Three people said India’s market regulator plans to relax disclosure
requirements for overseas funds classified as "high-risk." The 2023 rules,
introduced to curb concentrated holdings in Indian listed companies, spawned
investor complaints and legal challenges; proposed adjustments aim to fix those
unintended consequences. Expanded exemptions would give funds more time to
disclose investor identities, easing entry for thematic funds. Foreign investors
have posted record net sales of $26.88bn of Indian assets since the start of
2026. Under current rules a "high-risk" fund is one with over 50% of its India
assets invested in the same corporate group; that threshold drew complaints from
Asian and US investor associations and legal challenges, prompting the review.
"Regulators are focusing on addressing pain points and attracting long-term
overseas capital," one source said.
