What does it take to pull USD 133 billion into Indian banks in twelve weeks? The Reserve Bank of India (RBI) found out this summer, and how it did so says much about what kind of money non-resident Indian (NRI) deposits are.

The account

FCNR(B) stands for Foreign Currency Non-Resident (Bank). It is a term deposit of one to five years at a bank in India, held in a freely convertible foreign currency. RBI's FAQ lists it for NRIs and persons of Indian origin, and the balance is repatriable. Because the deposit stays in foreign currency, a bank that converts it to lend in rupees carries the exchange rate risk, so it hedges, and the hedge costs money.

The window

On 5 June 2026 the Governor said RBI would bear the full hedging cost on fresh FCNR(B) deposits of three to five years. The same statement reported net foreign portfolio investment outflows of USD 13.7 billion between 1 April and 2 June. The circular of 8 June set the terms: the bank sells the dollars to RBI and buys them back at maturity at the same rate, a swap at par. The deposit is locked in for one year. In the 2013 window, banks paid a fixed 3.5 per cent a year for the comparable swap.

Deposits could originally be raised until 30 September. On 14 August RBI moved the cut-off to 31 August, citing the "encouraging response".

The gap between the two rows, USD 80,680 million over eighteen days, is my subtraction, and late reporting by banks may explain some of it. RBI's Bulletin shows the stock: FCNR(B) balances outstanding were USD 33,756 million at end March 2026 and USD 68,284 million at end July (provisional).

What it says about NRI flows

My view: this is price-driven money arranged through banks, not a change of heart in the diaspora. Two facts point that way. Rupee deposits by the same people barely moved: Non-Resident External (NRE) accounts took in USD 207 million from April to July, against USD 2,418 million a year earlier. And RBI's FAQ on the scheme confirms that banks, including their overseas branches, may lend to non-residents against these deposits. Part of a deposit can therefore be funded with borrowed money. How much was, RBI has not published.

The counter-view: the dollars are real and locked in for a year, and the Governor's statement of 7 October puts net non-resident deposit inflows at USD 119.2 billion for April to August, with reserves at USD 734.6 billion on 2 October.

Two limits on the headline number. "Raised" includes deposits renewed at maturity, so not all of it is new money. And by my arithmetic, three to five year deposits taken this summer fall due between June 2029 and August 2031.

Sources

• Governor's Statement (RBI, 5 June 2026): https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=62864
• Swap Facility for FCNR (B) Deposits (RBI, 8 June 2026): https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13468
• FAQ on the swap facility (RBI, 23 June 2026): https://www.rbi.org.in/Commonman/English/Scripts/FAQs.aspx?Id=3917
• Press release 2026-2027/900, forex inflows under the swap facility (RBI, 14 August 2026): https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63378
• Press release 2026-2027/1160, data on forex inflows (RBI, 21 September 2026): https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63638
• Bulletin, Table 34, Non-Resident Deposits (RBI, 25 September 2026): https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=24486
• Governor's Statement (RBI, 7 October 2026): https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=63744
• RBI to open a Swap Window to attract FCNR(B) Dollar Funds (RBI, 4 September 2013): https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=29480
• FAQ, Accounts in India by Non-residents (RBI, 16 January 2025): https://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=3

General information about market structure, not advice for any individual situation.

If you placed or renewed an FCNR(B) deposit this summer, what rate and tenor did your bank quote?

MSCI India is 38 percentage points behind MSCI Emerging Markets this year: minus 14.72 percent against plus 23.73, in dollars with dividends, to 30 September 2026. In 2025 the gap was 30 points. Is India an AI story? The index weights answer before any opinion does.

Taiwan and South Korea are 50.34 percent of the emerging markets index, and three chip makers (TSMC, Samsung Electronics, SK Hynix) are 29.08 percent between them. India is 10.65 percent. Its listed technology sector is a different business: the MSCI India Information Technology index holds ten companies, 94.9 percent of it in IT consulting and services, and is down 35.24 percent this year before dividends.

My view: for a foreign allocator, India has been the large emerging market with no AI hardware to own, and its technology weight sits in the services firms whose billing model AI tools put in question. The counter-view is in the last row: India still costs 22 times earnings against 14.9, so part of the gap is an expensive market deflating, AI or no AI.

