India expanded foreign portfolio investor access to government securities by eliminating capital gains tax and withholding tax on income from sovereign bond holdings.
Finance Ministry officials said the move aims to deepen liquidity in the 1.5 trillion dollar government debt market and reduce borrowing costs for infrastructure spending.
Global index providers already include Indian bonds in emerging-market benchmarks; zero tax treatment removes a friction that had steered some funds toward competing issuers.
Bankers reported early interest from sovereign wealth funds and pension managers in long-duration gilt positions previously hampered by layered tax paperwork.
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Sources:
https://www.business-standard.com/economy