Business · India Bureau
Scrap capital gains tax for foreign investors, Edelweiss chief urges
Edelweiss Financial Services Chairman Rashesh Shah has called for the elimination of capital gains tax on foreign portfolio investors, arguing the measure could reverse recent outflows and stabilise the Indian rupee.
LSN India ·
Rashesh Shah, chairman of Edelweiss Financial Services, has advocated for removing capital gains taxation on foreign portfolio investors (FPIs) as a means to counter recent market headwinds affecting India's equity markets and currency.
The proposal comes amid significant selling pressure from overseas investors in Indian markets, which has weighed on both equity valuations and the rupee's performance. Shah's recommendation focuses on the tax treatment of investment returns as a potential lever to restore confidence and attract renewed inflows.
Removing the tax burden on FPI capital gains could make India's equity markets more competitive relative to other emerging markets and regional investment destinations. Proponents of such measures argue that lower tax friction encourages foreign capital to remain invested in Indian securities, supporting both market stability and currency strength.
The suggestion reflects broader concerns among market participants about India's attractiveness as an investment destination. Foreign portfolio flows have historically played a crucial role in supporting domestic equity markets and the rupee during periods of global volatility.
The proposal now enters wider policy discussions as Indian authorities grapple with balancing revenue imperatives against the need to maintain robust foreign investor participation in domestic capital markets.