Foreign portfolio investors (FPIs) have invested ₹35,000 crore into Indian bonds in June following a tax exemption, according to thehindubusinessline.com. This influx marks a significant increase in foreign investment in the Indian debt market during the month, reflecting renewed interest after regulatory changes.
The surge in bond investments came after the government exempted certain capital gains taxes on debt securities, encouraging FPIs to increase their exposure. The tax exemption was part of broader efforts to attract foreign capital and stabilize the bond market. Market data shows that this policy change directly influenced investor behavior, leading to the ₹35,000 crore inflow in June, the report said.
This development is notable as it signals growing confidence among foreign investors in India's fixed income market. The inflow contrasts with previous months when tax policies had restrained foreign participation. Compared to equity markets, where foreign investment can be volatile, bond investments provide a more stable capital source. This trend aligns with India's ongoing efforts to deepen its bond market and diversify its investor base.
The Sensex closed at 76,506.75 points with a gain of 306.07 on the day of the report, reflecting positive market sentiment alongside the bond inflows, thehindubusinessline.com noted. The government’s tax exemption policy on debt securities remains a key factor in sustaining foreign investment momentum in the near term.