Explanation:

The Securities and Exchange Board of India (SEBI) has clarified that foreign portfolio investors (FPIs) from Mauritius will continue to be eligible for registration as foreign investors in India but subject to increased monitoring. The regulatory clarification was necessitated after Mauritius was placed in the list of ‘jurisdictions under increased monitoring’, commonly referred to as the ‘Grey List’. This led to apprehensions that the Mauritius-based FPIs will not be able to trade in the Indian capital market. This assumes significance since Mauritius accounts for the second-largest chunk of foreign investments, as per data from the National Securities Depository Limited (NSDL). In January 2020, Mauritius-based FPIs had total assets under custody (AUC) of ?4.37 lakh crore, second only to that of the U.S. with?11.63 lakh crore.