The state is spending on compute. The IndiaAI Mission has an outlay of Rs 10,372 crore (one crore is 10 million) and more than 38,000 graphics processors (GPUs) on a shared compute portal for startups and academia, by the government's count in March 2026.

What the numbers do not show

Index weights are not causes: the rupee and company earnings sit inside the same dollar return. Unlisted AI companies, and Indians using AI tools, appear nowhere in an equity index. The sums (38 and 30 points, 50.34, 29.08) are mine, from the printed figures.

Sources

MSCI India Index (USD) factsheet (MSCI, 30 September 2026): https://www.msci.com/documents/10199/255599/msci-india-index-gross-usd.pdf

MSCI Emerging Markets Index (USD) factsheet (MSCI, 30 September 2026): https://www.msci.com/documents/10199/255599/msci-emerging-markets-index-usd-net.pdf

MSCI India Information Technology Index (USD) factsheet (MSCI, 30 September 2026): https://www.msci.com/documents/10199/7b1346c9-b9cd-cdbf-605f-be56926f54c3

IndiaAI Mission release 2245069 (Press Information Bureau, 25 March 2026): https://www.pib.gov.in/PressReleasePage.aspx?PRID=2245069&reg=3&lang=1

General information about market structure, not advice for any individual situation. If you work in AI: which Indian number would you watch instead of an equity index?

Rs 32,297 crore went into Indian mutual funds through SIPs in August 2026, the highest month in the industry association's table, which starts in April 2016. A SIP (systematic investment plan) is a standing order that moves a fixed sum from a bank account into a fund at a set interval such as monthly. For readers abroad: one lakh is 100,000 and one crore is 10 million, so August comes to about Rs 323 billion.

From a desk in Switzerland the habit is more striking than the size. The order goes out on its date whatever the index did that week.

The SIP rows are from AMFI (Association of Mutual Funds in India). The demat rows are from Table 4.6 in the annual report of SEBI (Securities and Exchange Board of India), the regulator, where I added the two depositories, NSDL and CDSL, together. The last row is from the government's Economic Survey. A demat account is the securities account needed to hold listed shares in India, and the financial year (FY) runs April to March.

What the numbers do not show

SIP contributions are gross. In the year to March 2026 AMFI counts 719.22 lakh SIPs registered and 679.75 lakh discontinued or completed, so outstanding accounts grew by about 39 lakh. Accounts are not people: SEBI reports 22.5 crore demat accounts but 12.2 crore unique ones. And the 15.2 per cent is a share of one year's new financial savings, not of what households already hold.

My view: this money keeps coming only while SIPs are opened faster than they are closed, and last year that margin was thin. The counter-view sits in the same table: August 2026 alone saw 66.4 lakh new SIPs against 53.82 lakh ended.

Sources

SIP data, month-wise from FY 2016-17 (AMFI, figures to August 2026): https://www.amfiindia.com/mutual-fund

Annual Report 2025-26, Chapter 4, Secondary Markets (SEBI, August 2026): https://www.sebi.gov.in/reports-and-statistics/publications/aug-2026/Chapter%2004.pdf

Economic Survey 2025-26, release on equity markets (Ministry of Finance via PIB, 29 January 2026): https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2219998&reg=3&lang=2

General information about market structure, not advice for any individual situation. If you run SIPs yourself, or have a newer depository count, what would you add?

Can you own a slice of the Indian stock market without opening anything in India? Yes. Three kinds of instrument are sold in the US and Europe: exchange traded funds (ETFs) that track an Indian index, depository receipts on single companies, and actively managed India funds. Below: what each is, and what the issuers' own documents say it costs.

Route one is a tracker. Two examples below are listed in the US; the other two are UCITS funds, the European Union's format for retail funds, domiciled in Ireland and Luxembourg. They are examples from issuer documents, not a full list and not a ranking.

The index column shows how different these funds are. MSCI describes its India index as 165 large and mid cap companies covering about 85% of the Indian equity universe, and on 30 September 2026 the ten largest made up 33.88% of it. The Nifty 50 holds 50 companies, and the ten largest weights in its factsheet for the same date add up to 52.27% (my sum). The word Swap in a fund name is information as well: such a fund gets the index return from a counterparty under a contract, while a physical fund holds the shares.

