RBI expands foreign access to sovereign bonds and equity

The Reserve Bank of India announced a comprehensive set of measures on Friday aimed at attracting foreign capital and strengthening the country's external financial position. The policy changes, unveiled by Governor Sanjay Malhotra, span government securities, equity markets, and foreign currency funding.

A central move involves expanding access to India's sovereign debt market. The central bank will include all new issuances of 15-year, 30-year, and 40-year government securities under the Fully Accessible Route, which allows foreign investors to purchase these bonds without facing investment caps. Simultaneously, the RBI removed several restrictions for Foreign Portfolio Investors under the General Route, eliminating limits on short-term investments, investment concentration, and exposure to individual securities. Officials stated these steps, combined with tax benefits announced by the government for investments in specified government securities, are intended to attract foreign capital for government borrowing.

For equity markets, the RBI increased investment limits for Non-Resident Indians and Overseas Citizens of India. These investors can now hold up to 10 percent...