Foreign ownership of Indian equities fell significantly, as noted by veteran investor Akash Prakash, indicating a shift in global investor sentiment.
Prakash pointed to India’s capital gains tax as a deterrent for long‑term investors, claiming it erodes returns and pushes funds toward underweight status. Ajit Dayal of Quantum Advisors echoed the sentiment, adding currency depreciation as a compounding factor.
Finance Minister Nirmala Sitharaman acknowledged the debate, stating that the government is reviewing the long‑term capital gains regime. No tax changes have been announced, but the possibility of a pre‑budget announcement remains.
The outcome of any policy shift could alter foreign inflows; investors are awaiting clearer guidance before committing larger positions.