PHDCCI chief says tax relief can keep foreign capital in India

what happened

Anil Gupta, the newly appointed president of the industry chamber PHDCCI, said that cutting the capital gains tax would help keep foreign portfolio investors (FPIs) in India as US bond yields rise. He said US yields of 5.5 to 6 percent are unprecedented, driven by high US inflation and the Federal Reserve's refusal to cut rates. The information is reported by Moody's.

According to data from Central Depository Services Ltd (CDSL), FPIs turned buyers at the end of October but still withdrew ₹34,843 crore from Indian equities over the month. It was the second straight month of heavy outflows, bringing the 2026 total to ₹2.95 lakh crore. Investors cite elevated crude prices, global interest rates and the corporate earnings outlook.

Gupta said the chamber has asked the Central Board of Direct Taxes to review the capital gains tax, but no response has been received yet. He also called for more support for MSMEs and the farm sector, and linked high inflation to expensive oil and gas.

why it matters

Two factors matter for markets: US bond yields remain high, and tax uncertainty in India adds pressure on capital inflows into local stocks. No government decision has been announced, so the final effect is unclear.

market impact

Indian stocks: ongoing FPI outflows weigh on the market

• ▼Indian stocks pressure down — second straight month of FPI outflows weakens demand for shares

instruments