequent 10-year term, a SWAGAT-FI FPI is required only to pay the prescribed renewal fees to the DDP and disclose any changes in information since the previous submission, thereby significantly reducing the compliance and documentation burden typically associated with standard FPI re-registration processes.

The SOP prescribes a consolidated fee structure (payable in USD, plus applicable taxes) for SWAGAT-FI registrations and renewals. Where an entity is registered as both an FPI and an FVCI under the SWAGAT-FI framework, a single PAN is used and the regulatory fee is levied only once for the applicable 10-year registration period. Existing FPIs transitioning to the SWAGAT-FI framework are not required to pay any additional fee at the time of transition, with the applicable fee becoming payable only upon the next renewal. In such cases, any corresponding FVCI registration is required to be aligned with the FPI renewal cycle.

C. Eligible Categories for SWAGAT-FI

SWAGAT-FI status may be opted for at the time of initial FPI or FVCI registration, or by way of reclassification for existing FPIs or FVCIs that meet the eligibility criteria. Further, SWAGAT-FI applying or already registered as FPIs shall also have the option to register as FVCIs, without the need for any further documentation. The SOP specifies 4 (four) eligible sub-categories of FPIs and FVCIs that may apply for SWAGAT-FI status:

• Government and Government-Related Investors: FPIs already registered in this sub-category are required to provide only a declaration of intent without any need for additional documentation.This includescentral banks, sovereign wealth funds, international or multilateral organisations or agencies, and entities controlled or at least 75% directly or indirectly owned by such Government or Government-related investors.

• Appropriately Regulated Mutual Funds, Unit Trusts and PRFs:

  This category broadly encompasses funds that are open for subscription by retail investors, without limiting participation exclusively to accredited, qualified, or professional investors.  Annexure B provides indicative guidance for verification of eligibility conditions across 25 jurisdictions which the applicant are required to demonstrate within regulatory framework of their home jurisdiction.

  For each jurisdiction, Annexure B maps the 5 (five) core PRF conditions namely: (i) Open for subscription to retail (without any specific investor type requirements like accredited investors); (ii) operation through a blind-pool (i.e., common portfolio) structure; (iii) diversification of investors and investments; (iv) contributors to the applicant should not have control over the applicant’s day-to-day operations t; and (v) independence of the investment manager from such contributors, against specific statutory provisions, regulatory articles, and verification parameters. Conditions that are sufficiently addressed under the relevant regulatory framework are marked as verified, whereas conditions requiring additional document-level substantiation are identified as “To Be Verified” (“TBV”). This jurisdiction-specific mapping is expected to substantially reduce the practical verification burden on DDPs when assessing PRF eligibility across multiple regulatory regimes.

  A particularly significant development is the inclusion of retail schemes launched in Gujarat International Finance Tec-City(“GIFT IFSC Retail Schemes”) within Annexure B. GIFT IFSC Retail Schemes constituted under the International Financial Services Centres Authority (Fund Management) Regulations, 2025 (“FM Regulations”) are expressly recognised as satisfying all 5 (five) PRF conditions. The framework acknowledges that the fund management entity (“FME”) manages such schemes in a fiduciary capacity, remains independently regulated by International Financial Service Authority (“IFSCA”), and exercises investment discretion independently of scheme investors. This marks the first instance of a domestically structured IFSC investment vehicle being expressly recognised as qualifying for SWAGAT-FI status.

• Appropriately Regulated Insurance Companies: Insurance companies without segregated portfolio structures are subject to the same jurisdictional and regulatory eligibility requirements applicable to FPIs under Annexure B of the SOP. Further, an insurance or reinsurance company that is eligible for registration as Government-related investor, however has taken registration in the sub-category of appropriately regulated Insurance / reinsurance company shall be eligible for SWAGAT-FI status as Government or Government related investor.

• Appropriately Regulated Pension Funds: The SOP recognises pension funds that are governed, supervised, or recognised by a statutory authority, regulatory body, or tax authority responsible for pension oversight in the relevant jurisdiction. The scope of this category has been expressly broadened to include: (i) pension schemes established by corporate or commercial establishments; (ii) pension plans of international or multilateral organisations; (iii) government or state-established pension schemes; and (iv) pension funds that may not be directly licensed in their home jurisdiction but operate pursuant to, and remain subject to oversight obligations under, an applicable statutory framework. Annexure C to the SOP provides jurisdiction-specific guidance for determining pension fund eligibility across 13 jurisdictions, including references to the relevant regulators and verification web-links.

  Further, a pension fund otherwise eligible for classification as a mutual fund or Government/Government-related investor may also seek registration under the corresponding SWAGAT-FI eligible category.

The SOP represents a landmark development in India’s foreign portfolio investment framework. For the first time, SEBI has introduced a structured, jurisdiction-specific verification matrix for determining institutional investor eligibility, effectively transforming what was previously a broad policy construct into a granular, practitioner-oriented operational framework. The introduction of a 10-year registration validity, streamlined renewal requirements, and a no-cost transition mechanism for existing FPIs directly addresses several long-standing operational and compliance concerns faced by large institutional investors. Equally significant is the inclusion of GIFT IFSC Retail Schemes within Annexure B.

That said, certain aspects of the SOP may benefit from further regulatory clarification. While the DDP-led verification model is operationally efficient, it also creates the possibility of inconsistent interpretational outcomes, particularly in relation to conditions classified as TBV across multiple jurisdictions. In this regard, the issuance of supplementary FAQs or a dedicated DDP guidance note would significantly aid in harmonising market practice and reducing interpretational uncertainty.’

Additionally, the SOP does not expressly address the regulatory consequences where a SWAGAT-FI investor ceases to satisfy the prescribed eligibility criteria during the subsistence of the 10-year registration period — for instance, as a result of restructuring, deregistration, or a change in fund characteristics. The absence of a clear transition or remediation framework for such situations remains an important regulatory gap.

A further issue, highlighted in our earlier analysis of the SWAGAT-FI Circular, also remains unresolved. Specifically, ambiguity persists regarding whether an entity holding dual registration as both an FPI and FVCI under the SWAGAT-FI framework would be permitted to continue investing in the securities of the same Indian company through the FPI route, where it had originally acquired shares in that company (while unlisted) under the FVCI route and the company subsequently undertook an IPO. Under the extant foreign investment regime, including the NDI Rules, simultaneous holdings in the same Indian company under both the FDI and FPI routes are generally not permitted, and investments by FVCIs are typically regarded as forming part of the broader FDI framework.

While a strong interpretational basis exists to argue that such dual exposure should be permissible in cases involving sequential investment stages rather than concurrent route-based investments, explicit regulatory clarification would provide much-needed certainty to SWAGAT-FI investors seeking to practically utilise the framework’s dual-registration architecture.

Harit Gandhi and Chandrashekhar K
You can direct your queries or comments to the authors.

¹https://www.sebi.gov.in/legal/circulars/jan-2026/single-window-automatic-and-generalised-access-for-trusted-foreign-investors-swagat-fi-framework-for-fpis-and-fvcis_99107.html

²https://country.db.com/india/documents/other-information/SOP-for-Registration-as-SWAGAT-FI-dated-27-MAY-2026.pdf

³https://nsdl.co.in/downloadables/pdf/2026-0008-Policy-DDP-SEBI_Circular_on_Single_Window_Automatic_and_Generalised_Access_for_Trusted_Foreign_Investors_(SWAGAT-FI)_framework_for_FPIs_and_FVCIs.pdf