India exempts foreign investors from capital gains tax, ₹32,630cr inflows
India just made a bold move: foreign investors don't have to pay capital gains tax on government bonds anymore.
Since the announcement on June 5, 2026, overseas funds have rushed in, investing ₹32,630 crore ($3.5 billion) in these bonds.
The exemption covers government securities of all tenures through an ordinance amending tax provisions, effective from April 1, 2026, and was greenlit by the Union Cabinet.
RBI opens FAR government bond issuances
This tax relief is part of a bigger plan to strengthen India's debt market and help the rupee bounce back after recent pressures.
The RBI will also open up new issuances of 15-year, 30-year, and 40-year government bonds as part of the Fully Accessible Route (FAR) and included in three global bond indexes for global investors, is expanding limits for NRIs and OCIs and are being extended to all individual persons residing outside India, and will provide a facility of concessional forex swap for about four months till September 30, all aiming to keep the rupee steady and attract more foreign money.