INDIA: Changes to India foreign investment limits in government debt

Thursday January 30 2014

The Securities and Exchange Board of India has announced a change to India foreign investment limits in government debt.

Under current rules, there is a foreign ownership ceiling of USD 30 billion in government debt – 5bn of which is reserved for FIIs in the category of Sovereign Wealth Funds, Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks.

The Government of India has now decided to enhance this sub-limit from USD 5 billion to USD 10 billion within the overall Government debt limit of USD 30 billion.

The overall USD 30 billion cap in Indian government debt is now distributed as follows:

• FIIs and QFIs – USB 20bn (with the proviso that eligible investors may invest in Treasury Bills only up to US$ 5.5 billion within the limit of USD 20 billion)
• FIIs registered with SEBI under the categories of Sovereign Wealth Funds, Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks

Click on the above link for the circular.