RBI Opens Long-Term Government Bonds To Foreign Investors, Announces Additional Inflow Measures

The Reserve Bank of India (RBI) on Friday widened foreign investor access to long-dated government securities by bringing all new 15-year, 30-year and 40-year sovereign bond issuances under the Fully Accessible Route (FAR), a move aimed at attracting overseas capital into India’s debt market amid pressure on the rupee and heightened global uncertainty.

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The decision expands the pool of government securities available to foreign investors without investment limits. Until now, FAR-eligible securities were largely concentrated in shorter and medium-term maturities. The newly included long-tenor bonds are also constituents of major global bond indices, potentially increasing their appeal among international investors.

FAR Expansion Targets Foreign Debt Flows

The RBI said all fresh issuances of 15-year, 30-year and 40-year government securities will be designated as specified securities under the FAR framework. The move is expected to broaden participation in India’s sovereign debt market and support demand for longer-duration bonds.

The central bank also removed restrictions related to short-term investments, concentration limits and individual security exposure applicable to foreign investors investing through the general route.
The measures come at a time when policymakers are seeking to strengthen capital inflows as elevated crude oil prices and foreign portfolio outflows have weighed on the rupee.

Additional Measures Announced

Alongside the bond-market reforms, RBI Governor Sanjay Malhotra announced several steps aimed at improving foreign currency inflows.

Investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed equity instruments without SEBI registration have been increased. The facility has also been extended to all individual

Persons Resident Outside India

The RBI further introduced a concessional foreign exchange swap facility for external commercial borrowings raised by state-owned companies until September 30. A similar facility will be available for banks mobilising three- to five-year Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, with the central bank bearing the full hedging cost during the period.

Support For External Stability

The central bank also restored the timeline for realisation and repatriation of export proceeds to nine months.
Malhotra said the latest measures, together with tax-related relief announced by the government for certain foreign investors, are expected to strengthen foreign participation in government borrowing programmes and improve capital inflows.

The announcements form part of a broader effort by policymakers to reinforce India’s external position, diversify funding sources and support financial market stability amid ongoing global geopolitical tensions and volatility in international capital flows.