The move is expected to prevent interest rate-related volatility, said the media report.
At the same time, the Securities and Exchange Board of India said that existing investments in Treasury Bills or T-Bills will be allowed to taper off on maturity or sale.
FPIs would encompass all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI) under a new regime that comes into force on June 1.
Existing overseas investor classes such as FIIs, sub-accounts and QFIs will have to convert to the new regime eventually.
Investments by FPIs in government securities will be permitted only in dated securities of residual maturity of one year and above.