Govt To Roll Out More Measures To Attract Foreign Investment: FM Sitharaman

New Delhi, Jun 15 (KNN) Finance Minister Nirmala Sitharaman on Monday described the recent measures by the government and the Reserve Bank of India (RBI) to boost foreign fund inflows as a "first step," signalling that additional steps are in the pipeline. 

She also flagged that India's economy is under "severe strain" from its dependence on imports of crude oil, fertilisers and key raw materials amid the ongoing West Asia crisis.

Speaking at the Mindmine Summit 2026, Sitharaman emphasised that the analysis by the RBI and the government has shown that the bond market can serve as an effective channel for attracting foreign investment, PTI reported.

Steps Taken So Far

On June 5, the government expanded the list of securities eligible under the Fully Accessible Route (FAR) to include new issuances in Government Securities (G-Secs), with the aim of reducing compliance burden for foreign investors. 

Foreign portfolio investors were also granted income tax exemptions on interest income and capital gains from investments in G-Secs.

On the same day, the RBI permitted banks to access its swap facility for Foreign Currency Non-Resident (FCNR(B)) deposits with maturities of three to five years, available until September 30. 

The central bank also introduced a forex swap window for public sector enterprises raising External Commercial Borrowings (ECBs) until September 30. 

Under this framework, Sitharaman said the cost of currency hedging will be borne by the RBI. "As a result, the banks can now go unfettered, to raise their own funds. So we have taken a very calibrated approach to make sure that the markets do see the required investments," she added.

More Measures Expected

"Although at the moment it's confined to the bond market, certainly that's not the end of the story. There will be more. We recognise, we need more foreign capital to come in," the finance minister stated, indicating that further measures to boost FDI are being considered to strengthen foreign exchange reserves and support the rupee.

India's foreign exchange reserves declined by USD 711 million to USD 681.61 billion in the week ended June 5.

(KNN Bureau)