LTCG tax removal for FPIs! Will Sensex, Nifty get a lift after $64 billion outflows?
Business Today 1 hr ago·2 Nov 2026, 7:29 am
The government has removed the long-term capital gains (LTCG) tax on foreign portfolio investments (FPIs), a move aimed at stabilizing the market. This policy change reverses a steep 20% tax introduced in June, which triggered massive selling by foreign investors. The sudden reversal aims to restore confidence and encourage capital inflows into the Indian equity market.
For investors, this development is significant because FPIs manage a massive amount of capital. Their participation is crucial for market liquidity and stability. By removing the tax, the government hopes to stop the recent outflows and encourage foreign money to return. This could help stabilize the Nifty 50 and Sensex indices in the near term.
Investors should watch the net inflows of foreign funds in the coming weeks. If the tax removal successfully reverses the selling trend, it could provide a strong foundation for the market. However, the market will also remain sensitive to global economic cues and domestic economic data.
Excerpt from Business Today
JM Financial said a LTCG removal for FPIs would raise the response of flows to a rising market, not create the rise. In total, any such relief could add $3–5 billion to FY28E inflows in its bull case, it said. Sensex and Nifty were trading 1 per cent higher each in Monday's trade amid a Reuters report suggesting…Read the original at Business Today
Key takeaways
- Category: Economy.
- AI reads the tone as positive (potentially bullish) for the stock.
- Flagged as a high-impact, market-moving story.
Why it matters
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