New Delhi, April 2 -- Despite more than a year of discussions between the mutual fund industry and regulators, a resolution on re-distributing the limits on overseas investments remains elusive, leaving newer asset management companies (AMCs) in a regulatory deadlock. While established peers continue to have some exposure to global funds, newer entrants have been unable to launch even a single global fund, facing continued uncertainty amid a lack of clarity from both the markets and the banking regulator.

This persistent stalemate stems from caps on overseas investments imposed by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi). Once these $8 billion aggregate ceilings were breached in 2022 and 2024,...