T+1 is our pole star, says FM Nirmala Sitharaman

At the historic 150th anniversary of the BSE, Finance Minister Nirmala Sitharaman hailed India’s T+1 settlement regime as a cornerstone of its capital market evolution—one that has not only transformed domestic market infrastructure but also made global peers sit up and take notice.

Recalling her recent visit to the U.K. for the annual economic and financial dialogue, Sitharaman shared how the mention of India’s T+1 settlement sparked a mix of admiration and surprise among British officials. “It gave me immense satisfaction to sit in London and say that we are far ahead,” she said. “T+1 is a pole star they have yet to reach.”

The remarks come at a time when India’s markets have reached significant milestones. With market capitalisation crossing $5 trillion in FY25, the country has emerged as the world’s fifth-largest equity market. Over the past five years, Indian indices have delivered a 131% dollar-adjusted return—outpacing global benchmarks and underscoring investor confidence in the Indian growth story. The stat stands out given that India’s weight in the MSCI Emerging Market Index has nearly tripled from 6.3% in 2013 to 18.5% in 2025.

Sitharaman also launched the BSE India 150 Index, which aims to chronicle India’s capital market transformation and serve as a beacon for innovation and structural progress.

While the T+1 settlement cycle is a matter of national pride, the Securities and Exchange Board of India (Sebi) is carefully navigating the next frontier: optional T+0 settlement. The regulator introduced the optional T+0 settlement mechanism in March 2024 with a pilot of 25 stocks. In a phased expansion, from January 31, 2025, the regulator ushered the settlement mechanism to the Top 500 stocks by market cap, starting with the bottom 100 and with 100 more stocks to be added each month.

Sebi chairman Tuhin Kanta Pandey told Fortune India that the move towards same-day settlement should not be mistaken for an overt tilt towards intraday trading.

Instead, Pandey emphasised that shorter settlement cycles are about boosting investor trust, improving capital efficiency, and minimising risk—not altering the fundamental nature of market participation. “Why should an investor’s money be locked up? You’re only trying to ensure that money doesn’t lie with brokers—it lies with investors,” he noted.

India’s steady and calibrated path—from T+3 to T+2, to T+1, and now optional T+0—has set global benchmarks. As Sitharaman underlined, the country’s market reforms are not just domestic milestones but signals to the world that India is building one of the most resilient and efficient market ecosystems globally.