In an announcement, Indian Finance Minister P Chidambaram said that India would be easing its restrictions on foreign institutional investors or FIIs in central and corporate bond issues. This move is designed to attract capital inflows and even out an ever increasing current account deficit.

In the new rules, foreign investments can run up to US$25 billion in long term government bond issues. This is an increase from the previous US$15 billion while the ceiling on corporate bonds remains at US$51 billion. The separate limits on the different kinds of corporate indebtedness has also been removed under the new measure.

Chidambaram announced in a conference of attendees, "Effect from April 1, there will be two baskets - one of US$25 billion for government securities and one US$51 billion for all corporate bonds."

India has issued these restrictions to its debt markets owing to its reluctance to have debts against overseas investors.