(Aug 7): India’s lower house of Parliament on Thursday approved tax cuts for foreign investors buying sovereign debt, cementing measures aimed at attracting foreign capital into Asia’s third-largest economy.

The bill, approved by voice vote despite opposition protests, replaces an ordinance issued on June 5 that exempted foreign institutional investors from tax on interest from government securities as well as capital gains from their sale, exchange or transfer.

The legislation also eases rules allowing offshore funds managed from India to qualify for tax exemptions on their global income. It also grants a 15-year tax holiday — through the tax year ending March 31, 2041 — to foreign companies supplying capital goods, equipment or tooling to India-based contract manufacturers producing electronics such as mobile phones, laptops, tablets, servers and wearables.

The measures are part of Prime Minister Narendra Modi’s broader push to attract foreign investment, stem capital outflows and support the rupee. The effort has gained urgency following the US-Iran war, as the government seeks to shield the economy from external shocks while positioning India as an alternative manufacturing base to China and creating jobs.

The bill was passed even as much of Parliament’s monsoon session, which runs through Aug 13, has been disrupted by opposition lawmakers demanding a debate on exam paper leaks and the student protests that followed.

Uploaded by Chng Shear Lane