A cut in equity LTCG tax could ease foreign outflows and support the rupee, says Jefferies
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Jefferies said a cut in long-term capital gains tax on equities could ease foreign outflows and support the rupee.
- ✓Foreign investors have been consistent sellers of Indian stocks, putting pressure on the currency.
- ✓The brokerage suggested three tax routes to make Indian markets more attractive and help stabilize portfolio flows.
Story at a Glance
- Category
- MARKET
- Reported By
- Moneycontrol
- Reading Speed
- 2 Minute(s)
- Market Focus
- India Economy
Foreign portfolio investors have been consistent sellers of Indian equities for much of the past year, and the resulting capital-account strain has kept the rupee under pressure. Herein, Jefferies argues that a reduction in the long-term capital gains tax on equities could meaningfully improve foreign investor sentiment and help stabilise portfolio flows.
The brokerage noted the substantial equity-related exits by foreign portfolio investors, foreign promoters and private equity funds. These outflows have contributed to the weakness in India’s capital account, leaving the currency more vulnerable at a time when global interest-rate differentials and competing investment destinations already make Indian markets less compelling for overseas capital.
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