The Securities and Exchange Board of India halted fresh investments in mutual funds that invested overseas in February 2022 after the industry breached the $7 billion overseas investment limit. The Reserve Bank of India set an additional $1 billion limit for investments in overseas exchange-traded funds, capping industry-wide mutual fund investments in foreign assets. Initially set in 2009 to protect forex reserves and retail investors, these limits no longer align with India's financial maturity.For perspective, forex reserves stood at $283.47 billion in December 2009; today, they exceed $600 billion. Since then, India has demonstrated greater regulatory and policy confidence by opening up foreign direct investments in sectors once considered untouchable—insurance, multi-brand retail, and defence.
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