Finance Minister P Chidambaram said on Monday he was concerned over inflow of funds into the stock exchanges from unregistered entities.
"Our concern is about inflows from unregistered entities, especially from unregulated jurisdictions... So long as funds come in after registration, they are welcome to do so," he said at the US-India CEO Forum in Mumbai.
The statement comes days after market regulator Securities and Exchange Board of India imposed restrictions on issuance of participatory notes used by unregistered investors to invest in Indian equity markets.
There are about 1,000 registered FIIs and the capital market regulator recently said it would make registrations simpler and faster, Chidambaram said.
He said India wishes to move forward and liberalise the financial sector but it will do so in a careful and calibrated manner.