RBI Retains FPI Investment Limits in G-Secs | SGSs

RBI/2026-27/07 A.P. (DIR Series) Circular No. 05; Dated: 06.04.2026

The Reserve Bank of India (RBI) has decided to retain the existing limits for Foreign Portfolio Investor (FPI) investments under the General Route for the financial year 2026–27.

1. Unchanged Investment Limits

The limits continue as a percentage of the outstanding stock of securities:

Government Securities (G-Secs) – 6%
State Government Securities (SGSs) – 2%
Corporate Bonds – 15%

2. Allocation Between ‘General’ and ‘Long-term’ Categories

For G-Secs, the allocation of any incremental increase in limits (in absolute terms) between sub-categories remains:

50% to ‘General’ category
50% to ‘Long-term’ category

This ensures balanced participation across investor types.

3. Treatment of SGS Limits

The entire increase in SGS limits (in absolute terms) will be allocated to the ‘General’ sub-category
No allocation has been made to the long-term category for SGSs

4. Fully Accessible Route (FAR)

Investments made by eligible investors in ‘specified securities’ will be:

Counted under the Fully Accessible Route (FAR)
Not subject to the standard FPI limits

5. Voluntary Retention Route (VRR) Alignment

All existing and future investments under the Voluntary Retention Route (VRR) will now be subject to the overall investment limits under the General Route
This change will be effective from 1st April 2026

6. Objective of the Framework

The RBI’s approach aims to:

Maintain stability in debt markets
Ensure controlled foreign participation
Align different investment routes under a harmonised limit structure

7. Conclusion

By retaining limits and refining allocation mechanisms, the RBI ensures a balanced, stable, and transparent framework for FPI investments in debt markets, while aligning various investment routes under a unified regulatory approach.