The Centre on Friday issued the Income-tax (Amendment) Ordinance, 2026, granting Foreign Institutional Investors (FIIs) exemption from tax on interest income and capital gains earned through investments in government securities. The move is aimed at attracting stable long-term foreign capital and strengthening India’s bond market.

Since Parliament is currently not in session, the Ordinance was promulgated to amend Schedule IV of the Income-tax Act, 2025, with retrospective effect from April 1, 2026. As per the Gazette notification, the amendment introduces a new provision under the tax-exempt income category, stating that any interest earned on government securities, along with capital gains arising from their sale, transfer, or exchange by FIIs, will be exempt from tax, provided the required disclosures are submitted. The same benefit has also been extended to the Bank for International Settlements (BIS).

The measure is expected to encourage greater foreign participation in India’s sovereign debt market, particularly in long-term government bonds. Stable overseas investments in government securities can support public expenditure and investments across sectors such as infrastructure, urban development, climate transition, manufacturing, and social welfare.

Increased foreign investment is also likely to enhance liquidity and improve price discovery in the government securities market, helping make borrowing costs more efficient across the financial system. Since government bond yields act as benchmark rates for corporate borrowing, bank loans, and infrastructure financing, a stronger sovereign debt market is considered vital for overall financial-sector efficiency.

The government believes the exemption will diversify the investor base for sovereign debt, boost competition in primary auctions and secondary markets, and gradually lower borrowing costs by compressing term premia. The decision further strengthens the appeal of Indian government securities among global investors as India deepens its integration with international capital markets. It follows earlier reforms such as the Fully Accessible Route (FAR), which enabled the inclusion of Indian government bonds in major global bond indices and helped attract long-term passive foreign investments. The definition of Foreign Institutional Investor will follow the provisions of the Income-tax Act, while “government security” will carry the meaning assigned under the Government Securities Act, 2006. The exemption will apply subject to prescribed disclosure and reporting requirements.

Disclaimer: This image is taken from ANI.

A Parliamentary panel has expressed concern over sluggish private investment despite a sharp rise in government capital expenditure, calling it a major challenge for the Indian economy. Parliamentary Standing Committee on Finance Chairman Bhartruhari Mahtab on Thursday said the issue was discussed extensively during a meeting of the panel with senior government officials, including Chief Economic Advisor V. Ananth Nageswaran.

Mahtab said the committee reviewed the evolving economic situation, including inflation, growth trends, foreign investment flows and global developments affecting India. “The challenge is that while government investment and capital expenditure are increasing, private investment is not picking up at the same pace. This is something that needs to be addressed,” the Lok Sabha MP said. The panel also discussed opportunities emerging from global companies seeking to diversify manufacturing operations away from China. Mahtab said India would need policy reforms and targeted support measures to attract such investments.

“That is a concern, and certain policy changes are required. We also need to decide what kind of support should be provided to companies moving out of China to help them set up industries in India,” he said. According to Mahtab, discussions also covered China’s recent industrial protection measures, inflationary pressures, the impact of the West Asia conflict and their implications for the global economy.

Despite global headwinds, the committee noted that India’s economic outlook remains positive, supported by improving domestic indicators. “Household savings have increased compared to last year, and investment is also rising,” Mahtab said. The panel further reviewed foreign direct investment trends and raised concerns over capital outflows despite robust inflows into India.

“While India is attracting large amounts of FDI, there is also a flight of investment from the country,” he said. Quoting the Chief Economic Advisor, Mahtab said such movements are cyclical in nature, with phases of increased inflows often followed by periods of outflows. He also pointed out that developed economies, particularly the United States, are currently attracting significant global investment. Rising interest rates in countries such as Japan are also influencing capital flows, he added.

On concerns over inflation due to the West Asia conflict, Mahtab said the government had already taken several measures, including the creation of a corpus fund, to address potential economic pressures. Responding to questions on the rupee, he said the Reserve Bank of India was taking steps to stabilise the currency. The Parliamentary panel is expected to meet again in the third week of June and prepare a report outlining key economic challenges along with policy recommendations for the government.

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According to Dawn, Zubair Ghangra has criticised the Federal Board of Revenue’s withholding and advance tax policies, saying they are severely affecting Pakistan’s Fast-Moving Consumer Goods (FMCG) industry, particularly the food sector. He argued that the existing tax structure has become a significant barrier to industrial expansion and long-term business viability.

Ghangra explained that the current tax collection system is creating disruptions across the supply chain, slowing business operations and placing a heavier burden on formal enterprises. He noted that manufacturers, wholesalers and distributors are bearing most of the tax pressure because a large segment of Pakistan’s retail market remains undocumented. With thousands of retailers operating outside the formal economy, compliant businesses are carrying the majority of the tax responsibility, leading to rising operating costs while undocumented traders continue functioning with little oversight.

He further stated that the imbalance is increasing financial stress on registered companies already dealing with inflation and weak consumer demand. Excessive documentation and compliance requirements, he said, have added to the difficulties faced by FMCG and food businesses by complicating cash flow management and increasing administrative burdens, especially for companies working with slim profit margins.

