Main Note - [1.1.2 Voluntary Retention Route (VRR)](Foreign%20Investment%20in%20India%20(Various%20Routes).md#1.1.2%20Voluntary%20Retention%20Route%20(VRR)) in [Foreign Investment in India (Various Routes)](Foreign%20Investment%20in%20India%20(Various%20Routes).md) #### 1.1.2 Voluntary Retention Route (VRR) It is one of the [routes](Foreign%20Investment%20in%20India%20(Various%20Routes).md#1.1%20Debt%20(Rupee)-%203%20Routes) by which [FPIs](Foreign%20Investment%20in%20India%20(Various%20Routes).md#1.%20FPI%20(Debt%20&%20Equity)-%20Foreign%20Portfolio%20Investments) can invest in govt. securities in India. 1. ==[Oct 5, 2018](https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=45165) - RBI released [discussion paper](RBI_Reports_Discussion%20Paper_20181005_%20Date%20-%2005%20Oct%202018%20‘Voluntary%20Retention%20Route’%20(VRR)%20for%20investment%20by%20FPIs%20–%20Discussion%20Paper.pdf) on ‘Voluntary Retention Route’ (VRR) for investment by FPIs== 2. [March 1, 2019](RBI_Press%20Release_20190301_RBI%20introduces%20the%20Voluntary%20Retention%20Route%20for%20Investments%20by%20Foreign%20Portfolio%20Investors%20(FPIs)%20-%20Voluntary%20Retention%20Route.pdf) - The investment [scheme](https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11492&Mode=0) was introduced 3. [March 1, 2019](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11492&Mode=0) - Directions were issued 1. It is only for FPIs. 2. It is for both corporate and govt. debt. 3. The aim of this scheme to undertake long-term investments in Indian debt markets. Under this scheme, FPIs have been given greater operational flexibility in terms of instrument choices besides exemptions from certain regulatory requirements. 4. There is also no micro-level caps in this route, other than the total limit 5. As the name suggests, the FPI voluntarily commits to retaining a Committed Portfolio Size (CPS) in India for a minimum of three years. 4. [May 24, 2019](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11561&Mode=0) - Scheme was revised 5. [May 24, 2019](RBI_Press%20Release_20190524_RBI%20notifies%20the%20revised%20Voluntary%20Retention%20Route%20for%20Investments%20by%20Foreign%20Portfolio%20Investors%20(FPIs)%20and%20opens%20allotment%20‘on%20tap’.pdf) - RBI reopened the allotment of limits on tap under the revised scheme > [Box V.1 Voluntary Retention Route (VRR) for Foreign Portfolio Investment in Debt](RBI_Annual%20Report_2019.pdf#page=119&selection=230,0,231,72) in Annual Report-2019, dated Aug 27, 2019 6. [Jan 23, 2020](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11561&Mode=0) - Directions were updated 7. [May 22, 2020](https://rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=11896) - Relaxations in VRR route were announced view of the disruptions caused by COVID-19 8. [Feb 10, 2022](RBI_Press%20Release_20220210_RBI%20reopens%20allotment%20of%20investment%20limit%20under%20the%20Voluntary%20Retention%20Route%20for%20Investments%20by%20Foreign%20Portfolio%20Investors.pdf) - The overall investment limit under VRR was reopened and increased to INR 2.5 trillion. 9. ==Feb 10, 2022 - [Directions](RBI_Notification_20220210_‘Voluntary%20Retention%20Route’%20(VRR)%20for%20Foreign%20Portfolio%20Investors%20(FPIs)%20investment%20in%20debt.pdf) ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt were updated.== 1. As of 2020, the RBI replaced the segmented limits (General / Long-Term) 10. [Jan 23, 2020](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11798) - ‘Voluntary Retention Route’ (VRR) for Foreign Portfolio Investors (FPIs) investment in debt – relaxations. 11. [Feb 6, 2026](RBI_Notification_20260206_Voluntary%20Retention%20Route%20–%20Imparting%20predictability%20and%20increasing%20ease%20of%20doing%20business.pdf) - Investment limits under the VRR were subsumed under the investment limit for FPI investments under the General Route. So the separate ₹2.5 lakh crore cap on VRR was removed. 1. With effect from April 01, 2026, all existing and future investments under the Voluntary Retention Route are subject to the investment limits stipulated for FPI investments under the General Route. ## Related Notes 1. [Foreign Investment in India (Various Routes)](Foreign%20Investment%20in%20India%20(Various%20Routes).md) 2. [Capital Flows - Account & Management](Capital%20Flows%20-%20Account%20&%20Management.md) ## References 1. [References](Capital%20Flows%20-%20Account%20&%20Management.md#References)