Startup Policy Forum submits recommendation to Sebi, finance ministry to ease KYC norms for NRIs investing in India

Published 5 June 2026 · finance

Startup Policy Forum (SPF), an alliance representing India's new-age companies, has submitted a note to the Securities and Exchange Board of India (Sebi) and the

Startup Policy Forum (SPF), an alliance representing India's new-age companies, has submitted a note to the Securities and Exchange Board of India (Sebi) and the finance ministry, highlighting operational challenges faced by non-resident Indians (NRIs) in completing KYC and digital onboarding processes for access to Indian financial services. The industry body has also proposed recommendations to ease these frictions. “We are sharing this in the spirit of supporting a more seamless, accessible and fully digital onboarding framework for NRIs participating in India’s financial services ecosystem,” reads the internal document reviewed by Mint. The move is well-timed, as the central bank proposed on Friday allowing NRIs and Overseas Citizens of India (OCIs) to invest more in shares of listed Indian companies without registering with Sebi as foreign portfolio investors. Currently, an NRI or OCI can own up to 5% of a listed company's shares through the Portfolio Investment Scheme (PIS). The Reserve Bank of India (RBI) has proposed doubling this limit to 10% for each investor. Also Read | Deeptech startup funding nears 2025 levels as VC conviction strengthens Among the fixes SPF has proposed is scrapping the India-only geo-tagging requirement for NRI video KYC, allowing uploaded wet signatures to be verified during video calls in lieu of Aadhaar-based e-sign, and making the KYC systems of Sebi and IFSCA interoperable so that NRIs cleared under one framework are not required to restart the process under the other.

Foreign portfolio investors (FPIs) sold Indian equities worth nearly ₹2.25 trillion in 2026. This exceeded the total outflow of ₹1.66 trillion in 2025. However, industry executives argue that easing investment norms alone may not be enough to attract greater NRI participation unless onboarding and KYC-related hurdles are also addressed. Why looser rules may not be enough “Our members, including some of India’s largest investment platforms, are telling us this friction is real, and it’s costing India inflows it doesn’t need to lose,” said Shweta Rajpal Kohli, president and CEO, Startup Policy Forum. The diaspora is a natural pool of patient capital at a time Indian markets need it most, but NRI investors face unnecessary friction, Kohli said, adding that the regulatory fixes are small relative to the opportunity. One of the key recommendations in the note is to relax the geo-tagging requirements for NRI KYC. Under Sebi’s KYC Master Circular, Video-based Customer Identification Process (V-CIP) applications must geo-tag a customer's live GPS location and verify that the individual is physically located within India. As a result, NRIs residing overseas cannot complete fresh digital onboarding for a securities account from their country of residence, irrespective of the jurisdiction in which they live or its financial crime risk profile.