FPIs pump record funds into G-secs after policy shift

Foreign portfolio investors pumped a record 33,000 crore into Indian government securities through the fully accessible route in June, six times the 5,512 crore invested in May. The surge follows the government's June 5 policy reforms including removal of short-term investment limits, concentration caps, security-wise limits, and the 20% withholding tax on interest earned on G-secs, along with merger of general and long-term sub-categories. Additionally, HDFC Bank raised 750 million dollars in offshore bonds, becoming the first to leverage the RBI's 1.5 percent fixed-rate swap window for external borrowings, while expectations grow for Indian securities inclusion in major global bond indices.