FPI investment limits revised: operational rules change including maturity requirements, concentration and issue exposure caps.
The circular revises operational rules for FPI debt investment: minimum residual maturities for G secs, SDLs and corporate bonds are relaxed subject to a cap on short term residual maturity exposure; the aggregate FPI cap in any Central Government security is increased; CCIL online monitoring replaces the auction allocation mechanism; concentration limits by FPI sub category are imposed with transitional relaxations for existing excess holdings; corporate bond issue wise and corporate exposure caps are specified; and investment in partly paid instruments is prohibited, effective immediately.

Liberalised Remittance Scheme monitoring: daily transaction reporting by authorised dealer banks required to ensure compliance and access across banks.
Liberalised Remittance Scheme monitoring requires AD Category I banks to upload daily, transaction wise LRS information at the close of business of the next working day, or a Nil report if no data exists, as a CSV file via the prescribed XBRL portal; the reports will be accessible to other ADs to improve monitoring and ensure adherence to LRS limits under the Foreign Exchange Management Act.

FPI investment limits increased, with coupon reinvestment counted within government securities limits and corporate bond cap unified.
FPIs' investment limits are revised: G-sec limits rise incrementally, SDL limits hold, corporate bonds receive a single consolidated cap, and part of SDL long-term allocation is transferred to G-secs. Coupon reinvestment will be included in G-sec utilization at periodic reset, with the existing coupon stock added one time to the 'General' sub-category limit; the coupon rule will later extend to other debt categories. Revised numeric ceilings for debt sub-categories and total debt are prescribed and take immediate effect under statutory directions.

Government-supported line of credit enables export financing with Indian sourcing and restricted commission payments.
Authorization is granted for a Government of India supported Line of Credit by Exim Bank to finance eligible exports of goods and services and consultancy for development projects, subject to Foreign Trade Policy eligibility and Export Declaration Form requirements. The LoC sets a terminal utilization period from project completion. Sourcing rules require at least seventy-five percent of contract value to be supplied from India, with reduced thresholds for civil construction and possible further reductions by Exim Bank where sourcing is not from a third country. No agency commission is payable under the LoC; commissions may be paid from exporter resources or Exchange Earners' Foreign Currency Account balances post-realization.

Discontinuance of LoUs and LoCs for trade credits; banks may still issue letters of credit and bank guarantees under regulatory rules.
Discontinue issuance of Letters of Undertaking and Letters of Comfort by Authorised Dealer Category I banks for trade credits for imports with immediate effect; Letters of Credit and Bank Guarantees for trade credits may continue only subject to compliance with existing banking regulations on guarantees and co acceptances. Banks must inform their constituents and the Master Direction will be updated to reflect the change.

Hedging of Commodity Price Risk permitted overseas using specified derivatives subject to bank safeguards and reporting requirements.
These Directions permit residents other than individuals to hedge commodity price risk and freight risk in overseas markets using permitted products (futures, forwards, vanilla options, swaps, and certain structured products), subject to bank verification of contracted or anticipated exposure, alignment of hedge quantity and tenor, board approved hedging policy, risk management capability, OTC counterparty jurisdictional acceptability, routing of payments through a special account, statutory auditor certification, corrective action reporting to the Reserve Bank, limited SBLC/guarantee use for margins, and quarterly reporting to the Reserve Bank.

Position limits in exchange-traded INR currency derivatives consolidated into a single limit without underlying exposure; breaches reportable.
RBI permits residents and Foreign Portfolio Investors to take long or short positions in exchange-traded INR currency derivatives without establishing underlying exposure up to a single consolidated limit of USD 100 million equivalent across all INR currency pairs and across all exchanges. Participants bear responsibility for compliance; exchanges will monitor limits and report breaches to the Reserve Bank. Other operational guidelines remain unchanged and the circular is issued under provisions of the Foreign Exchange Management Act, 1999.

