India exempts foreign institutional investors from capital gains tax on government‑security holdings

The Indian government announced an exemption on capital gains tax for foreign institutional investors holding government securities. The policy applies specifically to gains realized on G‑Sec investments. Officials said the move aims to boost foreign participation in the sovereign debt market. The exemption is expected to make Indian government bonds more attractive to FIIs. The decision follows consultations with market regulators and investors. Analysts anticipate increased inflows into G‑Sec portfolios as a result. The tax relief could support broader financing objectives for the treasury. Market participants will watch for the impact on bond yields and demand.