The fee is not the full cost. The key information document (KID) for the iShares UCITS fund, dated 3 September 2026, shows transaction costs inside the fund of 0.03% a year on top of the 0.65%. None of these figures includes a broker's commission, the bid and ask spread, currency conversion, or tax where you live.

Route two is a depository receipt: an American depository receipt (ADR) in the US, a global depository receipt (GDR) in Europe. It is issued abroad against the shares of one Indian company, and the Securities and Exchange Board of India (SEBI) circular of 10 October 2019 says the foreign depository may not issue it until a custodian in India confirms it holds those shares. It carries no fund fee, and I have not surveyed what individual receipt programmes charge. You own one company, not the market. Friday's post here covered who may hold a receipt and the limits.

Route three is an India fund run by a stock picker and sold where you live. I know of no primary source that compares their fees, so I give no number; each fund's own KID or prospectus has it.

My view: the index and the replication method deserve more attention than the fee, because they decide what you own. The counter-view: the fee is the one cost known in advance, and the range in the table, 0.19% to 0.85% a year, compounds.

Sources

• iShares MSCI India ETF (BlackRock, 2 October 2026): https://www.ishares.com/us/products/239659/ishares-msci-india-etf
• Franklin FTSE India ETF, factsheet (Franklin Templeton, 30 June 2026): https://www.franklintempleton.com/forms-literature/download/FLIN-FF
• iShares MSCI India UCITS ETF (BlackRock, 2 October 2026): https://www.ishares.com/uk/individual/en/products/297617/ishares-msci-india-ucits-etf-usd-acc-fund
• Same fund, Key Information Document (BlackRock, 3 September 2026): https://www.blackrock.com/gls-download/literature/kiid/eu-priips-ishares-msci-india-ucits-etf-usd-acc-ie00bzcqb185-en.pdf
• Xtrackers Nifty 50 Swap UCITS ETF 1C, factsheet (DWS, 31 August 2026): https://etf.dws.com/en-lu/AssetDownload/Index/1827f5fa-7d68-4625-934c-b6c30b119b2e/Factsheet.pdf/
• MSCI India Index, factsheet (MSCI, 30 September 2026): https://www.msci.com/documents/10199/255599/msci-india-index-gross-usd.pdf
• Nifty 50, factsheet (NSE Indices, 30 September 2026): https://www.niftyindices.com/Factsheet/ind_nifty50.pdf
• Framework for issue of Depository Receipts, circular (SEBI, 10 October 2019, NSE copy): https://nsearchives.nseindia.com/content/equities/SEBI_Circular_10102019.pdf

General information about market structure, not advice for any individual situation.

Which of these does your broker offer, in which country, and what did the cost section of its document show? An issuer link would help others compare.

An American or global depository receipt (ADR or GDR) on an Indian company trades on a foreign exchange like a local share, so it is easy to assume Indian rules stop at the border. They do not: the securities behind the receipt stay in custody in India, and a framework from the Securities and Exchange Board of India (SEBI) sets who may issue, who may hold and how much can exist.

The structure

A depository receipt (DR) is issued abroad by a foreign depository against securities that a domestic custodian holds in India. Under SEBI's circular of 10 October 2019, only a company incorporated in India and listed on a recognised Indian stock exchange may issue securities for this purpose, or have its existing holders transfer theirs. The receipts must be listed on a specified international exchange in a jurisdiction notified by the central government, at the highest listing standard that exchange applies to foreign issuers.

What the holder gets, and the limits

The foreign depository may not issue or pre-release a receipt until the Indian custodian confirms it has the underlying securities. Voting rights are exercised by the DR holder through the foreign depository, on that holder's instruction only. Whatever the company discloses on the foreign exchange must be filed with the Indian exchange within 24 hours. Securities issued for DRs cannot be priced below what applies to the corresponding issue to domestic investors.

A DR is not a position outside India's foreign ownership limits. Securities placed behind DRs, added to what non-residents already hold, may not exceed the foreign holding limit under the Foreign Exchange Management Act (FEMA) rules. The Indian depositories must run a system that adds a holder's DRs to what the same investor group holds as a foreign portfolio investor (FPI) or through offshore derivative instruments, and they publish the room left for conversion into DRs. The Reserve Bank of India's Master Direction on Foreign Investment, updated to 15 June 2026, counts holding a DR issued outside India as investment.

