Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday, 5 June announced a package of measures to widen foreign capital inflows into Indian markets, including raising equity investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in stock-market instruments that do not require SEBI registration. The announcements were made during Malhotra's address following the Monetary Policy Committee (MPC) meeting in Mumbai.

Expanded Equity Access for NRIs, OCIs and PROIs

The RBI has increased the ceiling on equity investments by NRIs and OCIs in listed instruments traded without SEBI registration. Critically, the same facility is now being extended to all individual Persons Resident Outside India (PROIs), placing them on par with NRIs and OCIs — a move that broadens the pool of eligible overseas retail investors significantly.

Forex Swap and FCNR(B) Incentives for Capital Inflows

To incentivise External Commercial Borrowings (ECBs) by Public Sector Undertakings (PSUs), a concessional forex swap facility will be available until 30 September 2026. Separately, Authorised Dealer (AD) banks will receive a facility covering the full hedging cost for raising fresh 3–5-year FCNR(B) deposits, also valid until 30 September 2026. Governor Malhotra outlined both measures as part of a coordinated push to deepen the country's external financing buffers.

G-Sec Universe Widened Under FAR; FPI Limits Relaxed

Under the Fully Accessible Route (FAR) for government securities, the RBI is expanding the universe of 'specified securities' by including all new issuances of 15-year, 30-year, and 40-year tenor G-secs. In a further liberalisation, limits on short-term investment, concentration, and individual securities for Foreign Portfolio Investor (FPI) investment under the General Route are being removed entirely. 'These measures along with the tax benefits provided by the government this morning should help attract foreign capital for government borrowing,' Malhotra said.

Export Proceeds Realisation Window Restored

The RBI also proposed restoring the time allowed for realisation of export proceeds to nine months — a measure aimed at easing the operational burden on Indian exporters navigating uncertain global trade conditions. Malhotra noted that the overall package is designed to 'strengthen our balance of payments' while continuing to promote exports and incentivise capital inflows.

Exchange Rate Policy Stays Market-Driven

On the rupee, the Governor reaffirmed that India's exchange rate policy remains unchanged. 'We do not target any specific level or band; instead, we allow the exchange rate to be determined by market forces,' he stated. However, he cautioned that the RBI would intervene to 'curb excessive volatility and prevent disorderly market movements' driven by speculative pressures, particularly during periods of heightened global uncertainty. This comes amid ongoing turbulence in emerging-market currencies linked to US monetary policy signals and geopolitical risk.

Taken together, the measures mark one of the more comprehensive capital-account liberalisation packages announced at a single MPC press conference in recent memory, and are expected to have an immediate bearing on FPI flows into Indian debt and equity markets.