FII investment cap raised by $10 b in debt markets

• GOI raised the cap on investment by foreign institutional investors (FIIs) in the country's debt and bond markets by $10 billion to $30 billion.
• FIIs will now be allowed to invest up to $5 billion more in both government bonds and corporate papers after they reach the existing cap of $5 billion and $15 billion in the two instruments, respectively.
  
• Besides, FIIs are permitted to invest $5 billion in bonds of infrastructure companies and government bonds with a residual maturity of over five years.
• The government is of the view that enhancement of the FII investment cap would provide avenues for increased investments in debt securities, help investment in the infrastructure sector and the development of government securities and corporate bond markets in the country.

Investment destination

Having emerged as one of the top investment destinations in the course of the fast-paced recovery from the impact of the global financial crisis, India has already attracted over $17 billion in investment in various bonds and securities. A hike in the ceiling was, therefore, deemed necessary as FIIs are already close to touching the existing cap of $20 billion in investment. Commenting on the relaxation in the investment limit.