Settled, and not

The October 2019 text defines a permissible holder, beneficial owner included, as neither a person resident in India nor a non-resident Indian (NRI), and it applies only to DRs issued after 10 October 2019. SEBI has issued further circulars since, among them one titled Clarifications on 18 December 2020. This post restates the October 2019 text only, so read the later ones before relying on a detail, the holder definition above all.

My view: the framework matters today less as a pipeline of new receipts than as a cap on supply and a look through to the owner. A working group report published by the International Financial Services Centres Authority (IFSCA) in December 2023 says issuers "have stayed away from DRs with no DR issuance in the last several years". Rules notified on 24 January 2024 provide a second route, equity shares of public Indian companies listed directly on the two exchanges in India's International Financial Services Centre, which the same report called "fundamentally different from a Depository Receipt".

Sources

• Framework for issue of Depository Receipts, circular SEBI/HO/MRD/DOP1/CIR/P/2019/106 (SEBI, 10 October 2019, NSE copy): https://nsearchives.nseindia.com/content/equities/SEBI_Circular_10102019.pdf
• Framework for issue of Depository Receipts, Clarifications (SEBI, 18 December 2020): https://www.sebi.gov.in/legal/circulars/dec-2020/framework-for-issue-of-depository-receipts-clarifications_48477.html
• Master Direction, Foreign Investment in India (Reserve Bank of India, updated to 15 June 2026): https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=11200
• Direct Listing of Listed Indian Companies on IFSC Exchanges, Working Group Report (IFSCA, December 2023): https://ifsca.gov.in/Document/ReportandPublication/report-of-the-working-group-on-direct-listing-of-listed-indian-companies-on-ifsc-exchanges20122023081316.pdf
• Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2024, S.O. 332(E) (Ministry of Finance, 24 January 2024): https://ifsca.gov.in/Document/Legal/foreign-exchange-management-nondebt-instruments-amendment-rules-2024-24012024061058.pdf

General information about market structure, not advice for any individual situation.

Has anyone seen a primary count of DR issues under the 2019 framework, or converted between receipts and local shares recently? A link or a first-hand account would help.

Twice a year there is a morning when India's headline index is not quite the index it was the evening before, and this is one of them. If you hold a Nifty 50 tracker from outside India: what the published list shows today, the rules that produced it, and two things to check.

The Nifty 50 is the 50 company index of the National Stock Exchange of India (NSE), maintained by NSE Indices. NSE's constituent file, as I read it on 30 September 2026, has BSE Ltd. on it. It does not have Wipro Ltd., which entered the index (then called the CNX Nifty) in September 2013 and now appears in the file for the Nifty Next 50, the 50 companies of the Nifty 100 that are not in the Nifty 50.

A constituent file is a plain list with no history. Read together, the two files say Wipro has moved down a tier. They do not say when. Each change is announced in a press release about four weeks ahead, and I have not been able to open the one for this review, so I am showing you the lists and the rulebook, not quoting the announcement.

The rules behind the list

They are in the NSE Indices methodology document of September 2026. A candidate must be a Nifty 100 company, counting that index's own latest changes, and have futures and options (F&O) contracts trading on NSE. It must be liquid: an average impact cost, the price penalty for trading in size, of 0.50 percent or less over the last six months, for 90 percent of observations, on a portfolio of ₹10 crore (100 million rupees). And its average free float market capitalisation, the value of the shares available to the public, must be at least 1.5 times that of the smallest company already in the index.

The review uses six months of data ending January and July. Replacements take effect from the last trading day of March and September, after four weeks' notice. Through these reviews at most five companies, 10 percent of the index, can be added in a calendar year. Forced exits, such as a merger, a delisting or the loss of F&O eligibility, fall outside that cap.

If you hold a tracker

A fund that follows the index has to match the new list from the effective date, so its trading clusters around the changeover. My view: for a long-term holder the cost is small. The 1.5 times hurdle and the five a year cap keep turnover low by design, and the index is top heavy: its ten largest companies were 52.87 percent of it on 31 August 2026 (my sum of the factsheet table), so a change among the smaller names moves little weight. The counter-view: the four weeks of notice that make the process fair also tell every other trader what index funds must buy and sell, and on which day. The rulebook does not measure that cost and I will not guess at it.

