Tax cut opens Indian bonds but lenders remain sceptical
Indian infrastructure firms will raise as much as $3bn in the global bond market by the end of the year, taking advantage of a big cut in withholding tax on their overseas debt last week. But while the tax cut will increase the flow of business to bond desks, loans bankers do not think they will be so lucky.
Indias Ministry of Finance announced last Friday (September 21) that Indian infrastructure companies now needed to pay only 5% withholding tax on their foreign debt, a big cut from the 20% they previously had to stump up.
Power producer National Thermal Power Corp (NTPC) quickly took advantage of
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