![\"Types](\"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2026\/06\/Types-of-bonds.png\")
Why India Is Considering Cut Bond Taxes for Foreign Bond Investors<\/h2>\n
India is preparing a series of measures to attract more foreign capital as policymakers seek to support the rupee amid rising oil prices, foreign fund outflows and global economic uncertainty. The government is reportedly considering reducing or even eliminating the 20% tax on interest earned by foreign investors on Indian bonds<\/strong>, while also removing certain investment restrictions on government securities.<\/p>\n The move comes as the Indian rupee faces pressure from multiple factors, including higher oil import costs, foreign portfolio outflows and global trade uncertainties. The rupee has fallen more than 5% against the US dollar this year, making it one of Asia’s weaker-performing currencies. Policymakers hope that attracting more foreign money into Indian bonds will help stabilize the currency and strengthen capital inflows.<\/p>\n Read More<\/span> : Bitcoin Hits 4-Month Low as $350 Billion IPO Wave Draws Capital Away From Crypto<\/a><\/p>\n Bonds can be classified based on the issuer, currency denomination, and market of issuance. Indian investors can access both domestic and international fixed-income instruments, each offering different risk and return profiles.<\/p>\n <\/p>\n *Bond prices fluctuate daily based on interest rates, demand, credit quality and maturity.<\/p>\n The Reserve Bank of India is also expected to review the Fully Accessible Route (FAR) framework.<\/p>\n Under the proposal, certain long-term government bonds could become available to foreign investors without investment limits.<\/p>\n The move would increase overseas participation and potentially deepen India’s bond market.<\/p>\n The rupee’s decline in 2026 is being driven by a combination of domestic and global factors. While policymakers are looking to attract foreign bond investors, the currency continues to face pressure from rising oil prices, foreign fund outflows and a stronger US dollar.<\/p>\n The proposals come as authorities try to support the rupee amid multiple external challenges.<\/p>\n Foreign fund outflows, elevated oil prices, global trade uncertainty and geopolitical tensions have all weighed on the currency this year.<\/p>\n The rupee touched a record low of 96.9650 against the US dollar in May before recovering on central bank support and softer oil prices.<\/p>\n The government believes attracting more foreign investment into Indian bonds could help offset these pressures. Higher foreign inflows would increase demand for rupee-denominated assets, support the currency and help stabilize financial markets during a period of global uncertainty.<\/p>\n The government is also likely to expand investment opportunities for individuals living outside India.<\/p>\n Under the proposal, Persons Resident Outside India (PROIs) could be allowed to invest in listed Indian companies through the Portfolio Investment Scheme.<\/p>\n The step could bring additional foreign capital into domestic equity markets.<\/p>\n If the government proceeds with tax cuts for foreign bond investors and expands access to government securities, several sectors could benefit from higher capital inflows, increased market activity, and improved liquidity.<\/p>\n Exchange operators stand to be among the biggest beneficiaries as higher foreign participation boosts trading volumes, clearing activity, and settlement revenues.<\/p>\n Potential beneficiaries:<\/strong><\/p>\n Higher foreign investment flows typically translate into increased trading activity, benefiting brokers, investment platforms, and capital market intermediaries.<\/p>\n Potential beneficiaries:<\/strong><\/p>\n Greater foreign participation often improves overall market sentiment and can drive inflows into mutual funds, ETFs, and debt products.<\/p>\n Potential beneficiaries:<\/strong><\/p>\n Banks holding substantial government securities may benefit from stronger demand for Indian bonds, improved valuations, and enhanced treasury gains.<\/p>\n Potential beneficiaries:<\/strong><\/p>\n Improved bond market liquidity can lower borrowing costs and improve funding access for non-banking financial companies.<\/p>\n Potential beneficiaries:<\/strong><\/p>\n If implemented, the reforms could increase foreign demand for Indian bonds and improve market liquidity.<\/p>\n Higher capital inflows may also help stabilize the rupee and strengthen investor confidence.<\/p>\n For equity investors, greater foreign participation could support market sentiment in the months ahead.