New Delhi: Finance Minister Nirmala Sitharaman on Monday signalled that the Union Government is preparing additional measures to attract foreign capital into India, stressing that recent policy initiatives are only the beginning of a broader strategy to strengthen investment inflows.
Addressing the Hero Mindmine Summit 2026, Sitharaman said the decision to exempt withholding tax on interest income and capital gains tax for foreign investors in government securities marked the first step towards bringing overseas capital back into Indian markets.
She noted that:
The government recognises the need for greater foreign investment and is evaluating further initiatives to enhance India’s attractiveness as an investment destination.
Earlier this month, the Reserve Bank of India introduced a temporary swap facility for Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits with maturities of three to five years. Available until 30 September, the facility enables banks to swap US dollar deposits with the RBI, helping them manage currency-related risks more effectively.
In another move aimed at improving foreign capital inflows, authorities have also offered a concessional forex swap facility for public sector enterprises raising external commercial borrowings (ECBs) until the end of September.
According to Sitharaman, the RBI framework shifts the burden of currency hedging to the central bank, allowing commercial banks greater flexibility in mobilising overseas funds. She said the measures reflect a calibrated approach designed to ensure adequate investment flows into the economy while maintaining financial stability.
The finance minister also highlighted external challenges facing the economy, pointing to mounting pressure from imports of crude oil, fertilisers and other critical raw materials. She warned that rapidly evolving global developments continue to create new economic risks and underlined the importance of remaining prepared for unforeseen disruptions.
Sitharaman said India must stay agile and responsive as international conditions change, ensuring that the economy remains resilient in the face of emerging challenges.
(With agency inputs from PTI)