India is poised to announce steps to draw more foreign investments by reducing taxes and removing caps on the ownership of some bonds as soon as this week, according to people with knowledge of the matter.
The cabinet on Wednesday is expected to consider a significant cut in the taxes paid by global funds on the nation’s bonds, the people said, asking not to be identified as the details are private. The cabinet will also consider whether it should eliminate the 20% levy on interest earned from bonds, or reduce it to a bare minimum, they said.
Separately, the Reserve Bank of India is likely to designate some long-tenor sovereign notes as fully accessible, allowing overseas investors to buy them without limits, they said. The previous tweak to the list of government securities available under this route was in 2024, when the central bank removed 14- and 30-year bonds.
The Finance Ministry and the Reserve Bank of India didn’t respond to emails seeking comment. Bloomberg News reported last month that India is considering the tax cuts following a recommendation by the central bank.
The rupee’s slide to record lows has prompted authorities to step up efforts to stem its decline, with Prime Minister Narendra Modi calling on citizens to conserve foreign exchange amid a surge in oil import costs. The currency has been hurt by several factors, including US trade tariffs, record foreign fund outflows, and the oil shock caused by the Iran war, all of which have strained the country’s finances.
The rupee hit an all-time low of 96.9650 on May 20, but has since rebounded as the central bank stepped up support and oil prices eased after renewed US-Iran peace efforts. The currency is the second-worst performer in Asia this year, down more than 6% versus the dollar.
The currency closed 0.5% lower to 95.71 per dollar on Wednesday, while the 10-year yield rose 1 basis point to 7.02%.
The government is also likely to notify its plan to permit individual persons resident outside India, or PROIs, to invest in shares of listed Indian companies through the portfolio investment scheme, according to the people.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.