On May 14, shares of PNB Gilts experienced a significant rally, climbing 19.9% to reach ₹83, following reports that the Indian government may consider lowering taxes on government and corporate bonds for foreign investors. This recommendation from the Reserve Bank of India (RBI) aims to enhance the attractiveness of Indian markets, which have been under pressure due to a depreciating rupee and rising import costs. Currently, foreign investors face higher tax rates on interest earned from Indian bonds compared to other global markets, which has led to a shift towards safer alternatives like US Treasury yields. The RBI's proposal is seen as a strategic move to attract foreign capital, especially as foreign portfolio investors have withdrawn substantial amounts from Indian markets this year. If implemented, this tax reduction could lower government borrowing costs by increasing demand for bonds, thereby reducing yields and improving financing conditions for both the government and corporations. Additionally, increased foreign inflows may provide support for the rupee, which has fallen significantly in value recently.