Mumbai: RBI has eased investment restrictions for foreign portfolio investors in the corporate debt market. This move is likely to deepen market liquidity and align India more closely with global capital flows. RBI announced it will remove both the short-term investment cap and the concentration limit that previously applied to FPIs investing through the general route.Under the earlier framework, FPIs could only invest in corporate bonds with a residual maturity of more than one year. Their holdings were also capped at 50% of any single issuance, with tighter limits based on investor type.These constraints, designed to mitigate concentration risk and discourage speculative flows, did not apply to the voluntary retention route, a separate channel with lock-in conditions.The removal of these restrictions grants foreign investors greater freedom to deploy capital tactically. FPIs can now hold a larger share of individual bond issues and invest freely across the maturity curve, including in paper with less than one year to maturity.