The Reserve Bank of India (RBI) has made a significant policy change by relaxing the Liberalised Remittance Scheme (LRS) norms, now permitting individuals to invest in securities listed on the International Financial Services Centre (IFSC) at GIFT City. This adjustment aims to attract more international capital into the Indian financial markets, offering investors an expanded range of investment opportunities. By opening up this avenue, the RBI seeks to enhance the global integration of India’s financial markets.
This policy change is designed to provide Indian investors with greater flexibility and options to diversify their investment portfolios. Previously, individual investments in overseas securities were limited, but now, with access to IFSC-listed securities, investors can explore a broader spectrum of assets. This move is expected to appeal particularly to high-net-worth individuals and institutional investors looking for diversified and potentially higher-return opportunities.
The relaxation of LRS norms is anticipated to have a positive impact on the development of India’s financial markets. By encouraging investments in IFSC-listed securities, the RBI aims to stimulate growth in this specialized financial zone, which has been developed to attract global investors. The influx of international capital could lead to increased liquidity and market depth, further integrating India into the global financial system and enhancing its financial infrastructure.
