The Centre on Friday announced a series of reforms aimed at deepening the Government Securities (G-Sec) market, easing investment norms for foreign investors and attracting stable long-term capital inflows into the country.
The Ministry of Finance said the measures are designed to enhance ease of investment for individual Persons Resident Outside India (PROIs) and Foreign Portfolio Investors (FPIs), while strengthening India’s position as a leading global investment destination.
As announced in the Union Budget 2026-27, individual PROIs will now be allowed to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS), a facility earlier available only to NRIs and Overseas Citizens of India (OCIs). The investment limit for an individual PROI has been increased from 5 per cent to 10 per cent in a company, while the aggregate ceiling for all such investors has been raised from 10 per cent to 24 per cent.
To boost participation in Government securities, the government has expanded the Fully Accessible Route (FAR) to include new issuances of 15-year, 30-year and 40-year G-Secs, along with Sovereign Green Bonds. Restrictions relating to short-term investment, concentration and security-wise limits for FPIs under the General Route have also been removed, while overall investment caps remain unchanged.
In a major tax relief measure, the government has exempted FPIs from income tax on interest income and capital gains arising from investments in Government securities with effect from April 1, 2026.
The Finance Ministry said the reforms would simplify market access, deepen the debt market and attract long-term investors such as pension funds, insurance companies and sovereign wealth funds.
