FAR Bonds: Foreign Inflows into Government Securities
Why in the news
Foreign money kept flowing into Indian government bonds under the Fully Accessible Route, helped by Bloomberg’s inclusion of India in an emerging-market local currency index.
Key facts
| Period | Net FAR inflow |
|---|---|
| January 2025 | ₹14,430 crore |
| 31 January alone | ₹9,000 crore (after Bloomberg inclusion) |
| February 2025 (to date) | ₹4,530 crore |
About FAR
- Fully Accessible Route: non-residents can buy specified G-secs without any limit on amount.
- Introduced by RBI in March 2020 to widen foreign presence, improve liquidity and lower government borrowing cost.
- Helps India enter global bond indices; most FAR securities qualify for JP Morgan’s GBI-EM-GD.
Other routes
- Medium Term Framework: FPI regime for central G-secs and SDLs with set limits.
- Voluntary Retention Route: investors keep part of their holding for a fixed period, gaining flexibility.
Exam angle
- Regulator: RBI; year: March 2020; no investment ceiling.