Union Finance Minister Nirmala Sitharaman flanked by MoS Finance Anurag Thakur (R) and Economic Affairs Secretary Atanu Chakraborty at a meeting in New Delhi (Photo: PTI)
Union Finance Minister Nirmala Sitharaman flanked by MoS Finance Anurag Thakur (R) and Economic Affairs Secretary Atanu Chakraborty at a meeting in New Delhi (Photo: PTI)

Nirmala Sitharaman silent on withdrawing higher taxes for foreign investors

  • Sitharaman had a meeting on Friday with 18 global investment banks to discuss the controversial tax
  • Sources said Sitharaman gave no indication that she would withdraw a proposal to raise their taxes

New Delhi: Finance Minister Nirmala Sitharaman gave no indication at a meeting with foreign portfolio investors on Friday that she would withdraw a proposal to raise their taxes, some of the investors said.

Finance Minister Nirmala Sitharaman unnerved many foreign investors with the tax increases in her proposed budget, which parliament ratified last month. Investors in turn pulled $1.8 billion out of Indian equities in July alone.

The government was considering an exemption for foreign investors from the tax increase, which would be imposed on those on those earning more than 2 crore a year, sources told Reuters on Thursday.

But at the meeting with foreign investors, Sitharaman "only heard us and did not speak," according to two foreign portfolio investors who attended the meeting.

Leading Foreign Institutional Investors (FIIs) including JP Morgan, HSBC, Barclays, Standard Chartered, Deutsche Bank and prominent Indian company representatives met Sitharaman to discuss the controversial tax on FIIs.

The delegation of FIIs included Vipul Mehta of Nomura, Vijay Karnani of Goldman Sachs, Pallav Kumar of Deutsche Bank, Amit Padhye of Standard Chartered.

Representatives from JP Morgan, HSBC, Blackrock, CLSA and Barclay were also were among the 18 Foreign Portfolio Investors (FPIs) who met the Finance Minister to raise issues such as the recently-introduced tax surcharge and seek either full rollback or suitable tweaking to keep them out of the higher tax net.

Among the 20 Indian investors at the meeting were, Uday Kotak of Kotak Mahindra Bank, Chief Executive NSE Vikram Limaye, Chief Executive BSE Ashish Chauhan and representatives of Tata Capital, Edelweiss group, Aditya Birla Sunlife.


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