India announced restrictions on foreign-currency outflows by local companies and individuals after measures to contain a record current-account deficit and attract overseas investors failed to steady the rupee.

The Reserve Bank of India reduced the amount that companies can invest overseas without seeking approval to 100 percent of their net worth from 400 percent, according to an e-mailed statement. Residents can remit $75,000 in each financial year, from a previous limit of $200,000. The rupee erased losses in the offshore market after the announcement.

The restrictions follow the central bank’s moves to tighten cash supply and the government’s attempts to rein in imports by raising gold tariffs. The latest steps reflect a shift to “Plan B,” addressing the capital account after trying to contain the current account, according to UBS AG.

“The minute you restrict outflows, people will start legitimately speaking in terms of capital controls, although these are only on locals and not on foreign investors,” Bhanu Baweja, the global head of emerging market cross asset strategy at UBS, said in a phone interview from London. “At best it restricts about $5 billion of flows annually, which doesn’t make a dent on the big picture.”

The rupee plunged to an unprecedented 61.8050 per dollar on Aug. 6, as foreign investors pulled about $10 billion from Indian bonds on concern the U.S. will pare stimulus. One-month offshore non-deliverable rupee forwards rose 0.1 percent to 61.87 per dollar after today’s announcement. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.