India drops taxes on foreign investment in government bonds
India just dropped withholding and capital gains taxes on foreign investments in its government bonds.
The goal? Make it easier for overseas investors to put money into India and boost the country's chances of joining big global bond indexes.
The changes also remove limits on some debt securities and encourage more foreign currency deposits from nonresident Indians.
India sees $1 billion bond inflows
Foreign investors jumped in, buying more than $1 billion in government bonds within three days, way up from earlier this year.
Bond yields fell, especially for shorter-term bonds.
While there are still worries about the rupee's recent ups and downs (it dropped 5.86% so far this year), economists now expect a $5 billion surplus in India's balance of payments instead of a big deficit, showing growing confidence after these reforms.