Ghangra warned that these added costs are eventually transferred to consumers, contributing to higher prices and broader economic instability. He also criticised the taxation framework for discouraging formal business activity while indirectly enabling the growth of the undocumented economy. According to him, registered businesses continue to face mounting regulatory and financial pressure, whereas many unregistered traders remain outside the tax net. He urged authorities to address these structural issues by expanding the tax base and reforming the current system instead of repeatedly imposing additional burdens on documented sectors.
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Union Commerce and Industry Minister Piyush Goyal said on Monday that India is targeting $2 trillion in exports over the next five years as part of its vision for an “Atmanirbhar Bharat” (self-reliant India). He was addressing a national conclave of trade leaders at Bharat Mandapam in New Delhi, organized by the Confederation of All India Traders (CAIT), where he also launched the website for the Bharat Vyapar Mahotsav.

He expressed confidence that the upcoming Bharat Vyapar Mahotsav, scheduled to begin in 86 days at Bharat Mandapam, would serve as a platform to promote Indian-made products, encourage import substitution, and strengthen India’s position in global markets. According to him, the participation of 140 crore citizens would ensure that the country achieves its goal of becoming a developed nation.

The Bharat Vyapar Mahotsav, a Swadeshi-focused trade fair, is being organized by the India Trade Promotion Organisation (ITPO) in collaboration with CAIT and supported by various trade, logistics, and Swadeshi organizations. The event is expected to feature around a thousand businesses and emphasize quality, branding, packaging, and marketing to improve global competitiveness of Indian goods.

Goyal noted that India’s exports have already reached about $863 billion this year, marking a growth of around 5% over the previous year, and said the government has set a revised target of $1 trillion for the current year. He also highlighted ongoing negotiations for free trade agreements with 38 countries, mainly developed economies, including one with Oman expected to take effect from June 1, which would improve market access for Indian exporters.

He further emphasized reducing import dependence through domestic production, pointing to sectors like capital goods, medical devices, and value-added agriculture and fisheries, where Indian MSMEs are making progress in cities such as Rajkot, Ludhiana, Pune, and Visakhapatnam. He also mentioned that the MSME definition has been expanded to include firms with turnover up to ₹500 crore, while excluding export turnover to ensure continued benefits as they scale globally.

Goyal encouraged greater participation of women entrepreneurs and young traders, suggesting that each state should nominate 25 women entrepreneurs for the event. He also proposed installing 50–60 kiosks to promote digital payments through RuPay and UPI, describing it as a step toward a cashless and Swadeshi economy.

He described Bharat Mandapam and Yashobhoomi in Dwarka as examples of world-class infrastructure reflecting India’s capabilities and craftsmanship. He also said that government support schemes like PLI would act as initial support, but long-term success would depend on active participation from industry and trade. He concluded that India should showcase a strong model of self-reliance by the 80th Independence Day in 2027.
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Singapore’s Ministry of Trade and Industry (MTI) has kept its GDP growth forecast at 2–4%, supported by stronger-than-anticipated economic performance in the first quarter. At the same time, core inflation eased more than expected in April. Economists caution that geopolitical uncertainties and weaker external demand continue to pose risks. Susan Ng and Hairianto Diman discuss the strength of Singapore’s economy and its outlook for the coming months with Jeff Ng from Sumitomo Mitsui Banking Corporation.

Disclaimer: This podcast is taken from CNA.

In “Culture Club,” Melanie Oliveiro explores the beauty product industry through a conversation with Joyce Tirindelli, a 20-something, third-generation CEO of the Italian skincare brand World of Beauty. Tirindelli shares how she was prepared for leadership and now oversees a portfolio of over 200 products that are vegan, Halal-certified, and environmentally friendly. She also discusses the brand’s expansion strategy in Southeast Asia, a region expected to become the world’s fourth-largest economy by 2030.
Disclaimer: This podcast is taken from CNA.

As tensions rise in Iran, the global energy system is being tested like never before. Critical chokepoints such as the Strait of Hormuz, along with concentrated LNG infrastructure in hubs like Ras Laffan, highlight the inherent rigidity and vulnerability of oil and gas markets. Andrea Heng and Hairianto Diman explore what “market adjustment” looks like when long-term contracts offer little flexibility, and why Europe could once again face a challenging scramble for energy supplies. Their analysis includes insights from Pang Lu Ming, Vice President of Gas & LNG Research at Rystad Energy.

Disclaimer: This podcast is taken from CNA.

Oil prices have jumped significantly as tensions in the Middle East intensify, with concerns over potential supply disruptions pushing crude prices up by double digits. If this upward trend persists, rising energy costs could reignite inflation and affect transportation, manufacturing, and household expenses globally. Andrea Heng and Hairianto Diman examine how various countries are stockpiling oil, diversifying their supplies, and managing the impact of higher prices, including insights from Vandana Hari, Founder of Vanda Insights.

Disclaimer: This podcast is taken from CNA.