Big Tax Relief For FIIs! India's New Plan To Attract Global Capital

India may be preparing a major tax sweetener for foreign investors. The government is reportedly considering scrapping or sharply reducing capital gains tax on certain government securities (G-Secs) held by foreign institutional investors. Along with possible cuts in withholding tax on bond interest, the move is aimed at attracting fresh global capital, supporting the rupee, and strengthening foreign participation in India's bond market. As US bond yields remain elevated, emerging markets are competing aggressively for overseas money. Could this be India's biggest step yet to bring foreign investors back? In this reel, we break down what the proposed tax changes mean, why they matter for FIIs, and how they could impact the rupee, bond market sentiment, and broader capital flows into India.