No Change In FPI Investment Limits For G-Secs In FY27, Says RBI

The Reserve Bank of India (RBI) has maintained the investment ceiling for foreign portfolio investors (FPIs) in government securities at 6% of outstanding stock for FY27.

The central bank also kept the limit of other debt instruments within the general route, indicating a stable regulatory strategy towards foreign investment in the Indian debt markets.

What Are The Key Limits Across Debt Segments?

The RBI confirmed that investment limits remain unchanged across categories:

• Government securities (G-Secs): 6%

• State government securities (SGSs): 2%

• Corporate bonds: 15%

Also, the allocation of incremental changes in the G-Sec limit, in absolute terms, between the two subcategories, General and Long-term, has been kept at 50:50 for 2026–27.

The central bank has also set an additional investment capacity of ₹3.30 lakh crore for FY27.

Further, the notional limit for credit default swaps sold by FPIs has been capped at 5% of the outstanding corporate bond stock.

What Changes In Investment Routes?

The RBI clarified that investments in specified securities will continue under the Fully Accessible Route (FAR).

It further declared that investments made under the Voluntary Retention Route (VRR), effective from 1 April 2026, are now aligned with the limits applicable under the general route.

Additionally, any increase in limits for state government securities will be allocated entirely to the general category.

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What Does This Mean For Investors?

To the investors, the unchanged limits portray stability and continuity in the debt market structure of India.

The predictability of the steady caps can be beneficial to the foreign investor, and the extra investment headroom would ensure further participation. The investors ought to observe the flows of capital and interest rate movements within the next period.

Sources:

The Economic Times

Money Control