Reserve Bank of India holds repo rate, launches foreign investment measures as GDP climbs to 7.7%

The Reserve Bank of India (RBI) kept its repo rate unchanged at 5.25% and announced seven policy changes aimed at attracting foreign capital. Key steps include removing the long‑term capital gains tax on foreign institutional investor (FII) purchases of government securities, adding 15‑, 30‑ and 40‑year securities to the Fully Accessible Route, lifting concentration limits for foreign portfolio investors, and allowing NRIs and OCIs to invest in listed shares without SEBI registration. The RBI also extended its concessional forex‑swap window for public sector undertakings and hedging support for banks, and shortened the export‑earnings repatriation period from 15 to 9 months.

Separately, the Ministry of Statistics reported that India’s GDP grew 7.7% in FY 2025‑26, up from 7.1% the previous year. The equity markets reacted modestly, with the Sensex slipping 0.16% and the Nifty 0.21%, while the rupee strengthened to 95.18 per dollar. The RBI is also weighing further actions, such as reviving a 2013 scheme to encourage NRI dollar deposits and eliminating withholding tax on overseas bond investors, in response to a 5.5% rupee depreciation and heightened oil‑price volatility linked to the Iran conflict. Foreign exchange reserves remain robust at about $682 billion, despite recent equity outflows.