The Reserve Bank of India announced a significant expansion of the Fully Accessible Route for Foreign Portfolio Investors on 5 June 2026 during Governor Sanjay Malhotra second bi monthly monetary policy statement of FY 2026 27. Under the new framework all new issuances of Government Securities with 15 year 30 year and 40 year tenures will be added to the universe of specified securities under FAR without any investment limits whatsoever. The Fully Accessible Route was originally introduced in March 2020 to allow non resident investors to invest in select categories of central government bonds without any quantitative ceiling.

This monetary policy measure complements an equally important fiscal decision by the Union Government to fully exempt Foreign Portfolio Investors from income tax on interest income and capital gains arising from investments in Government Securities with effect from 1 April 2026. The combined regulatory and tax architecture is designed to attract long term patient foreign institutional capital at a time when global fund managers are rebalancing portfolios away from riskier assets and the rupee is trading around 97 per US dollar amid the West Asia energy shock.

Markets responded swiftly with FPIs net buying about 3000 crore rupees worth of FAR securities on Friday 6 June 2026 following the announcement. Earlier in calendar year 2026 FPIs had net purchased 5262 crore rupees of FAR government securities in April and 5512 crore rupees in May with 3395 crore rupees of inflows recorded up to 5 June making the cumulative inflows under FAR robust. The expansion is expected to deepen the domestic bond market enhance liquidity at the ultra long end of the yield curve and lower government borrowing costs.