Indias markets regulator supports the elimination of long-term capital gains tax for foreign investors, sources indicate.

Indias markets regulator is reportedly in favor of eliminating the long-term capital gains tax for foreign investors, according to sources familiar with the matter. This potential move comes as part of broader efforts to attract more foreign investment into the country, which has been a focal point for the Indian government in recent years.

The long-term capital gains tax, which currently applies to profits made from the sale of assets held for over a year, has been a point of contention among investors. The tax is set at 10% for gains exceeding ₹1 lakh (approximately $1,200) in a financial year. By removing this tax for foreign investors, the regulator aims to create a more favorable investment climate, encouraging more capital inflow into the Indian markets.

Sources indicate that discussions around this proposal have gained momentum, reflecting the governments commitment to enhancing the ease of doing business in India. The removal of the tax could significantly boost foreign direct investment (FDI) and portfolio investment, which are crucial for the countrys economic growth.

The Indian government has been actively seeking to improve its investment landscape, especially in light of global economic uncertainties. By potentially scrapping the long-term capital gains tax for foreign investors, India hopes to position itself as a more attractive destination for international capital.

While the proposal is still under consideration, it has garnered positive reactions from various stakeholders in the financial sector. Many believe that such a move could lead to increased market participation from foreign entities, ultimately benefiting the Indian economy.

As the discussions progress, it remains to be seen how this potential change will be implemented and what impact it will have on both foreign investors and the Indian market as a whole. The markets regulators backing of this proposal could signal a significant shift in Indias approach to foreign investment, aligning with the governments broader economic objectives.