Foreign Portfolio Investment in Indian debt markets

3 entries over 18 days, from 30 June 2026 to 17 July 2026.

01
30 June

FPI debt investment record

In June 2026, Foreign Institutional Investors (FII) recorded a record inflow of ₹53,363 crore into Indian debt securities.
This debt inflow offset a near-equal outflow from Indian equities, resulting in a net total inflow of ₹334 crore.
Equity outflows have persisted for four consecutive months, totaling ₹51,456 crore in June 2026 and ₹2.76 lakh crore over the last six months.
Debt investment categories include General Limit, Voluntary Retention Route (VRR), and Fully Accessible Route (FAR).
In June 2026, General Limit inflows reached ₹28,196 crore, while FAR inflows reached ₹21,788 crore.
The Ministry of Finance recently exempted government securities from long-term capital gains tax and increased the tenors of bonds in the FAR category to deepen bond markets.
Current foreign investor behavior is characterized by equity aversion due to high valuations and rupee depreciation.

02
7 July

Foreign Portfolio Investment (FPI) in Indian bond markets reached a record ₹55,518 crore in June 2026.
The Centre waived Long Term Capital Gains (LTCG) tax on foreign investment in bonds to attract long-term institutional investors.
The Fully Accessible Route (FAR) was expanded to include 15-year, 30-year, and 40-year Government Securities and Sovereign Green Bonds.
FPI inflows into debt securities in June 2026 offset a significant equity outflow of ₹49,340 crore.
FAR recorded an inflow of ₹21,652 crore in June 2026, the highest since its introduction in September 2024.
Experts suggest that while tax incentives act as a catalyst, core macroeconomic fundamentals, policy consistency, and external conditions remain the primary drivers of capital flows.
Factors supporting recent bond market sentiment include easing geopolitical tensions in the Strait of Hormuz and potential inclusion in the Bloomberg Global Aggregate Bond Index.
The Ministry of Finance states that these reforms aim to strengthen financial market resilience and boost foreign exchange inflows.

03
17 July

The Government has listed a Bill for the Monsoon Session of Parliament to replace an Ordinance issued in June.
The Ordinance provides tax exemptions to Foreign Institutional Investors (FIIs) and the Bank of International Settlements (BIS).
The exemption covers capital gains tax arising from the sale, exchange, or transfer of government securities.
The exemption also covers tax on interest earned from investments in government securities.
The objective is to provide legislative backing to the fiscal measures introduced via the Ordinance.

Newest first. A story that ran for 18 days is exactly the kind the mains paper asks about as one question.

Examine the role of fiscal incentives in attracting foreign capital into the Indian government securities market. How does the legislative replacement of ordinances ensure greater transparency and stability in the investment climate? 150 words · 17 July
Analyze the role of the Fully Accessible Route (FAR) in deepening India's debt market and its impact on attracting long-term institutional investors. 150 words · 7 July
To what extent can fiscal policy measures, such as the waiver of capital gains tax on bonds, influence foreign capital inflows compared to macroeconomic fundamentals and global geopolitical stability? 250 words · 7 July
Analyze the recent trends in Foreign Portfolio Investment (FPI) in India, specifically the shift from equity to debt markets. How do government policy interventions, such as changes in capital gains taxation and bond tenors, influence these capital flows? 150 words · 30 June
The stability of the Indian capital market is increasingly influenced by the diversification of foreign investment instruments. Discuss the significance of the Fully Accessible Route (FAR) and other debt investment mechanisms in deepening the Indian bond market and mitigating the impact of equity market volatility. 250 words · 30 June

250words.in · https://250words.in/stories/foreign-portfolio-investment-in-indian-debt-markets