India has spent years trying to attract foreign capital. Now, the Securities and Exchange Board of India, or SEBI, wants to take the next step. It wants more global fund managers to make investment decisions from India.
SEBI Chairman Tuhin Kanta Pandey said in August 2026 that the regulator was working on a framework to support global fund-management activity from India. Proposed changes to the portfolio manager rules could allow fund managers based in India to make trading decisions for funds that invest in overseas markets.
The idea is simple. India should not only be a market where global funds put their money. It should also become a place where global investment decisions are made.
That shift could have a much wider effect on India’s financial sector. It could create more high-value jobs, strengthen local financial expertise and help India compete with financial centres such as Singapore, Dubai and London.
What Does “Onshore” Mean?
In this context, “onshore” means that the people who make investment decisions are based in India.
Consider a global fund that invests in shares across Asia. Its fund may be based in an overseas financial centre. Its legal structure may also remain outside India. But its portfolio manager could sit in Singapore and decide which shares to buy or sell.
The research team could sit in India. The technology team could also sit in India. The fund could even have a large operation here. But the final investment decision could still come from outside the country.
SEBI wants to make it easier for that decision-maker to sit in India.
This does not mean that every foreign fund must move its legal home to India. The fund itself can remain offshore. The key change is the location of the investment manager and the people who control the portfolio.
That distinction is important because the real value of asset management does not come only from moving money. It comes from research, analysis, portfolio construction, risk control and capital allocation.
Why the Decision-Maker Matters
A fund manager is a high-value part of the financial system.
A large global fund can employ analysts, portfolio managers, traders, risk experts, technology specialists and compliance professionals. These people create knowledge and make decisions that affect billions of dollars.
If these teams work from Singapore, London or New York, much of that economic activity stays in those financial centres.
If the same work takes place in Mumbai, Bengaluru, Delhi or GIFT City, India gets a larger share of that activity.
This can create well-paid financial jobs and help local professionals gain experience with global markets. It can also support related sectors such as legal services, accounting, technology, market data and financial research.
For India, this is a chance to move higher up the financial-services value chain.
India Already Has the Talent
One reason behind the push is India’s large pool of financial talent.
Indian professionals already work for global asset managers, investment banks, hedge funds and other financial institutions. Many of them understand international markets and have experience with global portfolios.
The problem is that the final investment decision may still have to come from an office outside India.
Pandey has said there is significant talent in India, but regulatory requirements can make it difficult for people based here to manage global funds directly. The proposed changes could help such managers take global trading decisions from India rather than from Singapore or other overseas centres.
The policy goal, therefore, is not simply to create more finance jobs. It is also to retain people who already have the skills required for global investing.
The Tax Problem Was a Major Barrier
There is an important tax issue behind this debate.
A foreign fund may want an investment manager in India. But if the manager is based here, the fund could face questions about whether its activities create a taxable presence in India.
That risk can make an overseas fund reluctant to use an Indian-based manager.
India addressed part of this problem through Section 9A of the Income Tax Act. The provision says that, subject to specific conditions, the fund-management activity of an eligible fund manager in India does not by itself create a business connection for the offshore fund. It also says that an eligible foreign fund does not become an Indian tax resident merely because its eligible fund manager is based in India.
This was an important step because it gave foreign funds greater certainty.
The framework, however, comes with conditions. For example, an eligible fund must be based outside India and meet several requirements. Indian participation in such a fund is generally subject to a 5% limit under the specified rules.
So India has already created a tax framework that allows certain offshore funds to use Indian managers. SEBI’s current effort is about making the regulatory environment more suitable for the next stage.
SEBI Had Started This Journey Earlier
The current push is not a completely new idea.
In January 2017, SEBI amended its Portfolio Managers Regulations to create a framework for fund managers who provide services to overseas funds. This came after the introduction of Section 9A of the Income Tax Act.
SEBI created a category called Eligible Fund Managers. Existing portfolio managers and new applicants that met the required conditions could provide fund-management services to eligible overseas funds.
The 2017 framework also recognised that managing an overseas fund is different from managing a normal domestic portfolio. As a result, certain requirements under the regular portfolio-manager rules did not apply to eligible fund managers for their overseas-fund work.
The latest proposal can therefore be seen as another step in a policy path that has been under development for several years.
GIFT City Has a Big Role
The push also fits with India’s effort to build GIFT City into an international financial centre.
The International Financial Services Centres Authority, or IFSCA, regulates financial activity at GIFT International Financial Services Centre. Its fund-management framework has expanded in recent years. IFSCA now operates under its 2025 Fund Management Regulations and continues to issue rules and guidance for fund-management entities.
GIFT City gives India a platform designed for international financial activity.
That makes it possible to imagine a structure where a global investment team sits in India, operates under a financial-services framework designed for international business and manages money across several countries.
The broader goal is to make India a place where global capital can be managed, not just invested.
Why Global Funds May Care
For an international fund manager, location matters.
Singapore, London, New York and other financial centres have large pools of talent, deep financial markets and established legal and regulatory systems. A manager will compare these factors before moving an important investment operation.
India therefore needs rules that are clear and practical.
If a global portfolio manager can sit in India but faces too many restrictions, the firm may simply keep the role overseas.
This is why SEBI’s proposed changes matter. The regulator needs to provide enough oversight while also allowing global investment professionals to operate without unnecessary barriers.
The aim is not to weaken regulation. It is to make the rules fit a modern global fund-management business.
What India Could Gain
If more global funds place their decision-making teams in India, the benefits could spread beyond the fund industry.
More global investment activity could create demand for research analysts, traders, technology professionals, lawyers, accountants and risk specialists.
Indian professionals could also gain more exposure to global asset classes. That could help build deeper expertise in international equities, bonds, derivatives and alternative investments.
Over time, a larger fund-management industry could support India’s ambition to become a major financial centre.
There could also be benefits for India’s financial infrastructure. More global fund activity could create demand for better technology, data services, research platforms and risk systems.
The Challenge for SEBI
The opportunity is large, but the policy needs a careful balance.
SEBI must protect investors and maintain market oversight. At the same time, the rules cannot be so difficult that international firms prefer to keep their decision-makers abroad.
Tax rules also need to remain clear. A foreign fund must know when the presence of an Indian manager is acceptable and when it could create a tax or regulatory problem.
There is also a need to avoid artificial structures. The purpose of the reform is to bring real investment expertise and real decision-making to India, rather than merely shift paperwork from one country to another.
That is why the details of the proposed portfolio-manager framework will matter.
A Shift in India’s Financial Ambition
SEBI’s latest move reflects a larger change in India’s financial ambitions.
For decades, the main focus was on attracting foreign money into Indian markets. Now the ambition is broader. India wants to attract the people, firms and expertise that decide where global money goes.
The distinction may look small, but it is significant.
An offshore fund that buys Indian shares creates capital flows into India. A global fund manager who sits in India and decides where billions of dollars should go creates a much larger financial ecosystem around that activity.
SEBI’s proposed changes are aimed at making that second model easier.
If the framework succeeds, India could gradually move from being mainly a destination for global investment to becoming a base for global investment management. That would put Indian financial professionals closer to the centre of international capital allocation and could strengthen India’s position as a global financial hub.
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