India Sees Little Need for Further Equity Capital Gains Tax Changes, Says CEA

India’s Chief Economic Adviser, V. Anantha Nageswaran, has indicated that the case for making further changes to capital gains taxes on equities is less compelling than for bonds. His comments suggest that the government currently sees limited urgency to alter the tax framework for stock market investments.

The remarks come shortly after India exempted foreign institutional investors from capital gains tax on government securities, a move aimed at attracting overseas capital. The decision follows concerns over rising foreign equity outflows, higher crude oil prices, and pressure on the Indian rupee. As one of the world’s largest oil importers, India remains highly vulnerable to prolonged disruptions in global energy markets.

Nageswaran also said the Reserve Bank of India’s growth forecast of 6.6% for fiscal year 2027 remains realistic, despite downside risks linked to geopolitical tensions and elevated oil prices. While higher fuel costs could increase inflationary pressures, he noted that fuel retailers may not need to pass on the full impact to consumers if global oil prices moderate as expected over the course of the year.

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