The Reserve Bank of India (RBI) Governor, Sanjay Malhotra, revealed that investment limits for NRIs and OCIs in stock market equity instruments without SEBI registration are being raised. This extension will now apply to all individual Persons Resident Outside India (PROIs) on par with NRIs and OCIs, as stated after the Monetary Policy Committee (MPC) meeting. Additionally, a concessional forex swap facility will be available until September 30, 2026, to encourage ECBs by PSUs.
To attract foreign capital, the RBI plans to expand the ‘specified securities’ universe for government securities under the Fully Accessible Route (FAR) by including all new issuances of 15-, 30-, and 40-year tenor G-secs. Furthermore, limits on short-term investment, concentration, and individual securities for FPI investments under the General Route are being eliminated. These initiatives, combined with government tax benefits, aim to draw foreign capital for government borrowing.
Moreover, the RBI intends to restore the time for export proceeds realization to nine months. The exchange rate policy of India remains unaltered, with no specific level or band targeted; instead, market forces determine the exchange rate. While market-driven adjustments are allowed, the RBI will intervene to prevent excessive volatility and disorderly market movements caused by speculative pressures.
