Inside India newsletter: India weighs a tax cut to win over foreign investors. Will it work?

Foreign investors’ share of India’s equity market has fallen to a record low of 14%, prompting policymakers to consider a tax cut aimed at luring back overseas capital. The decline reflects sustained outflows and waning appetite for Indian stocks, and the proposed relief is being weighed as a way to restore foreign participation. The shift matters because foreign inflows have historically supported valuations and liquidity in Asia’s third-largest economy. What to watch next is whether the government formally announces the tax measure and whether subsequent foreign portfolio investment data show a rebound.