MUMBAI (Reuters) - India should remove caps on foreign investment in rupee-denominated debt, said a panel commissioned by Securities and Exchange Board of India (SEBI).
A research paper published by an internal department of the SEBI said the rationale behind limiting foreign ownerships of Indian debt was not in line with the current economic policy goals.
The research was conducted by SEBI's Development Research Group and its recommendations are non-binding.
India currently limits foreign investments in debt at $81 billion for both corporate and government debt, apart from several other restrictions based on investor profile, tenure and issuer category.
However, only 36.45 percent of that limit was currently utilised as of Tuesday, according to depository data.
SEBI recently partially removed quota auction rules allowing foreigners to buy Indian government and corporate debt securities without having to bid for it first.
For the SEBI paper, click on (http://link.reuters.com/keh43v)
(Reporting by Himank Sharma; Editing by Anand Basu)