Will record FPI Indian bond flows be sustainable?

Foreign portfolio investors (FPIs) recorded a record inflow into India’s bond market in June 2026, crossing ₹55,518 crore, though analysts questioned how sustainable this momentum is.

The upbeat numbers followed several policy measures: earlier in June, the government waived long-term capital gains (LTCG) tax on foreign investment in bonds; subsequently, the RBI and government expanded the Fully Accessible Route (FAR) to include additional long-tenor government securities (15-, 30-, and 40-year) as well as sovereign green bonds.

These reforms aimed to attract long-term institutional investors such as pension funds, insurers, and sovereign wealth funds, thereby improving the stability of capital inflows.