India is considering reducing taxes on foreign investors’ bond holdings, as policymakers review measures aimed at attracting capital inflows and improving alignment with global tax norms, according to multiple reports. Bloomberg and two Indian outlets cite people familiar with the matter saying the Reserve Bank of India (RBI) has recommended the change and that it is currently under active consideration by the Finance Ministry. The discussions reportedly accelerate amid concerns about the Indian rupee’s depreciation. The reports say the policy review is intended to help curb the rupee’s weakness by encouraging overseas demand for India’s bonds.
One report also includes market context from the day the proposal was discussed: the rupee weakens to a record low near 95.96 per U.S. dollar, and the 10-year benchmark bond yield declines slightly. The RBI did not provide immediate comment in the Economic Times report, and Bloomberg similarly notes that authorities have not publicly confirmed the details of the proposal.
