The Securities and Exchange Board of India (SEBI) has released the Securities and Exchange Board of India (Foreign Venture Capital Investors) (Amendment) Regulations, 2025, making targeted changes to the two-decade-old FVCI Regulations, 2000. As India continues to deepen its integration with global capital markets, these amendments are aimed at easing access for “trusted” foreign investors while enhancing regulatory coherence across investment categories.
Below is a comprehensive overview of the amendments and their implications for foreign venture capital investors (FVCIs), fund managers, and India’s startup ecosystem.
Introducing SWAGAT-FI Into FVCI Regulations
One of the most impactful changes is the formal introduction of the Single Window Automatic and Generalised Access for Trusted Foreign Investor (SWAGAT-FI) framework into the FVCI regulatory regime.
A new clause—Regulation 2(1)(ka)—brings SWAGAT-FI into the FVCI ecosystem, aligning it with the definition already introduced under the amended FPI Regulations, 2019. Through this harmonization, SEBI ensures a seamless compliance architecture for trusted foreign investors across both portfolio and venture capital routes.
SWAGAT-FI status is expected to significantly ease the onboarding and compliance process for government-backed investors, sovereign wealth funds, widely held public retail funds, and similar low-risk institutional entities.
Key Exemptions for SWAGAT-FI Entities
SEBI has introduced multiple compliance relaxations for SWAGAT-FI entities within the FVCI framework:
1. Exemption from Certain Registration Requirements (Regulation 3)
A new proviso specifies that sub-regulation (2)—which typically governs the eligibility and application requirements—will not apply to SWAGAT-FIs.
This reduces paperwork, accelerates registration, and offers a smoother entry mechanism.
2. Modified Renewal Fee Structure (Regulation 9)
For SWAGAT-FI registrants, renewal fees will be:
- Payable once every ten years,
- Beginning from the eleventh year of registration.
This extended fee cycle aligns with long-term institutional investment horizons and reduces administrative overhead.
3. Removal of Investment Caps for SWAGAT-FIs (Regulation 11)
The existing limits requiring:
- 66.67% investment into unlisted equity or equity-linked instruments, and
- 33.33% into specified permitted categories,
will not apply to SWAGAT-FIs.
This is a major liberalization. It provides SWAGAT-FI investors with full flexibility in:
- Deploying capital across sectors,
- Structuring investments,
- Allocating between listed and unlisted securities.
Such flexibility is crucial for large-scale strategic funds, sovereign investors, and public retail pools that operate with diverse mandates.
Aligned Amendments in the Second Schedule
Further amendments clarify how renewal fees must be paid:
- SWAGAT-FIs must pay renewal fees in advance for every ten-year block,
- Effective from the eleventh year onward,
- Ensuring continuous and long-term registration validity.
This creates predictability and aligns with SEBI’s broader effort to streamline long-term foreign investment pathways.
When Do These Amendments Take Effect?
All the amendments will take effect 180 days after publication in the Official Gazette—ensuring stakeholders have ample transition time.
A Strategic Move for India’s Venture Investment Landscape
By integrating the SWAGAT-FI framework into venture capital regulations, SEBI is:
- Promoting smoother participation from reliable foreign investors,
- Strengthening India’s appeal as a global investment destination,
- Supporting innovation and startup growth through easier foreign capital flows,
- Harmonizing India’s foreign investment regulations.
Overall, the 2025 amendments mark a forward-looking step toward building a more agile, globally aligned, and investor-friendly regulatory ecosystem.