Finance Minister Nirmala Sitharaman acknowledged calls for more support for Indian equities Monday, Nov. 2, but gave no signal of a tax cut in the 2027-28 Budget as foreign portfolio investors recorded October net outflows.
At the Financial Express Leadership Awards, Sitharaman said she would consider investor concerns. She said the government had prioritized bond-market development while equity investors called for greater policy attention. She also said India needs capital, particularly equity investment, to sustain growth, and that tax policy is one of several factors affecting foreign investment. “I recognise the voice,” she said.
Central Depository Services (India) Ltd. (CDSL) reported net equity outflows by foreign portfolio investors of ₹34,843 crore in October, compared with ₹35,861 crore in September. Its calendar-year series showed cumulative net outflows of ₹2.95 lakh crore through October 2026.
Sitharaman compared India’s tax structure with 2023-24, a period of strong foreign inflows, but said circumstances had changed and challenges had grown. “More FII outflows have happened,” she said.
The Finance Bill, 2024 memorandum records that the government changed rates for specified equity gains effective July 23, 2024. The rate on qualifying long-term listed-equity gains rose from 10% to 12.5%, while the annual exemption increased from ₹1 lakh to ₹1.25 lakh. The rate on specified short-term gains rose from 15% to 20%. The Income-tax Act, 2025 sets a 12.5% rate on qualifying long-term equity gains above ₹1.25 lakh and a 20% rate on specified short-term gains. Sitharaman did not announce a proposal to change the rates.
CNBC previously reported Sitharaman’s view that liquidity in India’s equity market makes it easier for foreign investors to exit. EconoTimes covered her earlier comments on the role of market liquidity.
The Department of Economic Affairs (DEA) has published pre-Budget materials and a schedule of meetings for the 2027-28 estimates. Its published materials do not state a date for the Budget presentation.
