Finance minister Nirmala Sitharaman on Monday signalled that the Centre could unveil additional measures to attract foreign capital into India, indicating that a recent package of tax and regulatory reforms aimed at overseas investors represents only the “first step” of a broader strategy to deepen participation in domestic financial markets.
Speaking at the Mindmine Summit 2026 in New Delhi, Sitharaman said the government recognises the need for higher foreign capital inflows and is prepared to take further steps beyond the bond market.
“Although we have confined it at the moment only to the bond market, certainly that is not the end of the story. We will be doing more. We recognise the need for more foreign capital to come in,” she said.
The remarks come after a series of measures announced by the Reserve Bank of India and the government earlier this month to improve the attractiveness of Indian debt markets for global investors.
On June 5, the RBI expanded the pool of securities eligible under the Fully Accessible Route (FAR) by including all new issuances of 15-year, 30-year and 40-year government securities. The central bank also removed restrictions relating to short-term investments, concentration limits and security-wise investment caps applicable to foreign portfolio investors.
On the same day, the government promulgated an ordinance exempting foreign investors from income tax on interest income and capital gains arising from government securities held under the FAR. Effective April 1, 2026, the move removes the earlier 20 per cent withholding tax on interest income and the 12.5 per cent long-term capital gains tax on listed bonds held for more than a year.
The RBI has also introduced concessional forex swap facilities for banks mobilising FCNR(B) deposits and for public sector undertakings raising funds through external commercial borrowings. Sitharaman said banks could freely mobilise FCNR(B) deposits as exchange-rate risks would be hedged by the RBI.
The finance minister also highlighted risks arising from tariffs, import dependence and supply-chain disruptions, citing crude oil, fertilisers and shipping costs as key vulnerabilities.
She also cautioned that a weaker-than-normal monsoon could pressure farm incomes, although adequate foodgrain buffer stocks should help prevent shortages.