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I am not able to create IAM policy to create RDS instance.

Can anyone, please assist me with the JSON action statement for the same.

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There is an inbuilt RDS Service in AWS, which you can tweak according to your requirements, the below is the policy for RDS Full access.

{
"Version": "2012-10-17",
"Statement": [
{
"Sid": "SecretsManagerDbCredentialsAccess",
"Effect": "Allow",
"Action": [
"secretsmanager:GetSecretValue",
"secretsmanager:PutResourcePolicy",
"secretsmanager:PutSecretValue",
"secretsmanager:DeleteSecret",
"secretsmanager:DescribeSecret",
"secretsmanager:TagResource"
],
"Resource": "arn:aws:secretsmanager:*:*:secret:rds-db-credentials/*"
},
{
"Sid": "RDSDataServiceAccess",
"Effect": "Allow",
"Action": [
"dbqms:CreateFavoriteQuery",
"dbqms:DescribeFavoriteQueries",
"dbqms:UpdateFavoriteQuery",
"dbqms:DeleteFavoriteQueries",
"dbqms:GetQueryString",
"dbqms:CreateQueryHistory",
"dbqms:DescribeQueryHistory",
"dbqms:UpdateQueryHistory",
"dbqms:DeleteQueryHistory",
"rds-data:ExecuteSql",
"rds-data:ExecuteStatement",
"rds-data:BatchExecuteStatement",
"rds-data:BeginTransaction",
"rds-data:CommitTransaction",
"rds-data:RollbackTransaction",
"secretsmanager:CreateSecret",
"secretsmanager:ListSecrets",
"secretsmanager:GetRandomPassword",
"tag:GetResources"
],
"Resource": "*"
}
]
}

For more information on IAM policies refer to this AWS Tutorial

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