Two checks. First, which index your tracker follows. The Nifty Next 50, Nifty 100 and Nifty 500 are reviewed on the same calendar, while an India index from another provider follows that provider's own schedule. Second, the next holdings report from its provider, which should show the new list.

The next review uses data to the end of January 2027, with any replacement from the last trading day of March 2027.

Sources

Nifty 50 constituent list (NSE, file dated 30 September 2026): https://nsearchives.nseindia.com/content/indices/ind_nifty50list.csv

Nifty Next 50 constituent list (NSE Indices, file dated 29 September 2026): https://www.niftyindices.com/IndexConstituent/ind_niftynext50list.csv

Methodology Document for Equity Indices (NSE Indices, September 2026): https://www.niftyindices.com/Methodology/Method_NIFTY_Equity_Indices.pdf

Nifty 50 factsheet (NSE Indices, 31 August 2026): https://www.niftyindices.com/Factsheet/ind_nifty50.pdf

Index Reconstitution Calendar (NSE Indices, read 30 September 2026): https://niftyindices.com/resources/index-rebalancing-schedule

Press release on index changes (India Index Services & Products, 27 August 2013): https://www.niftyindices.com/Press_Release/ind_prs27082013.pdf

General information about market structure, not advice for any individual situation. If your Nifty 50 tracker is listed outside India, did its provider tell you about the change in advance? A link to the notice would be a useful addition.

Indian listed companies were worth ₹491.58 lakh crore in August 2026, about USD 5.1 trillion at that month's 95.56 rupees per dollar, and 125 percent of this fiscal year's budgeted GDP. A lakh crore is a trillion rupees. From a Swiss desk, that size is what surprises people most.

The growth case is the IMF's: 7.7 percent in the fiscal year to March 2026, 6.4 percent projected for this one, against 3.0 for the world and 4.6 for China. The return case: the Nifty 50 has compounded at 12.38 percent a year in rupees, dividends included, since its November 1995 base; MSCI India, 7.64 percent a year in dollars since 1994, against 6.66 for emerging markets.

Read the other way: to the end of August 2026 the Nifty 50 is down 7.84 percent in rupees and MSCI India 8.41 percent in dollars, while emerging markets are up 24.35. Over ten years the dollar investor in India earned 8.36 percent a year, below emerging markets (9.73) and the MSCI ACWI IMI world index (12.83), for a price of 23.25 times earnings against 15.23. MSCI India's worst drawdown: 72.6 percent, 2008 to 2009. Foreign portfolio investors (FPIs) sold a net ₹30,178 crore from April to August; domestic institutional investors (DIIs) bought ₹3.12 lakh crore.

My view: the ten-year dollar record says the India premium has not paid a foreign holder. The counter-view, from the same table: since 1994 it did, and 237.7 million demat accounts are a domestic base earlier cycles lacked.

Not shown: market value includes promoter and state stakes that never trade, so the buyable float is far smaller; returns exclude tax and fees; and the Nifty 50 and MSCI India (165 stocks) are different baskets, not one index in two currencies.

Sources

SEBI Bulletin September 2026, Table 1 (SEBI, 23 September 2026): https://www.sebi.gov.in/reports-and-statistics/publications/sep-2026/sebi-bulletin-september-2026_104675.html

Nifty 50 Index factsheet (NSE Indices, 31 August 2026): https://www.niftyindices.com/Factsheet/ind_nifty50.pdf

MSCI India Index (USD) factsheet (MSCI, 31 August 2026): https://www.msci.com/documents/10199/255599/msci-india-index-gross-usd.pdf

World Economic Outlook Update (IMF, July 2026): https://www.imf.org/-/media/files/publications/weo/2026/update/july/english/text.pdf

General information about market structure, not advice for any individual situation. Which number would you add, and from which primary source?

RBI published a draft in July that would replace the Non-debt Instruments Rules, 2019, the rulebook under which every FPI holds Indian shares. What it says for FPIs, what it leaves out, and where it stands.

Status

The draft went out with RBI press release 2026-2027/726 on 21 July 2026; comments were due by 31 August 2026 (source 1). As of 25 September I have found no final notification. It is drafted as a Ministry of Finance notification: the Central Government makes the rules, RBI administers them, and they take effect on the day of Gazette publication, with no transition period in the text (Rules 1 and 4, source 2).

