India’s REITs and InvITs Eye Global Investors as SEBI Proposes New Market Access

By Ansh Gupta

India's estate and infrastructure industries are starting to attract more investors who want long-term income and to own physical assets. Real Estate Investment Trusts and Infrastructure Investment Trusts have already given investors a way to take part in these industries without buying buildings, roads or big infrastructure projects. Now the Securities and Exchange Board of India is trying to move by making these investment options easier for people from other countries to use. On August 4 2026 SEBI suggested a plan that would let Depository Receipts be created for units of REITs and listed InvITs. This idea could let foreign investors get a chance to be part of real estate and infrastructure through a market outside of India. The idea is still being discussed. It brings up a big question: Will it be easier for the world to get involved and help the REIT and InvIT markets in India grow more and become more global?

A New Door for Global Investors

Source - Hindustan Times

At present REIT and InvIT units are in rupees and traded on Indian stock exchanges. Foreign investors can already invest in these units. Only if they follow the rules. However international investors do not have the choice of getting these instruments through a foreign-currency Depository Receipt that is traded on an exchange. SEBIs idea is to fix this problem. A Depository Receipt is a product that a foreign depository issues. It is backed by securities that a domestic custodian holds. It lets investors in another country own parts of securities without buying them in the home market of the company. If the plan is approved an investor from another country might be able to get the benefits of an Indian REIT or an Indian InvIT through a Depository Receipt system. This would be a way, then buying the units directly in the Indian market. This could help make Indian REITs and Indian InvITs more known and easier for investors who are used to buying things on overseas exchanges.

Why SEBI Is Considering the Change

Source - Wikipedia

The proposal comes from recommendations made by SEBI’s Hybrid Securities Advisory Committee (HYSAC). What’s interesting is that the foundation for Depository Receipts already exists in the legal framework. REIT and InvIT units are already considered securities under the Securities Contracts (Regulation) Act. At the time the Foreign Exchange Management framework allowed non-resident investors to put money into these types of investment vehicles. The issue is that the present REIT and InvIT rules do not include a provision that would allow these trusts to issue Depository Receipts. So SEBI is not suggesting an overhaul. Instead it is proposing a targeted update to the rules to make it possible for REITs and InvITs to issue Depository Receipts.

What exactly is SEBI Proposing?

SEBI has put forward rules in the existing regulations. For REITs a new section 14(12A) is being suggested. For InvITs a new section 14(4)(ma) is being proposed. These rules would make it possible to issue Depository Receipts for units of REITs and publicly offered InvITs. This would be done under the conditions and procedures set by SEBI. The regulator is also suggesting a detailed plan through a circular. This plan would follow the system used for equity Depository Receipts. The key thing is that this is a suggestion, not a final rule. SEBI asked for feedback from people in the market by August 25 2026.

Why REITs and InvITs Could Benefit

Source - nhai.gov.

The biggest potential benefit is being able to get money from a larger group of investors. REITs mainly put money into an estate that makes money while InvITs let people invest in things like roads, power lines and other big projects. Both ways let people invest in things that're hard to get to on their own. A DR system could help these options reach people who want to be part of India's success but like to invest using places outside the country and money from countries. For REITs and InvITs more people investing could mean trading and more accurate prices. For India, more people from countries investing could also help make the country's financial markets stronger.

Publicly Listed InvITs Get the Advantage

One important feature of SEBIs proposal is that Privately Listed InvITs are excluded. I think SEBI explains that Privately Listed InvITs have a trading lot size of ₹25 lakh and are subject to restrictions regarding the type of investors who can participate. Once units are represented through a DR and traded on an exchange maintaining those restrictions could become difficult. Therefore the proposed framework is limited to REITs. Publicly listed InvITs. This shows that SEBI is trying to expand access while also considering how existing investor eligibility rules would work in a market.

More Global Money, But Also More Expectations

Opening the door to investors can create new opportunities but it can also lead to higher expectations. International investors usually pay attention to things like transparency, how well a company is managed, how money is shared, the quality of assets, how much debt is involved and how stable the rules are. As REITs and InvITs become easier to access around the world these things might become more important. The trusts might need to keep standards when it comes to sharing information and make sure that the information is clear and easy for international investors to understand. There could also be challenges related to how assets are kept safe, how foreign banks handle the assets rules, from FEMA and how local parts of the company work with depositary receipts. The detailed plan that SEBI has suggested will therefore play a role in deciding how well the whole system operates.

Global Access Does Not Mean Lower Risk

Greater accessibility should not be thought of as investment risk. REITs and InvITs are investments that are connected to the market. Their value can go up or down based on interest rates, how well properties or infrastructure perform, the state of the economy, the amount of debt involved and how investors feel about them. For people investing from countries, changes in currency can add another kind of risk. A person from another country might get a return, from a REIT or InvIT but if the rupee changes value compared to the person's own currency that can affect the final return. So the new DR mechanism could make it easier for Indian assets to be accessed. Investors will still have to know about the things they are investing in and the risks that come with them.

What It Could Mean for India’s Capital Markets

Source - The Federal

The proposal comes at a time when India's REIT and InvIT ecosystem is becoming more established. An expanding global investor base could help these instruments become an important part of India's capital market. For companies and infrastructure sponsors REITs and InvITs can provide a route for unlocking capital from completed assets and funding future growth. For investors they provide another way to diversify beyond shares and bonds. If the DR framework is eventually implemented successfully India's REIT and InvIT market could become more connected with capital markets.

The Road Ahead

SEBIs proposal does not intend to change how REITs and InvITs operate. Instead SEBIs proposal aims to create a path that allows investors outside India to access REITs and InvITs. The proposed framework tries to close a gap by adding enabling provisions to the REIT and InvIT regulations and by establishing a detailed operational framework for Depository Receipts. Whether SEBIs proposal succeeds will depend on how the final regulations resolve regulatory and investor‑protection issues. For investors SEBIs proposal is worth watching because it could make Indian real estate and infrastructure exposure easier to obtain. For India SEBIs proposal could bring international capital, deeper markets and greater global visibility, for the REIT and InvIT ecosystem.