'India can't become a casino': What Shankar Sharma says on STT on futures & options

Market veteran Shankar said India cannot become a casino where high-frequency trader-type foreign institutional investors win and domestic investors permanently lose. In a post on X, Sharma said he did not understand the panic around the hike in Securities Transaction Tax (STT) on derivatives, including claims that foreign traders would exit India. He argued that foreign participants in the F&O segment add little real economic value, extracting large profits while paying minimal tax.

"India can't become a casino for  HFT type F2s to win and desis to permanently lose," the the Founder at GQuant Investech.

Sharma said such institutional players deploy only a small fraction of their profits as margin, often using scarce foreign exchange, which in turn creates systemic risks for India’s balance of payments, already under pressure.

At best, he said, this activity primarily benefits exchanges such as the NSE and BSE and brokers. “So let them go away from India," Sharma said, adding that India cannot become a casino where HFT-style foreign traders consistently win while domestic investors continue to lose. 

Sharma had earlier welcomed the government's decision to raise the STT on derivatives, calling it a key positive of the Union Budget 2026-27. Reacting to the Budget announcement, praised Finance Minister Nirmala Sitharaman for the move.

"I love this Budget for ONE major reason: hiking of STT on derivatives. Derivatives are a poison x cocaine, eating away at the roots of our youth. Its destructive effect will be felt by generations. It's a pure wealth transfer from the traders to F& O specialist brokers, who have been massive winners of this drug + gun trade. ( Not their fault). F&O adds zero value to India. It deducts inestimable value. It can't be stopped but it can be taxed the hell out of. Kudos to the Finance Minister," Sharma wrote in a post on X.