One of the least sensible things that India does is to put restrictions on foreigners buying rupee-denominated bonds, despite their being one of the best possible channels through which India can get engaged into globalisation. In this area, policy makers in India are clearly out of touch with present knowledge. (Here is background, and for the conceptual picture, see : link, link, link).
Once this quantitative restriction (QR) is in place, there is an allocative question: Which firms are going to get these limits? SEBI has just released the names of the firms who have won allocations in an auction. While there was space of Rs.41,000 crore on offer, the bids seem to have only added up to Rs.29,000 crore. Does this mean there is no charge for these bidders? Still, this sets the stage for Rs.29,000 crore of investments in the corporate bond market over the next 1.5 months.