India’s finance minister says the government will hear investor arguments on LTCG and securities transaction tax reforms, without signalling whether either levy will change.
India’s finance minister has signalled that the government is willing to hear arguments for scrapping long-term capital gains tax during the run-up to the next Union Budget, as investors continue to question the country’s equity tax regime. Speaking at the Bloomberg New Economy Forum in New Delhi, Nirmala Sitharaman said the debate is already under way among domestic and international investors, and that the government is prepared to listen to those views as part of its budget consultations.
According to LiveMint and Business Standard, Sitharaman also said the discussion extends beyond LTCG to the securities transaction tax, or STT, and to whether different asset classes should be treated more evenly. She described the debate as healthy for the market, though the reports noted that she stopped short of indicating whether any change is likely.
The issue has been a recurring one since LTCG tax was brought back in 2018, and investors have periodically argued that it discourages long-term participation in Indian equities. LiveMint reported that some market participants and analysts remain sceptical that the government is ready to move, given the possible impact on revenue, even if the finance minister has opened the door to consultations.
Sitharaman also used the forum to highlight broader investment trends in the economy. According to the reports, she pointed to capital flowing into renewable energy and semiconductor manufacturing, saying India is moving into fields that support artificial intelligence, including chip design and packaging. She also said the country is attracting investment in data centres, transmission lines, green hydrogen and green ammonia, alongside areas such as biosimilars, pharmaceuticals and maintenance, repair and overhaul centres.
On infrastructure, Sitharaman said the National Infrastructure Pipeline has crossed $4.5 trillion, with the National Bank for Financing Infrastructure and Development and the National Investment and Infrastructure Fund helping to channel capital into projects. She also said India’s civil aviation sector is expanding by about 16%, and reiterated that the Reserve Bank of India is focused on reducing currency volatility rather than defending a fixed rupee level. The finance minister added that India’s macroeconomic fundamentals remain strong and that fiscal policy has stayed prudent.
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