India has lifted the 12.5% capital gains tax on foreign institutions trading Indian sovereign debt, while the RBI opens 40‑year bonds to global investors. The move aims to pull foreign capital back into a rupee that has slipped 6% against the dollar this year.

The central bank also lifts the 10% cap on foreign ownership of Indian-listed companies, though the exact increase remains unclear. These steps come as the RBI holds rates steady at 5.25% and trims its GDP outlook to 6.6% for the current year.

The government’s policy shift follows a record $25 bn of capital outflows this year and a 24% jump in gold imports, which weigh on the currency. By easing tax burdens and extending bond maturities, India signals it will keep attracting overseas funds despite rising energy costs and supply‑chain disruptions.

Investors will watch whether the tax relief translates into higher bond volumes and a steadier rupee, as the country seeks to stabilize its currency amid Middle East‑driven oil price shocks.