Foreign investors boost FAR G-Sec holdings as rupee strengthens

Foreign portfolio investor (FPI) holdings in fully accessible route (FAR) government securities surged to ₹3.65 lakh crore as of November 9, marking a substantial increase driven by favourable market conditions.

The nearly ₹8,000 crore inflow reflects renewed appetite among international investors for Indian debt instruments, buoyed by rupee appreciation against major currencies and declining bond yields. The combination of these factors has enhanced the attractiveness of government securities for foreign investors seeking exposure to Indian fixed-income markets.

A stronger rupee reduces currency risk for foreign investors converting proceeds back to their home currencies, while easing yields improve bond valuations and offer capital appreciation opportunities. These dual tailwinds have created an conducive environment for foreign capital to flow into India's debt markets.

The uptick in FAR G-Sec holdings underscores sustained international confidence in India's economic trajectory and debt management credentials. FAR securities, which are freely tradeable without quantitative restrictions, have become a preferred route for overseas investors looking to participate in India's government bond market.

The momentum in FPI inflows into Indian government securities comes as global markets reassess interest rate trajectories and emerging market opportunities, positioning India's debt instruments competitively within the regional investment landscape.