SEBI relaxes Foreign Portfolio Investor norms, raises eligibility threshold SEBI Increases Eligibility Limit for FPIs to ₹50,000 Crore, Relaxes Investment Rules

Mumbai – In an attempt to increase foreign investments in the Indian economy, the Securities and Exchange Board of India (SEBI) has made a concession in the Foreign Portfolio Investor (FPI) regulations. SEBI Chairman, Tuhin Kanta Pandey, informed that the minimum eligibility for FPIs has now been raised to ₹50,000 crore, a significant change from the earlier level of ₹25,000 crore.

This modification follows the review of FPI regulations after the regulatory reforms introduced in 2019. At that time, the SEBI had rolled out a size-based criterion of ₹25,000 crore with the intention to contain the FPIs’ concentration risk. Subsequent consultations with the FPI Advisory Committee and taking public opinion into consideration, the SEBI board now changed the size criteria by doubling the threshold value to ₹50,000 crore. Pandey said that this change was done to keep pace with changing market conditions and offer more flexibility to big investors.

Although the threshold for eligibility has been doubled, the concentration test remains intact—one of the core features of the regulatory structure. FPIs would continue to have to have a maximum concentration of 50% in their investments, Pandey said. This would help ensure that FPIs have diversified portfolios and not one player in the market with an excessive concentration would dominate the market.

The new regulations are designed to bring in more institutional investors and increase the confidence of foreign investors in the Indian market. With the higher eligibility limit, India is making itself a more viable destination for international capital, particularly as global investors look to leverage the increasing potential of emerging markets such as India.

The move also underscores SEBI’s commitment to continually evolving its regulatory framework in response to market dynamics and the needs of investors. The changes are expected to make the Indian stock market even more accessible and appealing to global players, particularly as the country looks to expand its footprint in the global financial ecosystem.

With the SEBI’s relaxed norms, the Indian market is likely to witness increased foreign investments in the coming months, which could provide a significant boost to the economy, further stabilizing the country’s financial markets.ld to ₹50,000 Crore.