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Investment by Foreign Portfolio Investors (FPI): Investment limits

A.P. (DIR Series) Circular No. 14

March 31, 2021


All Authorized Persons

Madam / Sir

Investment by Foreign Portfolio Investors (FPI): Investment limits

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 1 to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide Notification No. FEMA.396/2019-RB dated October 17, 2019, as amended from time to time and the relevant Directions issued thereunder. A reference is also invited to A.P. (DIR Series) Circular No. 30 dated April 15, 2020 on the captioned subject.

2. Investment Limits for FY 2021-22

a. The limits for FPI investment in Corporate bonds shall remain unchanged at 15% of outstanding stock of securities for FY 2021-22. Accordingly, the revised limits for FPI investment in corporate bonds, after rounding off, shall be as under (Table - 1)

Table - 1: Limits for FPI investment in Corporate bonds for FY 2021-22
(₹ Crore)
Current FPI limit 5,41,488
Revised limit for HY Apr 2021-Sep 2021 5,74,263
Revised limit for HY Oct 2021-Mar 2022 6,07,039

b. The revised limits for FPI investment in Central Government securities (G-secs) and State Development Loans (SDLs) for FY 2021-22 will be advised separately. Till such announcement, the current limits (as in Table - 2), shall continue to be applicable.

Table - 2: Limits for FPI investments in G-Sec and SDL
(₹ Crore)
  G-Sec General G-Sec Long Term SDL General SDL Long Term
FPI investment limits 2,34,531 1,03,531 67,630 7,100

3. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

4. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.

Yours faithfully

(Dimple Bhandia)
Chief General Manager