India approves tax exemption for foreign investors in government bonds, offers 15-year tax holiday
MacroRegulation
India's lower house of parliament has passed a bill exempting foreign investors from taxes on government bond investments and granting a 15-year tax holiday to foreign companies supporting electronics manufacturing. The bill, approved by the Lok Sabha on August 6, waives taxes on interest and capital gains from government securities for foreign institutional investors. It also relaxes rules to make it easier for foreign funds managed from India to receive tax exemptions on their worldwide income. The 15-year tax holiday covers foreign companies that supply machinery or equipment to contract manufacturers in India producing electronic goods such as mobile phones, laptops, and smart wearables, effective through the tax year ending March 31, 2041. These measures are part of Prime Minister Narendra Modi's strategy to attract foreign capital, ease capital outflow pressures, and support the rupee amid global economic volatility.
