The Government has increased the current limit of Foreign Institutional Investors (Fll) investment in Government Securities by US $ 5 billion raising the cap to US $ 10 billion and the incremental limit of US $ 5 billion be invested in securities with residual maturity of over five years. The current limit of Fll investment in corporate bonds has also been increased by US $ 5 billion raising the cap to US $ 20 billion and the incremental limit of US $ 5 billion be invested in corporate bonds with residual maturity of over five years issued by companies in infrastructure sector.
The enhancement of the Fll investment cap would provide avenues for increased Fll investments in debt securities, help investment in infrastructure sector and the development of Government securities and corporate bond markets in the country.
The policy has been reviewed in the context of lndia’s evolving macroeconomic situation, its increasing attractiveness as an investment destination and need for additional financial resources for lndia’s infrastructure sector while balancing its monetary policy.
Currently, Flls can invest up to USD 5 billion and USD 15 billion in Government securities and corporate bonds respectively.