ASSOCHAM advocates for tax simplification to boost foreign investment

Industry body ASSOCHAM has called for tax simplification and long-term holding incentives to strengthen capital flows in India. The organization welcomed recent coordinated measures by the Reserve Bank of India (RBI) and the Finance Ministry to address currency volatility and improve investor confidence.

ASSOCHAM specifically highlighted the Income-tax Amendment Ordinance, 2026, which exempts foreign portfolio investments (FPI) in government securities from tax on interest and capital gains starting April 1, 2026. Secretary General Saurabh Sanyal stated this move is intended to attract stable, long-term capital from sovereign wealth funds, pension funds, and insurance companies.

While ASSOCHAM praised the RBI's proactive package—including a special dollar window for oil marketing companies and tighter foreign exchange derivative norms—which helped the rupee recover nearly 2 percent, analysts remain divided. Brokerage firm Bernstein cautioned that tax concessions alone may not be sufficient to ensure sustained foreign fund inflows.