The Indian government has introduced an ordinance to exempt foreign institutional investors from long-term capital gains tax on investments in government securities.
The move aims to attract long-term, patient capital as foreign investors have pulled out a massive ₹2.6 lakh crore from equities so far this year.
Foreign investors have invested over ₹17,000 crore in the debt market through the Fully Accessible Route (FAR) but withdrew about ₹4,000 crore under the general debt limit and ₹340 crore through the Voluntary Retention Route (VRR) route.
The rupee's slide to record lows has prompted authorities to step up efforts to stem its decline, with Prime Minister Narendra Modi appealing to people to conserve foreign exchange amid a surge in oil import costs.
India's forex reserves dropped USD 7.511 billion to USD 681.384 billion during the week ended May 22.
