India planning to reduce paperwork for foreign investors buying govt debt

India's capital markets regulator, the Securities and Exchange Board of India (SEBI), is actively working on simplifying procedures for foreign investors focusing on sovereign debt, aligning with the country's entry into international bond indexes. According to a source familiar, SEBI is collaborating with the Reserve Bank of India (RBI) to streamline the registration and maintenance processes. The process involves multiple steps, including RBI's know-your-customer checks for bank account opening, SEBI’s documentation for depository account setup, and registration with the tax department.

SEBI intends to reduce its information requirements, such as disclosing investor groups and beneficial ownership, which primarily regulate equity and corporate debt investors. Meanwhile, requirements mandated by the RBI and revenue departments will remain unchanged. The initiative aims to attract global funds that previously accessed Indian sovereign debt through offshore derivatives. Oversight of investments limited to sovereign bonds will continue to be managed through Indian depositories. While concerns persist among investors regarding taxation and procedural complexities, the reduction in bureaucratic hurdles may reinforce India's attractiveness as an investment destination.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.