Context:
The Securities and Exchange Board of India (SEBI) announced that its revised regulations for foreign investors investing exclusively in Indian government securities will come into effect from 8 February 2026. The rules were initially approved at SEBI’s board meeting in June 2025.
Key Highlights:
- Applicability:
- Applies to Foreign Portfolio Investors (FPIs) who invest only in Indian government bonds under the fully accessible route.
- Relaxed Disclosure Requirements:
- FPIs under this route need not disclose their investor group details, unlike regular FPIs investing in equity or other debt instruments.
- Exemptions also cover certain reporting requirements applicable to regular FPIs.
About Fully Accessible Route (FAR)
- Introduced by the RBI in April 2020.
- Permits non-resident investors to invest in specified categories of government securities without restrictions.
- Aimed at attracting global capital flows into India’s bond market.
Role of FPIs:
- FPIs are foreign entities or individuals allowed to invest in Indian securities (equities, corporate debt, or government bonds).
- They bring foreign capital, enhance liquidity, and contribute to market depth.
- Under the FAR, FPIs can invest in government securities with fewer compliance burdens, promoting ease of access and long-term investments.
