Two sources said the Securities and Exchange Board of India (SEBI) has
recommended removing the long-term capital gains tax (LTCG) for foreign
investors to support a weak Indian equity market. SEBI also proposed an LTCG
exemption for domestic mutual fund investors who sell existing holdings and
reinvest proceeds into new assets. The proposals are non-binding and were
submitted months ahead of the February federal budget; final authority rests
with the government. Indian equities have labeled other emerging markets over the
past two years, and foreign investors have sold a record $31bn of Indian stocks
this year. SEBI held tens of meetings with foreign investors over the past two
years amid continued foreign outflows and rupee weakness, after which it
advanced the recommendations.
