India's T+0 Challenge: NSE Pushes Same-Day Stock Settlement Ahead of Wall Street
Khushi V Rangdhol Jul 13, 2025 04:04
India's NSE aims for same-day (T+0) stock settlement by November 2025, seeking to outpace Wall Street's T+1. Challenges remain, but potential is high.
India Tries to Lap Wall Street—Again
When the U.S. Securities and Exchange Commission finally shifted Wall Street to T+1 settlement in May 2024, it trumpeted a 25 per cent cut in margin requirements and a “safer, faster market” for 58 per cent of American households that own stocks.
In Mumbai, the reaction was polite applause—followed by a shrug. The National Stock Exchange (NSE) had already run on T+1 for every one of its 5,000-plus listed securities since January 2023. And, barely two months after New York’s big switch, India’s regulators opened a beta T+0 cycle: same-day cash-market settlement for a pilot basket of 25 highly-traded stocks.
Now, with New York still digesting T+1, Mumbai wants to make same-day settlement a permanent—if optional—feature. Until recently, the plan was to force every retail broker to offer T+0 by 1 May 2025; after industry push-back, the Securities and Exchange Board of India (SEBI) has given firms six extra months, pushing the “go-live” date to 1 November 2025.
How the T+0 Sandbox Works:
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Trading window: 09:30–13:30 IST, so clearing banks can square positions by close of business.
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Price guardrails: Quotes must stay within ±100 basis points of the regular T+1 book to curb arbitrage.
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Scope creep: From the original 25 names, SEBI expanded eligibility to 500 stocks last December; the NSE has posted monthly add-on circulars ever since.
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Institutional access: A January 2025 circular enabled custodial participants—crucial for foreign portfolio investors—to test the rail.nseindia.com
Volumes are still thin: Citi estimates fewer than 0.5 per cent of daily notional turns up in the T+0 book, mostly retail tickets under ₹25,000. But SEBI chair Madhabi Puri Buch insists scale will come once the optional rail covers every Nifty-50 constituent and broker systems are “seamlessly interoperable” with T+1.
Why India Thinks It Can Outrun the U.S.
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Legacy advantage. India’s clearing and depository system—NSCCL and CDSL/NSDL—already runs batch netting five times a day. Compressing to one extra cycle is operationally simpler than America’s spaghetti of broker-dealers and transfer agents.
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Retail float. Over 80 million Indians now have demat accounts. Regulators believe a faster cash turn will entice new, small-ticket investors who currently trade crypto or futures for instant gratification.
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Capital-efficiency bragging rights. After NSE trumped the U.S. with T+1, officials see T+0 as a branding exercise: proof that India can be both high-growth and high-tech.
The Catch: Foreign Money and Funding Frictions
Global custodians warn that same-day delivery could trap FX liquidity. Foreign investors already pre-fund Indian trades because the rupee is only partially convertible; shaving another day off the clock leaves even less time to swap dollars for rupees. Citi’s custody desk says it has had to add a 04:00 IST shift to capture U.S. allocation files.
SEBI’s answer is incrementalism. The T+0 rail remains voluntary; for now, foreign portfolio investors (FPIs) can stick to T+1. And if the November deadline still feels rushed, the regulator has signalled more “phased exemptions”—a nod to complaints that the beta favours well-capitalised domestic brokers.
Wall Street’s View: Nice Idea, Enormous Lift
Across the Hudson, industry groups are tempering expectations. DTCC’s latest white paper says a future T+0 in the U.S. is technically possible but would “require 24/7 funding pipelines and real-time securities lending,” neither of which exists at scale.The Securities Industry and Financial Markets Association (SIFMA) goes further, calling T+0 a case of “diminishing returns” that could increase fails if affirmation windows shrink too far. Asset-servicing giant Northern Trust warns that a jump to real-time clearing will force “fundamental process rewrites” in corporate-action handling and FX.
Put bluntly: Manhattan may applaud India’s experiment, but few U.S. brokers want to replicate it—yet.
Global Scoreboard
Sources: NSE, SEBI, SEC, DTCC white paper, Reuters reporting.
The next six months
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August 2025 – NSE widens T+0 list to 800 stocks; brokers must prove end-of-day funding reconciliation in test net.
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November 1 2025 – Deadline for all brokers to offer T+0 to retail clients, barring a further SEBI extension.
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Q1 2026 – SEBI board to debate whether the rail can move from “voluntary” to “co-existing”—regulator-speak for nudging big-cap trades into T+0 by default.
Could India Leapfrog Twice?
Sceptics note that same-day settlement is hardly new—Shanghai has run partial T+0 for decades. The difference is scale and legal certainty. If Mumbai can bundle a billion-share session into a clean same-day net without snarling foreign cash, it will pressure other G-20 markets to follow.
For now, the contest is lopsided: Manhattan is still proving T+1 works, while Mumbai experiments with a rail that clears before the closing bell. Whether the gambit becomes India’s second leap ahead—or a liquidity headache—is the question brokers on two continents will be watching as the November deadline ticks closer.
Image source: Shutterstock
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