June accounted for nearly 58 per cent of the total FPI inflows via FAR in 2026
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Foreign portfolio Investor (FPI) inflows into government securities (G-Secs) under the fully accessible route (FAR) saw a sharp resurgence in June 2026, making it the best month of the calendar year so far.
FPIs invested around $2.2 billion in June (up to June 25), a substantial rise compared to $0.46 billion in May and weak or negative flows seen earlier in the year, including -$1.25 billion in March and -$0.01 billion in April. This surge has taken total FPI inflows via FAR to $3.81 billion in 2026 so far.
Notably, June accounted for nearly 58 per cent of the total FPI inflows via FAR in 2026, underlining the scale of the turnaround in investor sentiment. The June inflow is also the highest in the past 15 months, with the last comparable peak seen in March 2025, when FPIs invested $3.34 billion in a single month.
Policy push
The surge in flows coincided with significant policy measures announced on June 5, including exemption of interest and capital gains tax on FPI investments in G-Secs made on or after April 1, 2026. Additionally, the government expanded the pool of FAR-eligible securities to include longer-duration bonds such as 15-year, 30-year and 40-year tenors, along with Sovereign Green Bonds. These changes have made the Indian bond market more accessible and attractive to global investors. Market talk also pointed to large institutional participation, with a major foreign investor reportedly deploying about $1 billion into G-Secs of uo to 10-year tenor during the month.
Venkatakrishnan Srinivasan, Founder & Managing Partner, Rockfort Fincap LLP, observed that the FAR route has seen a sharp pickup after the recent policy changes. “These measures have materially improved the post-tax attractiveness of Indian Government Securities and have removed a key impediment for long-term foreign investors,” he said, adding that future inflows will depend on India’s ability to offer competitive risk-adjusted returns.
Echoing similar senitments, K Arvind, Head-Treasury, Tamilnad Mercantile Bank, said, “The market has been further opened under FAR, with easier access and tax removal acting as key positives.”
Srinivasan added that with elevated US Treasury yields, investment decisions are no longer driven solely by yield arbitrage, but by India’s macro stability, policy consistency, market access and post-tax returns, which should support steady FAR inflows over the medium term.
Published on June 28, 2026
