Union finance minister Nirmala Sitharaman on Friday gave some reasons to cheer for the foreign portfolio investors (FPIs) community, when she eased KYC norms and announced other measures that could bring in more investments into the country.

“As a key source of capital to the Indian economy, it is important to ensure a harmonised and a hassle-free investment experience for FPIs. Hence, it is proposed to rationalise and streamline the existing Know Your Customer (KYC) norms for FPIs to make it more investor friendly without compromising the integrity of cross-border capital flows’’, she said while announcing her maiden Budget.

FPIs will be permitted to subscribe to listed debt instruments issued by real estate investment trusts (ReITs) and infrastructure investment trusts (InvITs). Investments by these investors in debt securities issued by infrastructure debt funds would be allowed to be transferred and sold to domestic investors in a timely manner.

The finance minister also removed the statutory limit for FPI limit in a company from 24 per cent to the sectoral foreign investment limit. Currently, this ceiling of 24 per cent can be raised up to the sectoral cap subject to the approval of the board and company shareholders.

“It is proposed to permit investments made by FIIs/FPIs in debt securities issued by Infrastructure Debt Fund — Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in period,” she said.

Reacting to the proposals, JMP Advisors chairman Jairaj Purandare said, “In presenting the budget, the government has taken due cognisance of the fact that FPI is a significant source of capital for the economy.”

Among other proposals, Sitharaman said the NRI portfolio route would be merged with the FPI route.