India considers bond tax relief for foreigners

India is considering a major cut in taxes imposed on foreign investors holding government bonds, as authorities look to align the country’s investment policies with global standards and attract stronger capital inflows, according to a Bloomberg News report on Thursday.
The proposal, reportedly recommended by the Reserve Bank of India (RBI), is being seriously evaluated by the Finance Ministry as policymakers seek to support the rupee and improve foreign participation in the debt market.
The report cited sources familiar with the discussions, while the RBI did not immediately respond to requests for comment.
The Indian rupee weakened to a record low of 95.9575 against the U.S. dollar during Thursday’s trading session before recovering slightly to 95.7150.
Meanwhile, India’s benchmark 10-year government bond yield fell by 2 basis points to 7.03% following the Bloomberg report, reflecting expectations that lower taxes could boost foreign investment demand for local bonds. ـــReuters