Foreign institutional investors (FIIs) have sold Indian equities worth $15 billion this year on a net basis. This pushed Dalal Street towards a prolonged selloff period and a historic losing streak which took a breather only last Tuesday. The selloff wiped out over $1.3 trillion of investor wealth. There is a growing clamour among market participants for a cut in long-term capital gains (LTCG) in order to make India attractive for global funds once again. Currently, foreign investors pay 10% tax on long term gains. However, they would have to pay 12.5% tax from April 1st, 2026, at par with local investors.
