Quick Summary
Overview The Ministry of Finance has announced a series of reforms designed to deepen the Government Securities (G-Sec) market and facilitate greater participation by Foreign Portfolio Investors (FPIs) and individual Persons Resident Outside India (PROIs). The measures, announced on June 5, 2026, seek to simplify investment procedures, improve market accessibility, and encourage long-term foreign capital inflows into India's equity and debt markets. Official copy of the Press Release is as
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FAQ :
FPI investments in G-Secs are now exempt from income tax on any interest or capital gains earned.
The exemption is applicable from April 1, 2026, meaning it covers interest or capital gains arising on or after this date.
The reforms aim to deepen the G-Sec market, simplify investment procedures, improve market accessibility, and attract stable, long-term foreign capital.
Yes, restrictions such as short-term investment limits, concentration limits, and security-wise limits have been removed for FPI investments under the General Route, while retaining overall quantitative limits.
The Bank for International Settlements (BIS) also receives a similar income tax exemption for any interest or capital gains from its G-Sec investments.
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