India Implements Reforms to Boost Long-Term Foreign Investment
Govt Takes Slew Of Measures To Attract Stable Long-Term Foreign Capital Flows

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The Indian Finance Ministry has introduced reforms to attract stable long-term foreign capital by simplifying investment processes for foreign investors. Key changes include increasing investment limits for Persons Resident Outside India (PROI) and enhancing access to government securities, aiming to boost foreign exchange inflows and support economic growth.
- 01The investment limit for individual Persons Resident Outside India (PROI) in Indian equities will rise from 5% to 10%, with an overall limit of 24%.
- 02The government will exempt interest and capital gains on FPI investments in government securities from income tax starting April 1, 2026.
- 03New issuances in government securities will include tenors of 15, 30, and 40 years, alongside Sovereign Green Bonds.
- 04Restrictions on short-term investments, concentration limits, and security-wise limits for FPIs in government securities will be removed.
- 05The reforms aim to enhance ease of doing business and attract long-term investors like pension funds and sovereign wealth funds.
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The Indian Finance Ministry has announced a series of measures designed to simplify and broaden foreign investment in Indian equities and government securities, aiming to attract stable long-term foreign capital flows. Finance Minister Nirmala Sitharaman revealed that individual Persons Resident Outside India (PROI) will now be allowed to invest in listed Indian companies through the Portfolio Investment Scheme, with the investment limit increasing from 5% to 10% per company and an overall limit of 24%. Additionally, the government plans to enhance participation in government securities by expanding the Fully Accessible Route to include new issuances of 15, 30, and 40-year tenors and Sovereign Green Bonds. Furthermore, the removal of restrictions on short-term investments and concentration limits for Foreign Portfolio Investors (FPIs) in government securities is expected to facilitate smoother foreign capital inflows. The reforms also include an exemption from income tax on interest and capital gains for FPIs, effective from April 1, 2026. These initiatives are aimed at reducing operational complexities and providing a seamless investment experience, thereby boosting foreign exchange inflows into the Indian economy.
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These reforms are expected to significantly enhance foreign capital inflows into India, benefiting the economy.
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