Module: General Practice
Q45: Which of the following routes for Foreign Investment in India is INCORRECTLY described?
✅ Correct Answer: C
The description of FAR is incorrect because it has NO quantitative limits.
The Fully Accessible Route (FAR) was introduced to allow non-residents to invest in specific Government Securities (G-Secs) without any ceiling.
This was a major step towards Capital Account Liberalization in the bond market and was a precondition for including Indian G-Secs in global bond indices (like the JP Morgan Bond Index inclusion in 2024). Normal FPI routes have a "General Limit" (e.g., 6% of outstanding stock), but FAR securities are exempt.
The Fully Accessible Route (FAR) was introduced to allow non-residents to invest in specific Government Securities (G-Secs) without any ceiling.
This was a major step towards Capital Account Liberalization in the bond market and was a precondition for including Indian G-Secs in global bond indices (like the JP Morgan Bond Index inclusion in 2024). Normal FPI routes have a "General Limit" (e.g., 6% of outstanding stock), but FAR securities are exempt.