IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 25 Jun 2012 | Removal date: open ended
Still in force

Controls on commercial transactions and investment instruments

On 25 June 2012, the Reserve Bank of India made the following changes for foreign investment in government securities and infrastructure debt:

  • The investment limit for Foreign Instiutional Investors (FIIs) in government securities was increased from USD 15 billion to USD 20 billion.
  • The residual maturity requirement at the time of purchase of the government security has been reduced from 5 years to 3 years.
  • Other long term investors such as Sovereign Wealth Funds (SWFs), Multilateral agencies, endowment funds, insurance funds, pension funds and foreign Central Banks to be registered with Securities and Exchange Board of Indiahave been allowed to invest in these securities.
  • Qualified Foreign Investors (QFIs) are allowed to invest Mutual Fund schemes that hold at least 25% of their assets, in debt or equity, in the infrastructure sector. The limit for such investments is unchanged at USD 3 billion. Earlier, the QFIs could invest in Mutual Fund schemes that held infrastructure debt only.
  • The lock in period for FII investment in infrastrucure funds has been reduced from 3 years to 1 year and the reisdual maturity required at the time of purchases has been reduced from 5 years to 15 months.

 

AFFECTED COUNTRIES

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