RBI/2024-25/126
FMRD.FMD.No.10/14.01.006/2024-25
January 07, 2025
(
Updated as on June 05, 2026
)
(
Updated as on April 10, 2026
)
(
Updated as on February 06, 2026
)
(
Updated as on October 03, 2025
)
(
Updated as on August 12, 2025
)
(
Updated as on May 08, 2025
)
To,
All Authorised Persons
Madam/Sir,
Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025
In exercise of the powers conferred under section 6, read with section 47 of the Foreign Exchange Management Act, 1999, the Reserve Bank has issued the following regulations to regulate non-resident investment in debt instruments in India:
Foreign Exchange Management (Permissible Capital Accounts Transactions) Regulations, 2000 notified vide
Notification No. FEMA 1/2000-RB dated May 03, 2000
, as amended from time to time;
Foreign Exchange Management (Borrowing and Lending) Regulations, 2018 notified vide
Notification No. FEMA 3(R)/2018-RB dated December 17, 2018
, as amended from time to time;
Foreign Exchange Management (Deposit) Regulations, 2016 notified, vide
Notification No. FEMA. 5(R)/2016-RB dated April 01, 2016
, as amended from time to time
v
; and
Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide
Notification No. FEMA. 396/2019-RB dated October 17, 2019
, as amended from time to time.
2. The Reserve Bank has also been issuing necessary directions in the form of A.P. (DIR Series) Circulars under the aforesaid regulations as also directions under Section 45W of the Reserve Bank of India Act, 1934, from time to time relating to non-resident investment in debt instruments in India. Such Directions issued through various circulars, as set out in
Annex – 1
to these Directions, have been consolidated and issued in this
Master Direction
.
3. AD Category-I banks may bring the contents of the Master Direction to the notice of their constituents.
4. The Master Direction has been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and Section 45W of the Reserve Bank of India Act, 1934 and are without prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
FINANCIAL MARKETS REGULATION DEPARTMENT
Notification No. FMRD.FMD.11/14.01.006/2024-25 dated January 07, 2025
Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025
The Reserve Bank of India (hereinafter called the Reserve Bank) hereby issues the following Directions in exercise of the powers conferred under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 and under section 45W of the Reserve Bank of India (RBI) Act, 1934
- Short title, commencement, and applicability of the Directions
- (i) These Directions shall be called the Master Direction - Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025.
- (ii) These Directions shall be applicable with immediate effect.
- (iii) These Directions shall be applicable to all transactions by eligible non-residents in debt instruments.
Part – 1
2. Definitions
- (i) In these Directions, unless the context otherwise requires:
- (a) “Corporate debt securities” shall include all instruments specified in sub-paragraph – A of paragraph 1 of Schedule 1 to Foreign Exchange Management (Debt Instruments) Regulations, 2019, other than Government securities and municipal bonds as specified at clause (a) and clause (k) of that sub-paragraph, as amended from time to time.
- (b) “Committed Portfolio Size” (CPS) for a Foreign Portfolio Investor (FPI) shall mean the amount allotted to that FPI under the Voluntary Retention Route.
- (c) “Default bonds” shall mean Non-Convertible Debentures/bonds, which are under default, either fully or partly, in the repayment of principal on maturity or principal instalment in the case of amortising bond.
- (d) “Electronic Trading Platform (ETP)” shall have the same meaning as assigned to it in Section 2(a)(ii) of Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2025 dated June 16, 2025, as modified from time to time;
- (e) “Foreign Portfolio Investor (FPI)” shall mean a person registered in accordance with the provisions of the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, as amended from time to time.
- (f) “Government security” shall mean a security as defined under section 2(f) of the Government Securities Act, 2006.
- (g) [***] xxvi
- (h) “Minor violations” shall mean violations that are, in the considered opinion of the custodians, unintentional, temporary in nature or have occurred on account of reasons beyond the control of FPIs, and in all cases are corrected on detection.
- (i) “Multilateral Financial Institution”, for the purpose of these Directions, shall mean an FPI which is a Multilateral Financial Institution in which Government of India is a member.
- (j) “Non-resident” shall mean a person resident outside India as defined under section 2(w) of FEMA, 1999.
- (ja) “Non-Resident Indian (NRI)” shall mean an individual resident outside India who is a citizen of India. xxi
- (k) “Over-the-Counter (OTC) Markets” shall mean markets where transactions are undertaken in any manner other than on exchanges and shall include those executed on electronic trading platforms (ETPs).
- (l) “Person resident outside India” shall have the same meaning as assigned to it under section 2(w) of FEMA, 1999.
- (m) “Real Estate Business” shall have the same meaning as assigned to it under the note (6) to item no. 10.2 in the Table in Schedule – I to Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
- (n) “Recognised stock exchange” shall have the same meaning as assigned to it in section 2(f) of the Securities Contracts (Regulations) Act, 1956.
- (o) “Related FPIs” shall mean ‘investor group’ as defined in Regulation 22(3) of Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019.
- (p) “Repo” shall have the same meaning as assigned to it in Section 45U (c) of RBI Act, 1934; and for the purpose of these Directions excludes repo conducted under the Reserve Bank’s Liquidity Adjustment Facility.
- (q) “Retention Period” shall mean the time period that an FPI voluntarily commits for retaining the CPS in India under the Voluntary Retention Route.
- (r) “Reverse Repo” shall have the same meaning as assigned to it in Section 45U (d) of RBI Act, 1934; and for the purpose of these Directions excludes reverse repo conducted under the Reserve Bank’s Liquidity Adjustment Facility.
- (s) [***] xxvii
- (t) “Specified securities” shall mean Central Government securities as periodically notified by the Reserve Bank for investment under the Fully Accessible Route.
- (ii) Words and expressions used but not defined in these Directions, shall have the meaning assigned to them in FEMA, 1999, and the RBI Act, 1934.
- Investment Channels
- (i) The following shall be the channels for investment in debt instruments by non-residents:
- General Route 1 for investment in Government securities and corporate debt securities by FPIs subject to specified investment limits and macro-prudential limits;
- Voluntary Retention Route 2 for investments in Government securities and corporate debt securities, free of certain macro-prudential limits applicable to FPI investments in debt markets under the General Route, by FPIs that commit to remain invested for a stipulated retention period;
- Fully Accessible Route 3 for investments by non-residents in certain specified categories of Central Government securities (‘specified securities’) without any restriction;
- Scheme for Trading and Settlement of Sovereign Green Bonds issued by the Central Government by eligible foreign investors in the International Financial Services Centre (IFSC); and
- Special Rupee Vostro Account Route for investment in eligible instruments x by Persons Resident Outside India from the rupee surplus balance maintained in Special Rupee Vostro Accounts. vi
- (ii) Investments by Non-Resident Indians in debt instruments shall be in terms of instructions stipulated in Part – 5(B) of these Directions. xxii
Part – 2
4. General Route
4.1. Eligible non-residents:
Foreign Portfolio Investors
