Shankar Sharma Advocates Zero Capital Gains Tax for Foreign Investors
At the Business Standard BFSI Insight Summit 2026, Shankar Sharma emphasized the need for lower taxes on fixed-income investments and a welcoming approach for foreign capital.
Shankar Sharma calls for zero capital gains tax to attract foreign investment.
He criticizes current policies that discourage investment in fixed-income instruments.
Sharma argues for a shift in focus from equity to more stable investment options.
During the Business Standard BFSI Insight Summit 2026, Shankar Sharma, founder of GQuant Investech, expressed strong views on India's investment climate, particularly regarding foreign capital. He urged the government to adopt a more welcoming stance towards foreign investments, advocating for the elimination of capital gains tax for foreign investors. Sharma's remarks came during a discussion with AK Bhattacharya, where he highlighted the need for a shift in investment strategy to ensure economic growth and stability.
Sharma's critique of the current investment landscape reflects a broader concern about the challenges faced by average investors in India. He pointed out that the complexity of equity investing often leaves the average individual ill-equipped to navigate the market successfully. Sharma noted that mutual funds, while theoretically beneficial, often fail to deliver consistent returns, especially as they grow larger and begin to mirror market performance. He emphasized that the average holding period for mutual funds in India is just 2.5 years, indicating a lack of staying power among investors.
In his analysis, Sharma also addressed the issue of financial repression, where government policies inadvertently limit investment choices for citizens. He argued that fixed-income instruments currently offer negative real rates of return, making them less attractive for investors. He suggested that the government should create financial products that provide returns above inflation, thereby encouraging savings and reducing the reliance on riskier equity markets.
The implications of Sharma's recommendations extend beyond individual investors; they touch on the broader economic landscape of India. By fostering a more favorable environment for foreign capital, Sharma believes that the country could alleviate its current account deficit and enhance economic stability. He pointed out that a more predictable income stream for investors could lead to increased consumer spending, which is vital for economic growth.
Looking ahead, Sharma's call for policy changes could reshape the investment landscape in India. He advocates for proactive measures to attract foreign capital, including global roadshows and special investment vehicles. As the government considers these recommendations, the focus will likely shift towards creating a more balanced and inclusive investment environment that prioritizes stability and growth.
