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Informist, Monday, Jun. 15, 2026

 

--Sitharaman: Imports of raw materials under severe strain 
--CONTEXT: Minister Sitharaman speaking at Mindmine Summit in Delhi 
--Sitharaman: Want more foreign capital to come in 
--Sitharaman: Have taken calibrated approach to ensure foreign investment

 

NEW DELHI – The government recognises the need for more foreign capital to flow into the country and has taken calibrated measures to ensure that, Finance Minister Nirmala Sitharaman said Monday. "I think the withholding tax treatment which we have offered will be the first step towards drawing foreign capital back, although at the moment, it's confined to bond market. But certainly that is not the end of the story, there will be more. We recognise we need more foreign capital to come in," she said at Mindmine Summit 2026.

 

Earlier this month, the government waived taxes levied on foreign investors' capital gains from government securities as well as the withholding tax paid on their interest income. The government also expanded the Fully Accessible Route of index-eligible securities by adding new issuances of 15-, 30-, and 40-year government bonds to the list. It also removed all limits pertaining to investment into government bonds under the General Route except for the 6% overall cap on the holding of a certain bond.

 

The Reserve Bank of India announced a facility to cover the full hedging costs for banks raising fresh three- to five-year FCNR(B) deposits till Sept. 30. Previously, this mechanism was used in 2013, when the RBI had announced an FCNR deposit window to attract inflows. During the 2013 programme, the RBI had capped hedging support at 3.5%.

 

"As a result, the banks can now go unfettered, to raise their own returns. So we have taken a very calibrated approach to make sure that the markets do see the required investment," Sitharaman said.

 

Sitharaman said there is a need to be prepared for exigencies arising out of the current global situation. "One week you have a challenge, the next week that challenge is addressed, but newer challenges come up," she said.

 

She also said the economy is facing "severe strain" from import of key raw materials, crude oil, and fertilisers, as prices are fluctuating rapidly. "So price is a challenge, foreign exchange reserves will have to be adequately kept to meet growing demands. And growing demand is good because a growing economy requires these critical inputs," Sitharaman said.  End

 

US$1 = INR 94.64

 

Reported by Sagar Sen

Edited by Avishek Dutta

 

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