India is preparing to unveil measures aimed at boosting foreign investment in its bond market, with people familiar with the matter saying the government will reduce taxes and eliminate ownership restrictions on certain bonds as early as this week.

The move targets international investors who have historically faced barriers when accessing Indian debt securities. By removing caps on bond ownership and cutting tax burdens, policymakers hope to make Indian bonds more attractive compared to other emerging market alternatives.

Foreign inflows into Indian bonds have lagged behind other Asian markets due to regulatory hurdles and tax complications. Reducing these friction points could unlock significant capital that has been sitting on the sidelines, potentially driving down yields and supporting the rupee against other currencies.

The timing suggests India wants to accelerate its financial market liberalization ahead of broader economic reforms. If successful, these changes could establish India as a more competitive destination for global fixed-income investors seeking exposure to one of the world's fastest-growing major economies.