In a major policy push to attract overseas capital, the Centre has exempted foreign investors from paying taxes on interest income and capital gains earned from investments in Indian government securities (G-Secs). The move, coupled with RBI measures to boost dollar inflows, is aimed at strengthening India’s external position at a time of rising geopolitical and economic uncertainties.
Market experts estimate India could face a $40-50 billion (₹4.76 lakh crore) balance-of-payments gap, making fresh foreign capital crucial for supporting the rupee and financing external obligations.
What has changed?
Through a new ordinance, the government has exempted Foreign Institutional Investors (FIIs), Foreign Portfolio Investors (FPIs),…