Line of Credit requires majority Indian content, export declaration compliance and FEMA-based approvals for financing hospital upgrade contracts abroad.
Exim Bank's Government of India supported Line of Credit to Co te d'Ivoire finances upgrade of four military hospitals, permitting export of eligible Indian goods and services with at least 75% of contract value sourced from India and up to 25% from outside. The Agreement effective 15 December 2017 provides a terminal utilization period of 60 months after scheduled completion. Shipments must be declared on the Export Declaration Form; no agency commission is payable under the LoC though exporters may use own funds or EEFC balances for commission subject to AD Category I bank compliance checks. Directions issued under FEMA.

Line of Credit supports Kenyan agricultural mechanization; exports must be majority India sourced and comply with FEMA declaration and remittance rules.
Exim Bank's Government of India supported Line of Credit to Kenya finances exports of eligible goods and services for an agricultural mechanization project, requiring that a substantial majority of contract goods and services be supplied from India with a limited portion procured abroad. Shipments must be declared on the Export Declaration Form; agency commission is not payable under the LoC though exporters may pay commission from their own resources or Exchange Earners' Foreign Currency Account after realization. AD Category I banks must notify exporters, facilitate permitted remittances, and obtain full LoC details from Exim Bank. Directions issued under the Foreign Exchange Management Act remain subject to other legal permissions.

Foreign Direct Investment rules revised to liberalize sectoral entry routes, ownership limits, and compliance requirements.
Amendments revise FDI entry routes, ownership limits and compliance across sectors: joint audit requirement when an international-network auditor is specified; 100% automatic FDI for investing NBFCs, while CICs and other investing companies require Government approval and RBI CIC compliance; competent authority for applications from countries of concern assigned to DIPP for automatic-route security-clearance cases; civil aviation carrier foreign investment capped with effective control retained by Indian nationals; real-estate broking classified as non-real-estate business allowing 100% automatic FDI; 100% automatic FDI in single brand retail with brand, sourcing and transitional global-sourcing conditions; removal of certain power exchange restrictions; expanded medical device definition; and rules for equity issuance against imports and pre operative expenses with specified documentation and reporting.

Refinancing of external commercial borrowings: overseas bank branches may refinance eligible corporates and PSUs subject to specified conditions.
Overseas branches and subsidiaries of Indian banks may refinance External Commercial Borrowings of highly rated corporates and Navratna/Maharatna PSUs provided the outstanding maturity is not reduced and the all-in-cost of the fresh ECB is lower than the existing ECB; partial refinancing is permitted on the same conditions. Other ECB policy provisions remain unchanged and the Master Direction will be updated accordingly.

Foreign investment framework under FEMA sets entry routes, sectoral caps, pricing rules, and transfer conditions for non-resident investors.
Foreign investment in India is regulated under FEMA and the Non-Debt Instruments framework, with the Reserve Bank administering the rules through directions to authorised dealers and related reporting and payment requirements. The direction consolidates the legal meaning of foreign investment, foreign direct investment, foreign portfolio investment, investment vehicles, LLP investment, downstream investment, non-repatriation holdings, pricing, valuation, and transfer mechanics, while making the underlying NDI Rules and other FEMA notifications prevail in case of inconsistency. It also sets out prohibited sectors, Government-route restrictions for specified ownership patterns, and the permitted routes, instruments and transfer mechanisms for non-resident investors.

After-sale repair services classification permits automatic FDI when goods sales are naturally bundled; standalone parts sales treated as retail trading.
After-sale and repair services are eligible for 100% foreign investment on the automatic route when the sale of goods such as spare parts or accessories is naturally bundled with the service in the ordinary course of business; standalone sales of spare parts or accessories are to be treated as retail trading for FDI policy purposes, subject to applicable laws, security and other conditionalities.

