Reserve Bank of India (RBI) has announced regulatory relaxations for Foreign Portfolio Investors (FPIs) investing in corporate debt securities through the General Route. As per the updated guidelines, the existing requirements for compliance with the short-term investment limit and the concentration limit—stipulated in paragraphs 4.4(iii) and 4.4(v) of the Master Direction on Non-resident Investment in Debt Instruments (2025)—have been withdrawn. These changes are aimed at facilitating greater investment ease for FPIs and take effect immediately. Authorised Dealer Category-I banks have been directed to inform their clients of the new provisions. The relaxations have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and are applicable without affecting any separate approvals required under other laws. An updated version of the Master Direction reflecting these changes has also been released.
Reserve Bank of India
India’s Central Bank
Notifications
Investments by Foreign Portfolio Investors in Corporate Debt Securities through the General Route – Relaxations
RBI/2025-26/35
FMRD.FMD.No.01/14.01.006/2025-26 Dated: May 08, 2025
To,
All Authorised Persons
Madam/Sir,
Investments by Foreign Portfolio Investors in Corporate Debt Securities through the General Route – Relaxations
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, as amended from time to time; and the Master Direction – Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 dated January 07, 2025 [hereinafter, ‘Master Direction’].
2. At present, investments by Foreign Portfolio Investors (FPIs) in corporate debt securities through the General Route are subject to the short-term investment limit and the concentration limit as prescribed in paragraphs 4.4(iii) and 4.4(v) of the Master Direction, respectively. On a review, and with a view to providing greater ease of investment to FPIs, it has been decided to withdraw the requirement for investments by FPIs in corporate debt securities to comply with the short-term investment limit and the concentration limit.
3. The directions in this circular are issued with immediate effect.
4. The updated Master Direction is enclosed herewith.
5. AD Category-I banks may bring the contents of these directions to the notice of their constituents.
6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) without prejudice to permissions/approval, if any, required under any other law.
Yours faithfully
(Dimple Bhandia)
Chief General Manager
