The Indian government is preparing to take additional steps to attract foreign investment as it seeks to strengthen capital inflows and support economic growth. Finance Minister Nirmala Sitharaman on Monday indicated that recent policy measures are only the beginning of a broader strategy aimed at bringing more global capital into the country.

Speaking at the Hero MindMine Summit 2026, Sitharaman said the government remains committed to making India an attractive destination for foreign investors. She noted that recent incentives, including tax exemptions on interest income and capital gains earned by foreign investors from government securities, are part of a larger effort to encourage overseas investment.

“We need more foreign capital, and further measures will be taken in that direction,” she said.

RBI Measures to Boost Foreign Capital Inflows

To support the government's objective, the Reserve Bank of India (RBI) has introduced several initiatives aimed at easing foreign currency inflows.

Earlier this month, the RBI allowed banks to use its currency swap facility for foreign currency non-resident (bank) deposits with maturities ranging from three to five years. This mechanism enables banks to exchange US dollar deposits with the central bank while reducing exposure to currency fluctuations.

Additionally, the RBI has introduced a concessional foreign currency swap facility for public sector companies raising External Commercial Borrowings (ECBs). The facility, available until September 30, is designed to encourage overseas borrowing by reducing currency-related risks.

According to Sitharaman, these measures allow banks and companies to mobilize foreign resources more efficiently while the RBI absorbs part of the currency risk.

Global Challenges Demand Preparedness

The Finance Minister also highlighted the challenges facing the Indian economy, including rising import costs for crude oil, fertilizers, and essential raw materials. She emphasized that global economic conditions continue to evolve rapidly, creating new risks and uncertainties.

Given the changing international environment, she stressed the need for India to remain prepared and resilient in the face of economic shocks.

Current Foreign Investment Scenario

The government's renewed focus on attracting foreign capital comes at a time when foreign portfolio investors (FPIs) have been pulling money out of Indian equities.

Concerns over geopolitical tensions, slowing global growth, and pressure on the rupee have led to significant outflows from the stock market. In the first half of June alone, foreign investors reportedly withdrew more than ₹62,000 crore from Indian equities.

With these latest withdrawals, total FPI outflows in 2026 have reached approximately ₹2.87 lakh crore, significantly higher than the ₹1.66 lakh crore withdrawn during the whole of 2025.

Focus on Long-Term Investment Growth

Despite recent outflows, the government remains optimistic about India's long-term investment potential. Policymakers believe that continued reforms, a stable macroeconomic environment, and targeted incentives can help restore investor confidence and attract fresh foreign capital.

As India positions itself as a major global investment destination, upcoming policy measures are expected to focus on improving ease of investment, strengthening financial markets, and creating a more attractive environment for international investors.