India central bank restricts rupee non-deliverable derivatives to hedging only

The RBI's move narrows the rupee NDF market to a hedging-only channel, which matters most for offshore participants who have used these contracts for positioning rather than pure risk management. The 20% risk premium effectively raises the cost of that access, so the significance lies less in the headline restriction than in how much offshore liquidity migrates to other instruments or venues. Whether onshore forwards absorb that activity, and whether the premium is revised, are the open questions worth watching.