Noida, June 5 (APAC Media): The government of India on Friday announced measures to liberalise foreign portfolio investment (FPI) norms in equities and government securities.
The initiatives are intended to enhance ease of investment for persons resident outside India and foreign portfolio investors while broadening the country’s global investor base.
Under amendments to the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, individual Persons Resident Outside India (PROIs) will now be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS), according to regulatory changes notified by the Finance Ministry.
The investment limit for an individual PROI under the scheme has been increased to 10% in any company from the existing 5%, while the aggregate investment limit for all individual PROIs has been raised to 24% from the current 10%.
RBI Keeps Repo Rate Unchanged at 5.25% Amid West Asia Conflict, Inflation Risks
“The reforms are expected to broaden the investor base, deepen liquidity in the government securities market, and strengthen India’s position as a leading global investment destination,” the finance ministry said in a statement.
In a parallel reform, the government has expanded the Fully Accessible Route for Government Securities to include new issuances in 15-year, 30-year and 40-year tenors as well as Sovereign Green Bonds in eligible maturities.
The reforms are part of broader efforts to align Indian capital markets with global best practices and strengthen long-term financial stability, the Finance Ministry said in a statement on Friday.
It added that implementation will begin with immediate effect.
The central government has also eased norms governing foreign portfolio investment (FPI) in government securities under the general route, removing several restrictions including short-term investment limits, concentration limits, and security-wise caps, while retaining the overall ceiling of 6% for central government securities and 2% for state government securities.
It has also merged the earlier sub-limits for general and long-term investment categories into a single unified limit for government securities and state government securities.
In addition, to make Indian debt markets more attractive, the government has exempted foreign portfolio investors from income tax on interest and capital gains arising from investments in government securities, effective April 1, 2026.
Officials said the measures are aimed at simplifying market access, reducing operational complexities, and attracting long-term foreign capital, including pension funds, insurance companies, and sovereign wealth funds.
The exemption will also apply to the Bank for International Settlements, aligning tax treatment with global standards.
–ENDS–
Disclaimer: Views expressed are those of experts and do not reflect APAC Media. This is for informational purposes only, not financial advice. We are not responsible for investment decisions. Please consult a qualified financial advisor before investing.
Also Read:
