Overview
- In early June the government and the Reserve Bank removed taxes and widened foreign access to certain government bonds, with tax exemptions applied retroactively to the start of the fiscal year.
- Foreign investors bought a record amount of Indian sovereign debt in June, with NSDL reporting net debt inflows of about ₹55,518 crore and CCIL showing ₹418 billion bought through the Fully Accessible Route.
- The policy changes and purchases pushed benchmark 10‑year yields lower, with an initial roughly 14 basis point drop and around a 25 basis point fall over June, which also helped support the rupee.
- Part of June’s surge reflected mechanical reclassification after more securities were added to the Fully Accessible Route, leaving questions about how much of the inflow was new capital.
- Foreign investors kept selling equities in June (about ₹49,340 crore), and future debt flows will depend on global interest rates, oil and geopolitical developments and formal index‑inclusion decisions.