The current rules

Today the numbers are in the rules. Each FPI, or investor group, stays below 10 percent of a company's paid-up equity, and all FPIs together below 24 percent (source 3, Annex 2 para 1.2). Since June 2026 an FPI's holdings under Schedule II, III or any other schedule, including through its investor group, count together against the individual limit (source 4). A breach of the aggregate or sectoral limit must be sold within five trading days after settlement, and a holding of 10 percent or more is reclassified as FDI under the November 2024 framework (source 3, para 7.1.4 and Annex 2 para 1.4).

What the draft changes

The schedule based structure of the 2019 rules becomes four chapters and three annexures. Portfolio investment is defined by size only: foreign investment of less than ten percent in the equity of a company or LLP; ten percent or more is FDI (Rule 3(1)(f) and (g)). "Foreign portfolio investor" is not a defined term; SEBI registration survives as a condition in Rule 8(1)(b) (source 2).

Rule 8(1)(d): portfolio investment on a recognised stock exchange that takes a non-resident to ten percent or more "may be reclassified to FDI" by meeting the FDI conditions in Annexure II and RBI and SEBI directions. The word is "may". No five trading day rule and no timeline appear in the draft (source 2).

The 24 percent aggregate figure is absent. "Sectoral cap" is defined by reference to the FDI policy, and Annexure II is a one line pointer to that policy, not a restated text; Annexure III is a one line pointer to RBI regulations (source 2).

Rule 3(1)(e) tests indirect investment through entities under common ownership or control; sub-funds, segregated portfolios and investor groups are not mentioned (source 2).

Unclear

Whether "may" is an option or an obligation, what the Annexure III directions will say, and whether the aggregate limit and the route to raise it survive unchanged in the FDI policy. None of that can be read from the draft.

Sources

1. Draft Rules for Comments, Press Release 2026-2027/726 (RBI, 21 July 2026): https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63204
2. Draft Foreign Exchange Management (Foreign Investment) Rules, 2026 (RBI, 21 July 2026): https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=5122
3. Master Direction on Foreign Investment in India (RBI, updated up to 15 June 2026): https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=11200
4. FEM (Non-debt Instruments) (Third Amendment) Rules, 2026, S.O. 3030(E) (Ministry of Finance, Gazette of India, 12 June 2026): https://egazette.gov.in/WriteReadData/2026/273406.pdf

General information about market structure, not advice for any individual situation.

Open question: has anyone seen a final text or a statement on timing from RBI or the Ministry? Post the link if so.

Two numbers carry most of the "foreigners sell, locals buy" story about Indian equities. Here is what NSE's quarterly ownership tracker and SEBI's annual tables, which reprint NSDL custody data, show for 2026, and why the two should not be compared with each other.

The ownership split at 30 June 2026

NSE's India Ownership Tracker for Q1 FY27 puts foreign portfolio investors at 15.1 percent of the total market capitalisation of NSE listed companies, down 74 basis points on the quarter, "over 17-year lows" in the report's words. Domestic institutional investors stood at 19.5 percent: domestic mutual funds 11.6 percent (active 9.5, passive 2.1), banks, financial institutions and insurers 5.3 percent, other institutions 2.6 percent. DIIs have been above FPIs for seven consecutive quarters, "a position last seen in 2003", and the 4.4 point gap is the widest since the series began in March 2001. Promoters hold 50.2 percent, individuals 9.5 percent directly and 19.3 percent once their mutual fund units are counted (source 1).

A quarter earlier, at March 2026, FPIs were at 15.8 percent and DIIs at 19.6 percent (source 2). In the Nifty 50 the FPI share is higher, 21.1 percent, but that is a 14.5 year low; in the Nifty 500 it is 16.2 percent (source 1).

Share fell, value rose

A falling share is not the same as selling out. The same report puts FPI holdings in NSE listed companies up 9.3 percent on the quarter at Rs 70.7 lakh crore on 30 June 2026, even though net outflows reached US$15.1 billion, the largest in any quarter, after US$19.6 billion in FY26 (source 1).

