India's Finance Minister Nirmala Sitharaman said she will consider tax changes on stocks as a prolonged equity-market slump intensifies pressure on policymakers to revive investor confidence. The debate over taxes on equity gains has grown as the market selloff deepened. Sitharaman acknowledged the "sensitivity" and "anxiety" among retail investors, noting that similar tax rates were in place when India attracted strong capital inflows in 2023 and 2024.
"I quite appreciate" the concerns being raised and "I'll consider all this," Sitharaman said at an event late Monday, without specifying whether the government was considering changes to capital gains or transaction taxes. Indian stocks are among the worst performers in Asia this year, trailing emerging-market peers by the widest margin in more than three decades. Elevated oil prices and rising global yields have added to worries about expensive valuations and weak earnings growth.
The comments come as preparations begin for India's next federal budget, typically presented in early February. Sitharaman is set to deliver her 10th consecutive budget, extending her record for the most in a row by an Indian finance minister. Long-term gains on listed equities held for more than a year are taxed at 12.5%, while short-term gains are taxed at 20%.
"The situation is very different now," Sitharaman said. "Circumstances have changed, challenges have grown, more FII outflows have happened." Foreign investors have recently started returning, she added. In October, she acknowledged a debate over transaction taxes, fueling expectations that policymakers were becoming more receptive to investor concerns. She said attracting capital was important to preserve India's economic momentum, citing sustained growth of more than 7%. "I wouldn't want to say more at this stage," Sitharaman said, "but I recognize the voice."
Source: Bloomberg Markets · Summarized by HeadlinesBriefing