RBI Keeps FPI Debt Limits Unchanged, Increases Investment Ceiling for FY27

The Reserve Bank of India (RBI) has increased the overall limit for Foreign Portfolio Investor (FPI) investment in debt for FY27, as per ANI reports.  

The ceiling will rise from ₹14.70 lakh crore to ₹15.52 lakh crore for the first half of the year, and further to ₹16.33 lakh crore in the second half. 

The revision shows an increase in the size of the domestic bond market, allowing a higher stock of foreign investment within the existing framework. 

Limits Across Instruments Unchanged 

The central bank has kept percentage caps unchanged across categories. Investment limits remain at 6% for government securities (G-Secs), 2% for state development loans (SDLs), and 15% for corporate bonds. 

These caps continue to define the proportion of foreign investment allowed in each segment. 

Distribution of Incremental Limits 

Additional limits for G-Secs will continue to be split equally between general and long-term categories. By the second half of FY27, the general category is set to increase to ₹3.04 lakh crore, while the long-term category will reach ₹1.73 lakh crore. 

In the case of SDLs, the full increase has been assigned to the general category, raising it to ₹1.57 lakh crore. The long-term SDL limit remains unchanged at ₹7,100 crore.  

Corporate bond limits are set to increase to ₹9.91 lakh crore. 

Changes to Investment Routes 

From April 1, 2026, the Voluntary Retention Route (VRR) will be merged with the general route. Investments will be counted under a single set of limits. 

At the same time, specified securities will continue to be available under the Fully Accessible Route (FAR), where no investment caps apply for eligible investors. 

Utilisation Levels Remain Low 

Utilisation of limits under the non-FAR route has remained limited, at around 18% as of March 2026. Earlier inflows linked to global bond index inclusion have moderated in recent months. 

Read More: RBI MPC Meeting Decision Tomorrow April 8: What to Expect from RBI? 

Conclusion 

The changes retain existing caps while increasing the overall investment ceiling, aligning the framework with current market size without altering the structure of limits. 

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