INDIA: India FDI in Government Securities Rules Likely to be Reformed

Wednesday March 28 2012

It has been reported that the Indian government is likely to make it easier for foreign investors to set up businesses that deal in government securities, which will facilitate entry into the near- Rs 1 lakh crore G-Sec market. It is hoped that the move will expand the market, add to liquidity and help the government to manage its rising borrowings better. The Department of Industrial Policy and Promotion (DIPP) is currently reviewing a new set of rules regarding the opening of more financial services to India foreign direct investors (FDIs).

There is a reported proposal to include primary dealership in the G-Sec market in the list of permissible activities that can be undertaken by non-banking finance companies and permit 100% FDI under the automatic route. The revised FDI policy will be published at the end of April, and the proposal is likely to be included within it.

This information will be updated as more details become available