- RBI set FPI investment limit in government securities at Rs 4.62 trillion for H1 FY27
- FPI cap for State Development Loans fixed at Rs 1.53 trillion for April-September 2026
- For H2 FY27, FPI limit in government securities increased to Rs 4.77 trillion
Reserve Bank of India on Friday announced the investment limits for Foreign Portfolio Investors (FPIs) in government securities and state development loans (SDLs) for fiscal year 2027, providing overseas investors with a larger investment window in India's debt market.
According to the central bank's notification, FPIs will be permitted to invest up to Rs 4.62 trillion in Government Securities (G-Secs) during the first half of FY27, covering the April-September 2026 period.
For State Development Loans, which are bonds issued by state governments, the investment limit for foreign investors has been fixed at Rs 1.53 trillion for the same period.
The RBI has also outlined higher limits for the second half of the financial year. For the October 2026-March 2027 period, the FPI investment cap in government securities has been increased to Rs 4.77 trillion.
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Similarly, the investment ceiling for state government bonds has been raised to Rs 1.64 trillion during the second half of FY27.
The revised limits are part of the RBI's framework for managing foreign participation in the domestic debt market while ensuring financial stability and orderly capital flows. Government securities and SDLs remain key avenues for foreign investors seeking exposure to India's fixed-income market.
Government securities are issued by the Centre to finance fiscal requirements and are considered among the safest rupee-denominated investment instruments. State Development Loans serve a similar purpose for state governments, enabling them to fund infrastructure projects and other developmental expenditures.
The higher limits for the second half of the year are expected to provide additional room for foreign investment flows into the debt market, particularly as global investors continue to evaluate India's relatively strong economic growth outlook and stable macroeconomic fundamentals.
The RBI periodically reviews and notifies FPI investment limits across various debt categories to balance the objectives of attracting long-term foreign capital and maintaining stability in domestic financial markets.
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