RBI guidelines for Limits for investment in debt and sale of Credit Default Swaps by Foreign Portfolio Investors (FPIs)
The Reserve Bank of India (RBI) has issued guidelines on the limits for investment in debt and the sale of Credit Default Swaps (CDS) by Foreign Portfolio Investors (FPIs). These rules define how much foreign investors can invest in Indian debt instruments such as government and corporate bonds, and under what conditions they can use CDS, which act as a form of insurance against default on loans or bonds.
The limits are set to ensure that foreign investment remains within a controlled range, helping maintain financial stability and preventing excessive dependence on external funds. At the same time, the regulations on CDS usage aim to manage risk and avoid misuse of such financial instruments in the market. Overall, these guidelines help balance foreign participation in India’s financial markets while safeguarding the economy from sudden volatility.
RBI guidelines for Limits for investment in debt and sale of Credit Default Swaps by Foreign Portfolio Investors (FPIs)
- The limits for FPI investment in Government Securities (G-Secs), State Government Securities (SGSs) and corporate bonds shall remain unchanged at 6 per cent, 2 per cent and 15 per cent respectively, of the outstanding stocks of securities for 2026-27 for the General Route.
- The allocation of incremental changes in the G-Sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – has been retained at 50:50 for 2026-27.
- The entire increase in limits for SGSs (in absolute terms) has been added to the ‘General’ sub-category of SGSs.
- As hitherto, all investments by eligible investors in the ‘specified securities’ shall be reckoned under the Fully Accessible Route (FAR).
- With effect from April 01, 2026, all existing and future investments under the Voluntary Retention Route shall be subject to the investment limits stipulated for FPI investments under the General Route.
The revised limits (in absolute terms) for the different categories, are as below:
| all figures in ₹ Crore | ||||||
| G-Sec General | G-Sec Long Term | SGS General | SGS Long Term | Corporate Bonds | Total Debt | |
| Current FPI limits | 2,89,488 | 1,58,488 | 1,34,744 | 7,100 | 8,80,835 | 14,70,655 |
| Revised limit for the HY Apr 2026-Sept 2027 | 2,96,745 | 1,65,745 | 1,45,943 | 7,100 | 9,36,113 | 15,51,646 |
| Revised limit for the HY Oct 2026-Mar 2027 | 3,04,003 | 1,73,003 | 1,57,142 | 7,100 | 9,91,392 | 16,32,640 |
