India, June 7 -- India's package of foreign investment reforms announced on Friday will provide capital account stability, strengthen the rupee, and improve liquidity and price discovery in the G-Sec market, people aware of the matter said on Saturday.

The Union finance ministry announced a series of measures to widen investment options for foreign individuals and portfolio investors in Indian equities and made government bonds more attractive with tax concessions, while the Reserve Bank of India took monetary measures including hedging cost subvention for external commercial borrowings to boost foreign exchange inflows and support the rupee.

The outcome of the coordination between the finance ministry and the RBI, and their nimbleness ...