FII debt sub-limits tweaked to attract greater flows

Out of overall FII investment limit of $30 bn, $10 bn will now be reserved for long term investors

The investment sub-limit in government debt meant for foreign institutional investors (FII), such as sovereign wealth funds, pension funds, endowment and insurance funds, has been doubled to $10 billion.

Out of the overall FII investment limit of $30 billion, $10 billion will now be reserved for these long term investors. Market regulator Sebi said in a circular that these changes will come into effect immediately.

FII flows in the debt market have been volatile in recent months. While, foreign investors had pulled out a record $8 billion from the Indian debt market in 2013, flows have been healthy in recent weeks.