Foreign portfolio investors have significantly increased their investments in Indian government securities through the Fully Accessible Route (FAR), with cumulative inflows reaching Rs 35,335 crore so far in 2026. According to National Securities Depository Ltd (NSDL) data, June alone accounted for Rs 20,722 crore of these inflows as of June 24, making it the strongest month for FAR investments this year.

The renewed interest follows a series of measures announced by the Reserve Bank of India (RBI) during its June monetary policy review to attract foreign capital into the domestic debt market. The central bank expanded the FAR framework by including all new issuances of 15-year, 30-year and 40-year government securities, allowing foreign investors to invest in these bonds without investment limits. The RBI also eased several restrictions under the general investment route for foreign portfolio investors.

Market participants believe the policy changes have improved the attractiveness of Indian government bonds, particularly at a time when global investors are seeking relatively stable fixed-income opportunities. Higher foreign participation is expected to enhance liquidity in long-duration government securities, reduce borrowing costs for the government, and provide support to the rupee through stronger capital inflows.

In contrast to the strong debt inflows, foreign investors have continued to reduce their exposure to Indian equities amid global risk aversion and a preference for safer fixed-income assets. The divergence highlights the growing appeal of India's sovereign debt market following the RBI's policy initiatives.