India's securities market regulator has introduced a significant change allowing foreign investors to settle same-day trades on a net basis. This new rule eliminates the need for upfront payments for each transaction, streamlining the trading process for international participants in India's stock market.

Previously, foreign investors had to make full payments for trades before execution, creating cash flow challenges and limiting trading activity. The net settlement system enables investors to settle multiple trades collectively, reducing capital requirements and transaction costs. This change addresses a longstanding complaint from foreign funds about India's trading infrastructure.

The move is expected to boost foreign investment in Indian markets by improving operational efficiency and reducing barriers to entry. Market participants anticipate increased trading volumes and greater foreign participation, particularly from hedge funds and algorithmic traders who rely on rapid execution. The Securities and Exchange Board of India (SEBI) has been gradually liberalizing market access for foreign investors over the past year.