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India opens wider access to foreign investors

New rules expand overseas investment limits in equities, relax restrictions on government bond investments and exempt FPIs from tax on G-Sec interest and capital gains.

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Indian equities and government securities are set to become more accessible to overseas investors after the Finance Ministry announced a series of reforms aimed at attracting long-term foreign capital and deepening domestic capital markets.

The measures, announced June 5, include liberalized investment rules for individual Persons Resident Outside India (PROIs), expanded access for Foreign Portfolio Investors (FPIs) in government securities, and tax exemptions on interest and capital gains earned by FPIs from investments in government bonds.

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The reforms come as the government seeks to strengthen India's position as a global investment destination and attract more stable foreign capital into domestic markets. The measures also build on recent efforts to simplify investment procedures and deepen the country's capital markets as India gains greater visibility among global investors following the inclusion of Indian government bonds in major international debt indices.

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