India drops bond-investor tax as foreign outflows hit $27.6 billion
Why it matters: The move takes effect April 1, 2026, and aims to steady the rupee after it fell more than 6% this year.
India moved to pull foreign money back into its markets by exempting overseas investors and the Bank for International Settlements from income tax on interest and capital gains from bonds. The change, effective April 1, 2026, comes as foreign investors have sold $27.6 billion of Indian equities since January, already exceeding all of 2025. The Reserve Bank of India also widened the pool of government securities available to nonresident investors and removed limits on short-term investment, concentration and individual securities for foreign portfolio investors. The steps are designed to support capital inflows and ease pressure on the rupee, which LSEG data shows has dropped more than 6% this year amid heavy outflows and higher oil-driven import costs.