India Simplifies FPI Regulations in G-Secs to Boost Global Bond Participation.
Banking & Finance
On 18 June 2025, SEBI unveiled a suite of relaxed regulations for Foreign Portfolio Investors (FPIs) investing solely in Indian Government Securities (GāSecs), aimed at boosting long-term participation and aligning with global bond frameworks.
- SEBI introduced the new āGSāFPIā category under which FPIs investing exclusively in sovereign bonds will no longer need to disclose investor group detailsāsimplifying compliance for government-only investing.
- The frequency of Know-Your-Customer (KYC) updates for GSāFPIs has been harmonized with RBI standardsāsignificantly lowering regulatory effort. Additionally, material changes now require disclosure within 30 days, up from 7 days.
- SEBI now allows NRIs, OCIs, and Resident Indians to directly participate in GSāFPI structures, removing earlier restrictions and enhancing Indian investor inclusion in sovereign debt.
Main Point :- (i) Foreign holdings in GāSecs under the Fully Accessible Route (FAR) have surged past ā¹3 trillion (āāÆUSāÆ$35āÆbillion) by March 2025ānearly doubling from ā¹1.74 trillion in March 2024. Inclusion in global indices like JPMorgan and FTSE Russell has been pivotal in attracting these flows.
(ii) This reform was part of SEBIās 18 June 2025 board meeting, which also relaxed startup ESOP norms, simplified PSU delistings, and reformed AIF/AIF co-investment frameworksāsignaling flexibility and global readines.
(iii) By aligning FPI compliance with sovereign bond risks and easing processes, SEBI aims to deepen Indiaās debt markets, lower borrowing costs, and attract stable global capitalāstrengthening the fiscal engine and financial ecosystem.
About SEBI
Chairperson: Tuhin Kanta Pandey
Headquarter : Mumbai
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