The major indices of the world are insisting that India lift caps on foreign institutional money inflows before admitting the country, Rajan said, adding that talks in this regard were still on.
"I think the indices want for the most part a complete elimination of limits on government securities holdings by international investors," he said, adding that such a condition cannot be met by the country.
"Until we see through the process of unwinding of this quantitative easing as well as the beginning of interest rate tightening cycle (in the developed world), it would be premature for us to completely abandon all limits," he said, adding that any such move will be "irresponsible".
"We are still in talks (with some major indices)...they (talks) haven't been abandoned," he said, during an analysts call.
Foreign investors are welcome in the country's markets and the country has been constantly expanding the limits as and when the investments expand, he added.
"We have said repeatedly we will expand the limits as and when they get built...but completely abandoning them at this stage I think will be irresponsible," he said.
Rajan pointed out the recent decision to increase the FII play in country's debt markets by USD 5 billion to USD 25 billion, after the investments were closing in to breach the USD 20 billion cap.
"If there are indices which want to include us with the promise, we will expand as and when necessary, we are happy to have a discussion. We are still in discussion with some," he said.
Experts opine that inclusion in an index like JP Morgan Government Bond Index-Emerging Markets will help the country attract more funds into the markets.
Talks of such inclusion have been on since last year, when the rupee depreciated strongly, and there was a desperate search for avenues to strengthen the foreign currency inflows.