सत्याधीशसत्याधीश
SatyaDheesh
India's Ground Truth Record
Pull to refresh
VOL. I · EST. 11.2025 
SatyaDheesh
सत्याधीश
India's Ground Truth Record
LIVE

India makes big moves to attract foreign investments in bonds: How will this impact stock market?

GS3Economy · S&T · Environment · Security· Capital markets & SEBI· Prelims + Mains·

Why in news

The RBI Governor Sanjay Malhotra announced measures to attract foreign investment, including exempting FIIs from capital gains tax on government securities and expanding the Fully Accessible Route (FAR).

Background

The RBI unveiled measures to expand the Fully Accessible Route (FAR) for government bonds and increased investment limits for NRIs and OCIs in equity instruments. The government also exempted Foreign Institutional Investors (FIIs) from capital gains tax on investments in government securities.

Facts for Prelims

  • FactFIIs: Exempted from capital gains tax on investments in government securities.
  • BodyRBI: Announced expansion of the Fully Accessible Route (FAR) for government bonds.
  • FactNRIs and OCIs: Investment limits in equity instruments have been raised.
  • PostSanjay Malhotra: Governor of the Reserve Bank of India (RBI).

For Mains

Q. Examine how expanding the Fully Accessible Route (FAR) and tax exemptions for FIIs can influence India's capital market liquidity and macroeconomic stability.

Dimensions to cover in your answer

  • Monetary policy friction: Balancing hawkish RBI stance with the need for increased foreign capital inflows.
  • Market volatility: Potential for rapid capital flight or inflow affecting domestic equity and debt price stability.
  • Regulatory arbitrage: Impact of tax exemptions on the competitive landscape of Indian government securities.

Keywords: Capital Market Liquidity · Foreign Institutional Investors · Fully Accessible Route · Monetary Policy · Capital Gains Tax

Read the full news →Report a mistake in this noteSource: Economic Times ↗

More Economy notes

All Economy current affairs →

Something wrong, or something missing?

Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.

Report a mistake →Ask for something →thesatyadheesh@gmail.com

This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.