FPI investment limits revised: increased government securities allocations take effect; SEBI to issue operational guidelines.
The circular increases Foreign Portfolio Investor limits in Central Government Securities and State Development Loans for January-March 2018, provides prior and revised numerical ceilings and aggregate totals, makes the revisions effective from January 1, 2018, directs that allocation and monitoring will follow operational guidelines to be issued by the securities market regulator, instructs Authorised Dealer Category I banks to inform constituents, and states that the directions are issued under statutory foreign exchange powers without prejudice to other required permissions.

Government-supported Line of Credit finances exports for training and incubation centres subject to sourcing and compliance conditions.
Government-supported Line of Credit finances exports of eligible goods and services for establishment of vocational training and business incubation centres; at least 75 per cent of contract value must be supplied from India with up to 25 per cent procured from outside. Shipments under the LoC must be declared on the Export Declaration Form. No agency commission is payable under the LoC, although exporters may remit commission from their own funds or Exchange Earners' Foreign Currency Accounts after realisation, subject to extant remittance rules and Authorised Dealer compliance under FEMA.

Line of Credit supports export financing with 75% local content requirement and FEMA based reporting and remittance rules.
A Government-supported Line of Credit to a Mauritius infrastructure company permits financing of exports of eligible goods and services from India, requires at least 75% of contract value to be sourced from India (with up to 25% from abroad), mandates Export Declaration Form reporting, sets a terminal utilisation period from project completion, and prescribes that no agency commission is payable under the LoC though exporters may use own funds or EEFC balances for commission remittance subject to extant rules; directions issued under FEMA sections 10(4) and 11(1).

Simplified Hedging Facility enables streamlined foreign exchange hedging with designated banks, simplified documentation, and central reporting requirements.
The Simplified Hedging Facility permits resident and non resident entities (excluding individuals) to hedge exchange rate risk using permitted OTC and exchange traded currency derivatives under a streamlined regime. Each user appoints a Designated Bank to assess needs, set and monitor limits up to the facility cap (with discretionary extension), and report users and limits to a Trade Repository. OTC booking rules, rebooking, treatment of gains and losses, prohibition on concurrent hedging of the same exposures, annual certification by a senior finance officer, and TR based monitoring form the core operational and compliance mechanics.

Line of Credit supported by the government enables export financing for railway projects subject to FEMA and export rules.
A Government supported Line of Credit from Exim Bank to Mongolia finances exports for railway and related infrastructure projects, requiring at least 75 percent of goods and services value to be supplied from India and permitting the remaining 25 percent to be procured abroad. The LoC became effective August 25, 2017, carries a terminal utilization period of 60 months after project completion, requires shipment declaration on the Export Declaration Form, disallows agency commission under the LoC while permitting exporter-paid commission from own or EEFC resources subject to realization, and is issued under the Foreign Exchange Management Act.

Line of credit support enables export financing for specified infrastructure projects with sourcing and compliance conditions.
Exim Bank's Government supported Line of Credit finances eligible exports for specified Sri Lankan railway projects, covering goods and services qualifying under the Foreign Trade Policy, with at least 75 per cent of contract value supplied from India and up to 25 per cent procured outside India. The Agreement includes a terminal utilisation period after project completion; shipments must be declared on the Export Declaration Form. No agency commission is payable under the LoC, though exporters may use their own funds or EEFC balances for commission subject to realisation and AD Category I compliance.

Hedging INR trade exposures: central treasuries may contract with authorized dealer banks under prescribed models, documentation, and settlement rules.
Non residents and their central treasuries may hedge INR invoiced trade exposures with AD Category I banks in India under two models: Model I (via an overseas bank correspondent) and Model II (direct dealing with the AD bank). AD banks must verify underlying trade documentation, obtain prescribed undertakings and KYC/AML certification, confine hedge amount and tenor to the underlying transaction and regulatory limits, settle via Nostro/Vostro accounts, prohibit rebooking of cancelled contracts while permitting a single rollover tied to extension of the underlying transaction, and report Model II contracts to the trade repository.