T-Plus Settlement (T+1)

T+1 settlement refers to the settlement cycle in which trades executed on a stock exchange are settled — meaning shares are delivered to the buyer's Demat account and funds are transferred to the seller — on the next trading day (T+1) after the trade date (T). India transitioned from a T+2 settlement cycle to T+1 for equity trades in a phased manner completed in January 2023, making it one of the fastest settlement cycles among major global equity markets. The shift to T+1 significantly reduces settlement risk — the risk that either party defaults between the trade date and settlement date — and improves capital efficiency by releasing funds and securities faster. For retail investors, T+1 means shares purchased today are available for delivery or further trading by the next morning. For foreign institutional investors, the faster cycle initially created operational challenges related to currency conversion timelines, which SEBI and RBI have progressively addressed through regulatory adjustments and FX flexibility for FPIs.