Foreign portfolio investment in Indian debt markets has been expanded within calibrated macro-prudential norms. Limits under the Medium-Term Framework for investment by Foreign Portfolio Investors (FPIs) have been gradually increased and procedures rationalized. A Voluntary Retention Route (VRR) has been introduced, which provides relaxations from macroprudential controls but subject to a minimum retention period.
In a major step towards greater internationalisation, the Fully Accessible Route (FAR) was introduced under which non-residents can invest in specified government securities without any restriction. Capital account convertibility will continue to be approached as a process rather than an event, taking cognizance of prevalent macroeconomic conditions. A long term vision with short and medium term goals is the way ahead. 16.