Are SIPs And LTCG Tax Driving FIIs Away From India? Expert Explains The Real Reasons Behind Outflows

Are SIPs And LTCG Tax Driving FIIs Away From India? Expert Explains The Real Reasons Behind Outflows

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Shailendra Bhatnagar
  • Updated Oct 27, 2026 4:54 PM IST

Foreign investor selling has sparked debate over whether long-term capital gains (LTCG) tax and domestic mutual fund SIPs are contributing to FII outflows. However, global factors, AI-driven investment opportunities and market valuations also influence foreign investment decisions. Mihir Vora, CIO, TRUST Mutual Fund, explains why taxes are only one part of the broader picture and why India's long-term growth prospects remain important for investors. He also discusses the potential benefits of simplifying KYC requirements, reducing tax friction and improving the ease of doing business for foreign investors. With India expected to remain a major growth economy, can structural investment flows continue despite near-term selling pressure?

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