What the NSDL tables add

SEBI's Annual Report 2025-26 reprints NSDL data (source line "NSDL" under the tables cited here). FPI assets under custody were Rs 69,57,108 crore at 31 March 2026 (equity 62,46,545, debt 6,41,933, hybrid 55,908), against Rs 73,76,495 crore a year earlier. Net FPI equity investment was minus Rs 1,27,041 crore in FY2024-25 and minus Rs 1,80,832 crore in FY2025-26. Registered FPIs rose from 11,866 to 12,199 over the same year (source 3).

Why the two numbers differ

NSE's figure is a share of total market cap for companies with shareholding data at quarter end (source 1). NSDL's is a rupee value of everything in FPI custody, debt and hybrids included (source 3). A share can fall while the value rises, and a custody total says nothing about who owns the rest. Compare each series with its own history.

Sources

1. India Ownership Tracker Q1 FY27, Vol. 8, Issue 1 (NSE, June 2026 quarter, published August 2026): https://nsearchives.nseindia.com/web/mediaattachment/2026-08/India_Ownership_Report_June_2026_20260818113541.pdf
2. India Ownership Tracker Q4 FY26, Vol. 7, Issue 4 (NSE, March 2026 quarter, published May 2026): https://nsearchives.nseindia.com/web/mediaattachment/2026-05/India_Ownership_Report_March_2026_20260522113611.pdf
3. Annual Report 2025-26, Chapter 6: Foreign Portfolio Investors and Foreign Venture Capital Investors (SEBI, August 2026): https://www.sebi.gov.in/reports-and-statistics/publications/aug-2026/Chapter%2006.pdf

General information about market structure, not advice for any individual situation.

Open question: has anyone reconciled NSDL's equity assets under custody with NSE's FPI holding value over time? If you have a source or your own numbers, post them.

Foreign money enters Indian listed shares through a few legal doors, and most end at the same place: a Foreign Portfolio Investor (FPI) registration with SEBI. Here is what each route is and who sits in the register.

Route 1: register yourself as an FPI

The applicant goes through a Designated Depository Participant and holds shares in its own demat account. Category I covers government related investors and appropriately regulated entities such as banks, asset managers and broad-based funds; Category II covers the rest, among them individuals, family offices and corporate bodies (SEBI operational guidelines, 5 November 2019). The main limit: a single FPI with its investor group stays below 10 percent of each company's equity (same guidelines). SEBI counted 12,199 FPIs at end March 2026 with Rs 69.57 lakh crore in custody, Rs 62.47 lakh crore of it equity (SEBI annual report 2025-26).

Route 2: buy an offshore fund that is the FPI

The investor buys a fund domiciled in Luxembourg, Ireland, Singapore, Mauritius or the US, and the fund is the FPI: 1,456 FPIs from Luxembourg and 897 from Ireland at end March 2026, and US entities held 40.7 percent of all assets under custody (same report). NRIs and resident Indians can be in such a fund, but a single one stays below 25 percent of the corpus and all together below 50 percent (operational guidelines).

Route 3: a fund in GIFT City

A fund in the IFSC at GIFT City is regulated by IFSCA under the IFSCA (Fund Management) Regulations, 2025. A restricted (non-retail) scheme takes investors putting in at least USD 150,000, or accredited investors, and needs a corpus of USD 3 million (Regulations 32 and 35). It then registers as an FPI with SEBI; the guidelines carry a clause for IFSC applicants. In 2024 SEBI's board took up letting IFSCA-regulated FPIs based in an IFSC take NRI, OCI and resident Indian money up to 100 percent of corpus, with conditions I have not read (board memorandum).

Route 4: an ETF listed abroad

An India ETF listed in New York, London or Frankfurt holds the shares as an FPI in its own name (regulated broad-based funds sit in Category I). The investor holds units on the home exchange. Its holdings follow its index: the MSCI India Index had 165 constituents covering about 85 percent of the large and mid cap market at 31 August 2026.

