More Steps Likely to Attract Foreign Capital: Sitharaman

• Sitharaman said the government will take more steps to attract foreign capital into the Indian market

• She said recent measures on withholding tax and capital gains tax for foreign investors in G-secs are only the first step

• She said the Indian economy faces severe strain from imports of key raw materials, crude oil and fertilisers

Finance Minister Nirmala Sitharaman on Monday indicated that there will be more steps to attract foreign capital into the Indian market.

Speaking at the Hero Mindmine Summit 2026, Sitharaman said measures taken by the government to exempt withholding tax on interest and capital gains tax made by foreign investors in G-secs will be the first step towards drawing foreign capital back.

"Certainly, that's not the end of story, there will be more. We recognise we need more foreign capital to come in," Sitharaman said.

The RBI on June 5 had allowed banks to access the RBI's swap facility for Foreign Currency Non-Resident (Bank) (FCNR(B)), deposits with maturities ranging from 3-5 years till September 30. The facility would allow banks to swap US dollar deposits with the RBI, and manage currency risks.

Also, to shore up foreign capital inflows include a concessional forex swap facility to encourage PSUs to raise external commercial borrowings (ECBs) until September 30.

Sitharaman said under the framework announced by the RBI, currency hedging will be at the expense of the RBI.

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

The finance minster also said the Indian economy is facing "severe strain" from import of key raw materials, as well crude oil and fertilisers.

She said the global situation is changing almost every week with newer challenges emerging and the country has to be ready for every such "exigency".