Reforms, resilience and growth in India
India is set to continue its extraordinary growth in the years ahead – despite global macroeconomic headwinds – with market reforms augmenting opportunities for investors.
As one of the fastest-growing economies in the world, India continues to impress. Its gross domestic product (GDP) measured nearly USD4.2 trillion in 2025, the fourth-largest behind the US, China and Germany, and its economy remains on track for 6.6% growth in the year to March 2026, having expanded 6.5% over the preceding 12 months.
While broader economic challenges remain – particularly recent tariff changes and other factors like technological advances, geopolitical shifts, inflation and the realignment of global trade and capital – India is working to manage them carefully.
As India seeks to attain developed nation status by 2047, the coming two decades will be transformative as opportunities emerge from its push to leverage its demographics and globally renowned digital infrastructure, underpinned by the government’s vision for a Viksit Bharat (Developed India).
India's economic expansion will likely outpace most other major emerging markets in the next five years, according to Invest India, fuelled by pro-business policies and its growing consumer market.
On the financial front, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) have in recent years made enormous strides in enacting reforms to drive foreign investment. These have focused on broadening the market with new asset classes that present growing opportunities for investors while also simplifying access to the market. Here, three areas stand out. The first is that there are far greater opportunities to access a broader set of asset classes, including Indian government bonds (IGBs). The second is that investors can benefit from a range of measures designed to simplify access to India’s markets. The third includes the tax and investment benefits of the GIFT City financial hub.
IGBs provide a useful example of market broadening, with SEBI simplifying registration for foreign portfolio investors (FPIs) seeking exposure to IGBs, making these assets more attractive and accessible.
A recent SEBI Gazette Notification (11 August, 2025) amended the FPI Regulations (2019) to relax compliance for FPIs investing only in IGBs. The amendments, which come into effect on 7 February, 2026, are in the following areas:
Investor group details and limits (Reg 22 – I, 3).
Non-resident Indian (NRI), Overseas Citizen of India (OCI) and Resident Indian Individual (RI) contributions in the corpus of IGB-FPI (Reg 4c – i-iii).
Disclosure timelines for material changes (Reg 22-5).
Additionally, the RBI is assessing the KYC review period, and has decided to allow an electronic trading platform for fixed-income securities, with international investors able to trade IGBs on the platform directly.
Meantime, the transition between regular FPIs and IGB-FPIs will be covered in a Standards Operating Procedure, to be formulated by the Custodians & Designated Depository Participants Standards Setting Forum (CDSSF), which develops standards and guidelines, and whose members include experts from Standard Chartered’s Fixed Income team.
A further significant development is that IGBs have been included into an emerging bond index in mid-2024 in a phased manner to reach a weightage of 10% by March 2025 in fully accessible route (FAR) securities.
India has been included in prominent global bond indices, including the J.P. Morgan Government Bond Index – Emerging Markets (GBI-EM), Bloomberg's Emerging Market Local Currency Government Index (January 2025) and the FTSE Emerging Markets Government Bond Index (scheduled for September 2025). These steps have seen foreign inflows of around USD20 billion into IGBs to date as per market estimates.
Opportunities for foreign investors continue to expand, with SEBI initiatives simplifying investment. Aside from expanding access to IGBs, another recent development is the SWAGAT-FI (Single Window Automatic & Generalised Access for Trusted Foreign Investors) framework, which aims to streamline the entry of foreign investors, including government-owned funds, central banks, sovereign wealth funds and highly regulated public retail funds.
This game-changing framework will provide a unified registration process, extend validity to ten years, and permit the use of a single demat account for FPIs and foreign venture capital investors (FVCIs) – while cutting regulatory paperwork and simplifying compliance procedures for trusted long-term investors.
GIFT City as a special economic zone and India’s first international financial services centre (IFSC) offers ease of investment coupled with tax benefits and streamlined regulatory processes, making it an attractive destination for foreign investors. Additionally, the government’s 2024 announcement that Indian companies could list directly at GIFT-IFSC exchanges, giving them access to global capital and investors, is a keenly awaited development that should deepen investment in local companies.
Standard Chartered was the first foreign bank to establish a branch there and was recently recognised as the best solution provider in GIFT City by The Asset Awards, exemplifying our commitment to support the country’s and our clients’ growth ambitions.
With all these promising initiatives accelerating growth and opportunities, India’s intricate regulatory environment, a variety of rules governing the various investor routes, and the need to comply with local laws and taxes mean many investors require a trusted partner to help them navigate this evolving landscape and take advantage of the most promising developments.
What stands out most is the importance of collaboration – between regulators, market participants, and industry associations – in shaping a system that balance accessibility with resilience. The ability to anticipate change, adapt infrastructure, and channel investor feedback into regulatory dialogue has already helped strengthen India’s role as a leading destination for international capital.
For foreign portfolio investors, success will increasingly depend on combining local insight with global perspective: understanding not just how to enter the market, but how to participate effectively as it evolves. By engaging partners like Standard Chartered, investors can gain the insight and understanding needed to navigate this with confidence. Those who approach India with the right balance of agility and long-term commitment will be best placed to capture the opportunities of this high-potential market.
