The Reserve Bank of India (RBI) has introduced a separate channel, namely ‘Fully Accessible Route’ (FAR), to enable non-residents to invest in specified government bonds with effect from April 1.
The move follows the Union Budget announcement that certain specified categories of government bonds would be opened fully for non-resident investors without any restrictions.
“Eligible investors can invest in specified government securities without being subject to any investment ceilings. This scheme shall operate along with the two existing routes, viz., the Medium Term Framework (MTF) and the Voluntary Retention Route (VRR),” the RBI said.
“This will substantially ease access of non-residents to Indian government securities markets and facilitate inclusion in global bond indices. This would facilitate inflow of stable foreign investment in government bonds,” the Finance Ministry tweeted.