After easing registration norms for foreign investors, the markets watchdog Securities and Exchange Bureau of India (Sebi) has now allowed foreign institutional investors (FIIs) to directly invest in government debts without having to participate in the auction process.

“FIIs/QFIs can now invest in government debt without purchasing debt limits till the overall investment reaches 90 per cent, after which the auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt,” Sebi said in a statement on Friday.

Prior to the announcement, foreign investors looking to invest in government debts were required to purchase limits through periodic auctions which would subsequently lapse once the securities were sold. This was a time-consuming process thus, making the investment process tedious and unattractive.

With the current account deficit refusing to budge from the current level of 4.8 percent and foreign investors pulling out of the market, the move comes as some relief.

On Thursday, Sebi had eased the registration (know-your-customer) norms for low-risk foreign investors including government agencies, central banks and international organisations.

However, some critics point that merely flexing investment norms was not enough. The macroeconomic indicators, analysts point, need to be stabilized for the country to get back to its “attractive investment destination” status.