Foreign Portfolio Investors Allowed to Invest in Municipal Bonds Within State Development Loans Limits Under FEMA 1999.

The circular addresses the investment by Foreign Portfolio Investors (FPI) in debt instruments in India, specifically permitting FPIs to invest in municipal bonds. These investments will be included within the existing limits set for FPI investment in State Development Loans (SDLs). All other conditions for FPI investments in the debt market remain unchanged. Authorized Dealer Category-I banks are instructed to inform their clients about these changes. Amendments to the relevant Foreign Exchange Management Regulations have been notified by the government, and the directions are issued under the Foreign Exchange Management Act, 1999.