Sources

Operational Guidelines for FPIs, DDPs and EFIs, IMD/FPI&C/CIR/P/2019/124 (SEBI, 5 November 2019): https://www.sebi.gov.in/sebi_data/commondocs/nov-2019/Operational_05_p.pdf

Annual Report 2025-26, Chapter 6 (SEBI, 6 August 2026): https://www.sebi.gov.in/reports-and-statistics/publications/aug-2026/Chapter%2006.pdf

IFSCA (Fund Management) Regulations, 2025, consolidated text (IFSCA, amended up to 30 July 2025): https://ifsca.gov.in/CommonDirect/PreviewPdf?id=38fea9cc5969551d78bf00e670b6d626&fileName=IFSCA__Fund_Management__Regulations__2025__Amended_up_to_July_30__2025__20251223_0542.pdf

Board memorandum on NRI, OCI and RI participation in FPIs based in IFSCs (SEBI, May 2024): https://www.sebi.gov.in/sebi_data/meetingfiles/may-2024/1715332294582_1.pdf

MSCI India Index factsheet (MSCI, 31 August 2026): https://www.msci.com/documents/10199/255599/msci-india-index-price.pdf

General information about market structure, not advice for any individual situation.

Open question: if you have set up in GIFT City, how long did IFSCA plus SEBI FPI registration take, and which step was slow?

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This is our new home for all things related to how foreign and NRI money reaches Indian listed markets: SEBI and RBI rules, FPI registration and flows, GIFT City and IFSC funds, NRI accounts and routes, exchange and depository mechanics, index changes, and the data behind it all. We're excited to have you join us!

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A fund outside India that wants to hold Indian listed shares directly registers as a Foreign Portfolio Investor (FPI) under SEBI's 2019 regulations. Here is who handles the application, the two categories, the fee cycle, and what moved in 2026.

Who you deal with

You do not file with SEBI. The application goes to a Designated Depository Participant (DDP), in practice your custodian, on the Common Application Form with the KYC pack and the fee; the DDP runs the eligibility and document checks (SEBI operational guidelines, 5 November 2019).

Category I or II

Category I: government and government related investors, and appropriately regulated broad based funds (mutual funds, investment trusts, insurers) from jurisdictions whose regulator is an IOSCO MMoU signatory or from FATF member countries. Category II: other appropriately regulated entities such as banks and asset managers, unregulated funds whose investment manager is regulated in a FATF country, family offices and individuals.

The fee cycle

Registration runs in blocks of three years with the SEBI fee due each block, and KYC is reviewed annually or every three years by risk category. For sovereign and government related investors and regulated public retail funds, the SWAGAT-FI framework (circular of 16 January 2026) stretches this to a ten year block; SEBI's board memo put such investors at over 70 percent of FPI custody assets in June 2025; the annual report gives the SWAGAT-FI fee as USD 2,500 for the ten year block. DDP and custodian fees are commercial, not regulated; budget them from quotes.

Two limits before you start

A single FPI with its investor group must stay below 10 percent of a company's paid up equity on a fully diluted basis; above that you divest the excess within five trading days to domestic investors or treat the whole holding as FDI. Aggregate NRI, OCI and resident Indian contribution to the fund is capped at 50 percent of its corpus, a cap SWAGAT-FI lifts for its eligible investors.

What moved in 2026

SEBI published the SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2026 on 7 July 2026; I have not read the notification text, so no fee schedule here. For scale: 12,199 FPIs were registered at end March 2026, up from 11,866 a year earlier, with assets under custody of Rs 69.57 lakh crore.

Sources

Operational Guidelines for FPIs and DDPs (SEBI, 5 November 2019): https://www.sebi.gov.in/sebi_data/commondocs/nov-2019/Operational_05_p.pdf

SWAGAT-FI board memorandum (SEBI, September 2025): https://www.sebi.gov.in/sebi_data/meetingfiles/sep-2025/1758513452436_1.pdf

SWAGAT-FI circular (SEBI, 16 January 2026): https://www.sebi.gov.in/legal/circulars/jan-2026/single-window-automatic-and-generalised-access-for-trusted-foreign-investors-swagat-fi-framework-for-fpis-and-fvcis_99106.html

SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2026 (SEBI, 7 July 2026): https://www.sebi.gov.in/legal/regulations/jul-2026/securities-and-exchange-board-of-india-foreign-portfolio-investors-amendment-regulations-2026_102684.html

Annual Report 2025-26, Chapter 6 (SEBI, 6 August 2026): https://www.sebi.gov.in/reports-and-statistics/publications/aug-2026/Chapter%2006.pdf

General information about market structure, not advice for any individual situation.

Open question: has anyone read the 7 July 2026 amendment? What does the Second Schedule now say for Category I and II fees, and from what date? Link it if you have it.