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Informist, Thursday, May 29, 2025

--RBI: FPI investment in debt mkt up but utilisation below investment limits 

--RBI: Debt mkt saw FPI inflows of $17.4 bln FY25 on bond index inclusion 

MUMBAI – India's debt segment saw steady inflows from foreign portfolio investors during the financial year ended March. A major part of the inflows was supported by the inclusion of Indian bonds in JP Morgan's Emerging Markets global bond index, which led to FPI inflows worth $17.4 billion in FY25, or nearly INR 1.5 trillion, according to the Reserve Bank of India's annual report. However, the utilisation remains below the available investment limit, the report noted. 

As of March-end, 15.7% of the limits in central government securities were utilised, against 18.5% at the end of March 2024. Of the total value of specified central gilts opened for non-resident investors under the fully accessible route, 7.1% were held by FPIs as at the end of March, up from 4.5% from a year ago, the RBI report showed. 

For FY25, the investment limits were at 6% of outstanding stocks for government securities, 2% for state government securities and 15% for corporate bonds. The central bank on May 8 relaxed rules on FPI limits in corporate bonds by removing the short-term investment and concentration limits for investment through the general route. 

FPI investments in corporate bonds increased to INR 1.21 trillion by the end of March, rising 11.4% from end of FY24. However, the utilisation of approved limits declined to 15.8% by the end of FY25 from 16.2% a year ago, the RBI report showed, citing data from Securities and Exchange Board of India and National Securities Depository Ltd. This was "as the absolute limits for FPI investments in corporate bonds increased", the report said. End

US$1 = INR 85.45

Reported by Srijita Bose

Edited by Avishek Dutta

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