New Delhi

The Reserve Bank of India (RBI) on Friday introduced a set of policy measures aimed at strengthening capital inflows, improving external sector resilience, and making Indian financial markets more attractive to global investors.

Presenting the Monetary Policy Statement, RBI Governor Sanjay Malhotra outlined several initiatives designed to encourage overseas funding, facilitate foreign investments, and support the country's balance of payments amid an uncertain global economic environment.

One of the key announcements was a temporary concessional foreign exchange swap facility for Public Sector Undertakings (PSUs) raising funds through External Commercial Borrowings (ECBs). The facility will remain available until September 30, 2026, and is intended to make overseas borrowing more cost-effective for state-owned enterprises.

ECBs refer to loans obtained by eligible Indian entities from foreign lenders in either foreign currencies or Indian rupees. These borrowings are commonly used to finance infrastructure projects, business expansion, and refinancing requirements.

The central bank also unveiled a similar incentive for authorised dealer (AD) banks to mobilise fresh Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits with maturities ranging from three to five years. Under the scheme, the RBI will bear the entire hedging cost until September 30, 2026, helping banks attract foreign currency deposits from overseas investors and depositors.

In another move aimed at facilitating trade, the RBI proposed restoring the period allowed for the realisation of export proceeds to nine months, offering exporters greater operational flexibility.

Governor Malhotra said these measures are intended to shield India's external finances from global uncertainties, including trade tensions, commodity price volatility, and evolving geopolitical developments.

To boost foreign participation in the debt market, the RBI expanded the list of government securities available under the Fully Accessible Route (FAR). Going forward, all newly issued government bonds with maturities of 15, 30, and 40 years will automatically qualify under the route, making them accessible to foreign investors without investment limits.

The central bank also announced the removal of several restrictions applicable to Foreign Portfolio Investors (FPIs) investing under the General Route. Caps relating to short-term investments, concentration limits, and exposure to individual securities will be withdrawn, providing greater flexibility to overseas investors.

According to the RBI, these changes, combined with recent tax-related incentives announced by the government, are expected to enhance foreign participation in India's sovereign debt market and support government borrowing programmes.

The regulator further eased investment norms for overseas individuals in the equity market. Investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in listed equity instruments have been increased. In addition, the same investment facility will now be extended to all individual Persons Resident Outside India (PROIs), bringing them on par with NRIs and OCIs.

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Malhotra expressed confidence that the measures would help strengthen capital inflows and improve external sector stability. He added that the RBI would continue to monitor global developments closely and make appropriate policy adjustments to support exports, encourage investments, and maintain macroeconomic stability.