<\/p>\n The broader message is clear: India is looking for ways to attract global capital at a time when competition for investment flows is intensifying.<\/p>\n","protected":false},"excerpt":{"rendered":" Cut Bond Taxes India\u00a0looks to bring foreign money back into its markets With the rupee facing pressure and foreign funds leaving Indian markets, policymakers may be preparing fresh measures to attract overseas capital. The government is considering tax cuts on bond income and easier access to government securities for global investors. The proposals could be […]<\/p>\n","protected":false},"author":4,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[2738,1692,2739,2736,2737,2735,2544,1690,1681,2700],"ppma_author":[1331],"class_list":["post-27176","post","type-post","status-publish","format-standard","has-post-thumbnail","category-stock-market-news","tag-bond-tax-cut","tag-fixed-income","tag-foreign-fund-inflows","tag-foreign-investors","tag-government-bonds","tag-india-bond-market","tag-indian-economy","tag-rbi","tag-rupee","tag-sovereign-bonds"]," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/27176","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=27176"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/27176\/revisions"}],"predecessor-version":[{"id":27180,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/27176\/revisions\/27180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/27177"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=27176"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=27176"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=27176"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=27176"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Key Measures Under Consideration<\/h3>\n
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Why the Government Is Acting<\/h3>\n
![\"Types](\"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2026\/06\/Types-of-Indian-and-foreign-bonds.png\")
<\/p>\nTypes of Indian and Foreign Bonds<\/h2>\n
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\n Bond Type<\/th>\n Issuer<\/th>\n Currency<\/th>\n Typical Yield (2026)<\/th>\n Price Benchmark*<\/th>\n<\/tr>\n \n Indian Government Securities (G-Secs)<\/td>\n Government of India<\/td>\n INR<\/td>\n 7.0%\u20137.2%<\/td>\n \u20b9100 per \u20b9100 face value<\/td>\n<\/tr>\n \n Treasury Bills (T-Bills)<\/td>\n Government of India<\/td>\n INR<\/td>\n 6.0%\u20136.8%<\/td>\n Issued at discount to face value<\/td>\n<\/tr>\n \n PSU Bonds<\/td>\n Government-backed companies<\/td>\n INR<\/td>\n 7.2%\u20138.0%<\/td>\n \u20b910,000 face value<\/td>\n<\/tr>\n \n Sovereign Gold Bonds (SGBs)<\/td>\n Government of India<\/td>\n INR<\/td>\n Gold-linked + 2.5% interest<\/td>\n Linked to gold price<\/td>\n<\/tr>\n \n Corporate Bonds<\/td>\n Private companies<\/td>\n INR<\/td>\n 7.5%\u201310%+<\/td>\n Varies by issuer rating<\/td>\n<\/tr>\n \n US Treasury Bonds<\/td>\n US Government<\/td>\n USD<\/td>\n 4.4%\u20134.6%<\/td>\n $100 face value<\/td>\n<\/tr>\n \n Yankee Bonds<\/td>\n Foreign issuers in US<\/td>\n USD<\/td>\n 5.0%\u20136.5%<\/td>\n $100 face value<\/td>\n<\/tr>\n \n Eurobonds<\/td>\n Global issuers<\/td>\n USD\/EUR<\/td>\n 4.5%\u20138.0%<\/td>\n $100 or \u20ac100 face value<\/td>\n<\/tr>\n \n Samurai Bonds<\/td>\n Foreign issuers in Japan<\/td>\n JPY<\/td>\n 1.0%\u20133.5%<\/td>\n \u00a5100 face value<\/td>\n<\/tr>\n \n Masala Bonds<\/td>\n Indian issuers overseas<\/td>\n INR<\/td>\n 5.5%\u20137.5%<\/td>\n \u20b91,000 face value<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Key Difference Between Indian and Foreign Bonds<\/h3>\n
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RBI may expand access to sovereign bonds<\/h2>\n
Why the Rupee Has Come Under Pressure<\/h2>\n
Key Drivers of the Rupee’s Weakness<\/h4>\n
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Why Foreign Bond Flows Matter<\/h3>\n
Overseas investors may get wider access to Indian stocks<\/h2>\n
Which Stocks Could Benefit From India’s Bond Market Reforms?<\/h3>\n
Exchange Operators & Market Infrastructure<\/h4>\n
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Brokerage & Capital Market Firms<\/h4>\n
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Asset Management Companies (AMCs)<\/h4>\n
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Banks With Large Government Bond Portfolios<\/h4>\n
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NBFCs and Debt Market Participants<\/h4>\n
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What impact could this have on investors?<\/h2>\n