Positive impactResults
India's FPI Problem Is Bigger Than Capital Gains Tax, Says Ridham Desai
NDTV Profit 3 hrs ago·2 Nov 2026, 10:11 am
Morgan Stanley India head Ridham Desai argues that the recent sell-off by Foreign Portfolio Investors (FPIs) is not primarily driven by the proposed increase in capital gains tax. Instead, he suggests the core issue is a lack of confidence in the domestic earnings outlook and a comparison with better returns available in other markets. Desai believes that while tax cuts are helpful, they are not the primary catalyst needed to reverse the current outflow trend.
For investors, this perspective implies that policy changes alone may not immediately stabilize the markets. The focus should shift to corporate earnings growth and the overall valuation of Indian assets relative to global peers. Until these fundamentals improve, foreign inflows are likely to remain cautious, regardless of short-term tax adjustments.
Moving forward, market participants should monitor corporate earnings reports and global risk sentiment. If Indian companies deliver strong results and valuations become attractive, it could help regain investor confidence. However, until the earnings outlook brightens, volatility is expected to persist in the broader market.
Key takeaways
- Category: Results.
- AI reads the tone as positive (potentially bullish) for the stock.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. The tone is positive — historically associated with upward pressure, though not predictive. Use the price and stock snapshot to gauge how the market is responding.
