Reserve Bank of India (RBI) Announces Measures to Attract Foreign Capital

Key facts

• The Reserve Bank of India (RBI) expanded the Fully Accessible Route (FAR) to include all new issuances of 15-year, 30-year, and 40-year government securities (G-Secs).
• The RBI removed restrictions for foreign portfolio investors (FPIs) under the General Route regarding short-term investments, investment concentration, and individual security exposure.
• The government removed taxes on foreign investors purchasing specified government securities to enhance post-tax returns.
• Investment limits for equity instruments traded on Indian stock exchanges were increased for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and all individual Persons Resident Outside India (PROIs).
• A concessional forex swap facility for External Commercial Borrowings (ECBs) raised by public sector undertakings (PSUs) is available until September 30, 2026.
• The RBI will bear the full hedging cost for fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits with maturities between three and five years raised by authorised dealer (AD) banks until September 30, 2026.
• The timeline for the realisation of export proceeds has been restored to nine months.