RBI Revises Regulatory Framework for Foreign Portfolio Investments in Government Securities

RBI/2026-27/97
A.P. (DIR Series) Circular No. 11

June 05, 2026

To,
All Authorised Persons

Madam/Sir,

Dear Sir,

Investments by Foreign Portfolio Investors in Government Securities – Amendments to the regulatory framework

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; the Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025 dated January 07, 2025 [hereinafter, ‘Master Direction’]; and A.P. (DIR Series) Circular No. 05 dated April 06, 2026.

2. At present, investments by Foreign Portfolio Investors (FPIs) in Government Securities through the General Route are subject to (i) short-term investment limit, (ii) security-wise limit, and (iii) concentration limit. On a review, and with a view to providing greater ease of investment to FPIs, it has been decided to withdraw the requirement for FPIs to comply with the above three limits, for their investments in Government securities under the General Route.

3. It has also been decided to merge the sub-categories of investment limits, viz., 'general' and 'long-term' into a single limit for investment in Central Government Securities and State Government Securities (SGSs), respectively. The limits notified for investment in Central Government securities and SGSs for the financial year 2026-27 vide A.P. (DIR Series) Circular No. 05 dated April 6, 2026, shall accordingly be modified as under:

4. In addition, it has been decided to additionally designate the following instruments as ‘specified securities’ under the Fully Accessible Route (FAR):

a) Government Securities: All new issuances in 15-year, 30-year, and 40-year tenors.

b) Sovereign Green Bonds: All new issuances in 5-year, 7-year, 10-year, 15-year, 30-year, and 40-year tenors.