What is Purpose Code P0007?
P0007 applies when a foreign investor purchases Indian debt securities — corporate bonds, debentures, non-convertible debentures (NCDs), or government securities — and remits the purchase consideration into India. It is the debt counterpart to P0006 (which covers equity FDI), and together they form the core FDI/foreign investment inflow codes for Indian entities raising capital abroad.
Foreign investment in Indian debt can occur through multiple routes: FDI in unlisted debentures, Foreign Portfolio Investor (FPI) investment in listed corporate bonds or G-Secs, or ECB structures that involve debt securities. P0007 broadly captures foreign money coming in to subscribe to Indian debt instruments.
See all RBI purpose codes
When to Use P0007
Use P0007 when your Indian company or entity receives money from a foreign investor specifically in exchange for debt securities. Common scenarios:
- An Indian corporate issuing NCDs or bonds to a foreign investor through the FDI debt route
- An Indian company’s bonds being purchased by a Foreign Portfolio Investor (FPI) registered with SEBI
- Foreign investment into Indian government securities (G-Secs) or Treasury Bills under the permitted FPI route
- A foreign fund subscribing to listed or unlisted debentures issued by an Indian NBFC or housing finance company
- Private placement of Indian corporate bonds with a foreign institutional investor
Quick check: Is foreign money coming in to buy your Indian company’s bonds, debentures, or NCDs? Use P0007. If it’s to buy equity shares, that’s P0006. If it’s a foreign loan (not securities), that’s P0013.
Wrong Code? Use These Instead
P0001 is specifically for equity. Here’s where people commonly mix things up:
|
If your money is from… |
Correct code to use |
|
Foreign investment in Indian equity shares (FDI) |
P0006 |
|
Foreign investment in Indian real estate |
P0008 |
|
Foreign portfolio investment in listed Indian equity |
P0009 |
|
Foreign portfolio investment in listed Indian debt (FPI) |
P0010 |
|
External Commercial Borrowing — direct loan (not securities) |
P0013 |
Documents to Keep Ready
Your bank will ask for some or all of these when processing a P0001 remittance:
|
Document |
Why you need it |
|
Debenture / bond subscription agreement |
Primary legal document for the debt security issuance to the foreign investor |
|
Board resolution for debt issuance |
Company’s board approval for the NCD/bond issuance |
|
RBI / SEBI reporting (as applicable) |
Debt security issuances to foreign investors have specific regulatory reporting obligations |
|
Offer document or information memorandum |
For private placements — describes the terms of the debt instrument |
|
e-FIRA |
Official proof of inward remittance tagged P0007 — required for regulatory filings |
|
KYC of foreign investor |
FEMA requires KYC documentation for foreign investors in Indian securities |
What is an e-FIRA — and Why Does It Matter?
An e-FIRA (Electronic Foreign Inward Remittance Advice) is the official proof that foreign money entered India. It confirms the nature and purpose of the inflow, which matters for tax treatment, FEMA compliance, and audit trails.
Your bank generates it automatically once the funds land. You can usually download it from your internet banking portal or request it at your Forex desk. The e-FIRA will reflect the correct purpose code, which your CA or accounts team will reference during filings.
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Frequently Asked Questions
Q: What is RBI purpose code P0007?
P0007 is used when a foreign entity invests in Indian debt securities — bonds, debentures, NCDs, or government securities — and the purchase consideration is remitted into India. It covers foreign investment in both listed and unlisted Indian debt instruments.
Q: What is the difference between P0007 and P0010?
P0007 is used when a foreign entity invests in Indian debt securities, bonds, debentures, NCDs, or government securities, and the purchase consideration is remitted into India. It covers foreign investment in both listed and unlisted Indian debt instruments.
Q: What is the difference between P0007 (debt securities) and P0013 (ECB)?
P0013 is for External Commercial Borrowings, direct foreign currency loans taken by Indian companies from abroad. P0007 is for debt securities (bonds, debentures, NCDs) subscribed to by foreign investors. Both are forms of debt, but the legal instrument differs: one is a loan agreement, the other is a marketable debt security.
Q: Are there limits on how much foreign investment in Indian debt is allowed?
Yes. The RBI sets macro-level limits on aggregate foreign investment in Indian corporate bonds and government securities. These limits are periodically revised. Additionally, individual sectors (banking, insurance) may have specific rules on foreign debt investment. SEBI and RBI circulars set the current applicable limits — your AD bank or legal counsel can advise.
Q: What reporting is required when an Indian company issues debt securities to foreign investors under P0007?
Reporting requirements vary by route and instrument type. FDI-route debt issuances require FCGPR-equivalent filings. FPI purchases of listed securities are reported through the SEBI/custodian framework. Your Company Secretary, compliance officer, and AD bank should guide you on the specific filings applicable to your instrument and route.
Q: Can an Indian startup receive foreign investment in the form of convertible debentures under P0007?
Yes, provided the convertible debenture structure complies with FEMA's FDI pricing and documentation norms. Optionally Convertible Debentures (OCDs) or Compulsorily Convertible Debentures (CCDs) are popular in startup financing. Upon conversion to equity, separate FCGPR reporting is required. P0007 would cover the initial inward remittance when the debenture is subscribed.
