In a bold move to reposition India as a premier destination for global capital, the Securities and Exchange Board of India (SEBI), under the leadership of Chairman Tuhin Kanta Pandey, has announced a sweeping set of reforms aimed at enhancing foreign investor participation in Indian markets. These reforms, unveiled in November 2025, are designed to address long-standing bottlenecks in registration, trading costs, and regulatory transparency, while deepening liquidity and improving ease of doing business for foreign portfolio investors (FPIs).
The announcement comes at a critical juncture when India has witnessed significant capital outflows—nearly $17 billion from equities in 2025 alone—amid global trade tensions and tariff escalations. SEBI’s reform package is expected to reverse this trend and restore investor confidence by making India’s financial markets more competitive, accessible, and transparent.
Key Highlights of SEBI’s Reform Agenda
Chairman Tuhin Kanta Pandey emphasized that the reforms are multi-pronged and outcome-driven. The core components of the reform package include:
- Accelerated FPI Registration Process
SEBI aims to reduce the registration timeline from the current average of 4–6 weeks to under 10 working days through digital onboarding and simplified documentation. - Reduction in Trading Costs
Transaction charges in the cash equities segment will be lowered by 20–30%, making India’s markets more cost-effective compared to regional peers. - Streamlined Short-Selling Framework
New guidelines will ease restrictions on short-selling, allowing FPIs to hedge positions more efficiently and participate in market-making activities. - Unified Compliance Portal
A centralized digital interface will be launched to consolidate disclosures, filings, and regulatory updates, reducing compliance fatigue for foreign investors. - Enhanced Market Liquidity Measures
SEBI will incentivize market makers and institutional investors to deepen liquidity in mid-cap and small-cap segments.
Comparative Analysis: India vs Global Markets
To assess the competitiveness of India’s reforms, a comparative snapshot of key market parameters across major economies is instructive:
| Country | Avg FPI Registration Time | Trading Cost (Cash Equities) | Short-Selling Access | Compliance Interface |
|---|---|---|---|---|
| India (Pre-Reform) | 4–6 weeks | 0.05%–0.07% | Restricted | Fragmented |
| India (Post-Reform) | <10 days | 0.03%–0.05% | Streamlined | Unified |
| Singapore | <7 days | 0.02%–0.04% | Open | Unified |
| UK | <5 days | 0.01%–0.03% | Open | Unified |
| US | <3 days | 0.01%–0.02% | Open | Unified |
These reforms are expected to bring India closer to global best practices, particularly in terms of registration speed and cost efficiency.
Sectoral Impact of SEBI Reforms
The reforms are likely to have a differentiated impact across various sectors. The following matrix outlines the expected benefits:
| Sector | Impact Area | Expected Benefit |
|---|---|---|
| Banking & Finance | Liquidity, FPI inflows | Higher valuations, deeper markets |
| Technology | Short-selling, compliance ease | Increased participation |
| Infrastructure | Long-term capital access | Project financing boost |
| MSMEs | Market-making, cost reduction | Easier capital access |
| Green Energy | ESG disclosures, global interest | Sustainable investment inflows |
Timeline and Implementation Strategy
SEBI has laid out a phased roadmap for implementing the reforms over the next 12 months:
| Phase | Timeline | Key Deliverables |
|---|---|---|
| Phase I | Dec 2025 – Mar 2026 | Launch of digital registration portal |
| Phase II | Apr – Jun 2026 | Reduction in transaction fees |
| Phase III | Jul – Sep 2026 | Short-selling framework rollout |
| Phase IV | Oct – Dec 2026 | Unified compliance interface launch |
Each phase will be accompanied by stakeholder consultations, pilot testing, and feedback loops to ensure smooth execution.
Market Reactions and Expert Opinions
The financial community has largely welcomed SEBI’s reform initiative. Leading brokerage firms, asset managers, and foreign institutional investors have expressed optimism about the potential impact on capital flows and market depth.
Ms. Anjali Desai, Head of Emerging Markets Strategy at a global investment firm, noted, “India’s reforms are timely and well-targeted. Faster registration and lower costs will make India more attractive, especially for long-term institutional investors.”
However, some experts have cautioned that execution risks remain. They emphasize the need for robust cybersecurity, seamless integration across platforms, and clarity in regulatory communication.
Challenges and Mitigation Strategies
Despite its ambitious scope, SEBI’s reform agenda faces several challenges:
- Legacy Systems: Integration of old regulatory databases with new digital platforms may pose technical hurdles.
- Regulatory Coordination: Alignment with RBI, Ministry of Finance, and other bodies is essential for holistic reform.
- Investor Education: Foreign investors need clear guidance on navigating the new systems and frameworks.
SEBI plans to address these through dedicated task forces, inter-agency coordination committees, and investor outreach programs.
Long-Term Vision: Making India a Global Financial Hub
SEBI’s reforms are part of a broader vision to position India as a global financial powerhouse. The regulator aims to:
- Increase FPI assets under custody by 50% over the next three years
- Expand India’s share in global equity flows from 1.5% to 3%
- Launch new products such as global depository receipts and ESG-linked instruments
- Promote India as a preferred destination for sovereign wealth funds and pension capital
Conclusion
Chairman Tuhin Kanta Pandey’s reform blueprint represents a transformative moment for India’s capital markets. By addressing structural inefficiencies and aligning with global standards, SEBI is laying the foundation for a more inclusive, liquid, and investor-friendly ecosystem.
The success of these reforms will depend on timely execution, stakeholder engagement, and adaptability to global financial trends. If implemented effectively, India could emerge as a magnet for foreign capital, driving growth, innovation, and financial resilience in the years ahead.
Disclaimer: This article is intended for informational purposes only. The views and projections mentioned are based on current data and expert opinions and are subject to change. Readers are advised to consult official SEBI releases and financial advisors before making investment decisions.
