Government exempts FPIs from tax on G‑Sec gains to encourage capital inflows

The government announced a tax exemption for foreign portfolio investors (FPIs). The exemption applies to gains earned on government securities (G‑Sec). The policy aims to attract additional capital inflows. FPIs will no longer pay tax on such returns. Officials expect the move to increase foreign investment in sovereign debt. The decision was reported by Business Standard. It reflects efforts to deepen the domestic bond market. Market participants will watch the impact on demand for G‑Secs.