Fully Accessible Route

The Fully Accessible Route (FAR) is a channel through which non-residents may invest in specified Indian government securities without being constrained by the usual foreign-investment limits applicable to government debt. Introduced by the Reserve Bank of India in 2020, it operates alongside the existing routes for foreign portfolio investment in debt securities.

Coverage and operation

The RBI identifies particular Central Government securities as “specified securities” eligible under FAR. Once notified, these securities remain eligible for investment under the route until maturity.

• Investment under FAR is open to eligible non-resident investors, including foreign portfolio investors, subject to applicable foreign-exchange and securities regulations.
• Foreign investment in specified securities is not counted within the aggregate limits prescribed for foreign portfolio investment in government securities.
• FAR securities remain available to domestic investors; the route does not reserve them exclusively for non-residents.
• The RBI may add new government securities to the eligible list through notifications.

Purpose and significance

FAR seeks to deepen the government securities market by widening the investor base and facilitating greater non-resident participation in Indian sovereign debt.

• A broader investor base can improve liquidity and price discovery in the government bond market.
• Additional foreign demand can support government resource mobilisation through market borrowing.
• Absence of quantitative investment ceilings makes eligible securities more compatible with global bond-market access and index participation.
• Greater foreign participation can also increase exposure to global interest-rate changes, capital-flow volatility and exchange-rate movements.

Distinction from other investment routes

Under the general limit-based route, foreign portfolio investment in government securities remains subject to aggregate ceilings and related regulatory conditions. FAR removes the quantitative ceiling only for securities specifically notified under the route, while the Voluntary Retention Route is a separate framework based on investors voluntarily retaining a committed portion of their investments in India.

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