Quick Summary
Amid growing concerns over foreign investment outflows and declining equity markets, Enam Group co-founder Vallabh Bhanshali has called on the Indian government to reconsider the long-term capital gains tax applicable to foreign institutional investors (FIIs). He believes that removing this tax could help improve India's attractiveness as an investment destination and encourage foreign capital to return to domestic markets. Speaking in an interview, Bhanshali argued that India's tax treatment o
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FAQ :
The demand stems from concerns over foreign investment outflows and declining equity markets. Abolishing the tax is seen as a way to make India more competitive in attracting foreign investment and encourage overseas funds to invest in domestic markets.
Vallabh Bhanshali, co-founder of Enam Group, is a prominent voice urging the government to scrap the long-term capital gains tax on foreign institutional investors. Mohandas Pai and other industry voices also support reviewing tax reforms to enhance India's investment competitiveness.
Indian stock markets have experienced significant volatility, with foreign portfolio investors being net sellers. In 2026, cumulative outflows have been reported at around ₹3 lakh crore, raising concerns about the country's attractiveness compared to competing investment destinations.
Potential benefits include improved investor sentiment, higher foreign capital participation in Indian equities, better market liquidity, and enhanced policy competitiveness against global investment destinations.
There has been no confirmed announcement from the government regarding scrapping or reducing the long-term capital gains tax for foreign investors. Any such change would require a formal government decision and legislative action.
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