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Informist, Wednesday, Jun. 3, 2026

 

MUMBAI – India doesn't need to pander to foreign investors' demands like tweaking the Securities Transaction Tax and reducing Long-Term Capital Gains tax, but has to find a way for the economy to not be swayed dramatically by what is happening in the world, Anuj Girotra, lead portfolio manager for India, Norges Bank Investment Management, said Wednesday. "We don't have to be sitting here either pandering to foreign investors or saying we'll make life difficult for you when you want to go. Come when you want to because the fundamentals are attractive. Go when you find fundamentals attractive elsewhere," he said at the Citi India Conference 2026.

 

"Saying things like, let's unwind your arbitrage positions retrospectively. Or the currency should not move beyond this particular number, otherwise we will intervene. Or if a brokerage house has issued a report saying oil prices need to go up by so much they have a malicious intent. We don't need to say that because it just points to an environment that a lot of us grew up in where India was generally capital-starved. And hence we were insecure," he said.

 

A lot of domestic and foreign investors will get comfortable deploying more capital into companies once the government and regulator ensures good quality governance standards and the macro economy is fixed to the extent possible, he said. "Let's show the confidence that this economy warrants and say it's fine. You want to go, please go. You want to come in, we will welcome you. But to say, oh, I'm going to reduce my long term capital gains tax. I keep hearing that over the last three, four days and I'm amazed why. Because it kind of to me points of desperation. Why should we be desperate?" Girotra said. "As an Indian economy and regulator, we should just say, I will fix my macro to the extent I can."

 

"Let us not throw weird carrots that, I'll tweak the Securities Transaction Tax...Oh, sovereign funds might get tax exemption. And suddenly, the sovereign funds are supposed to get excited and say, let me change my business plan for India," he added.

 

His comments come against the backdrop of reports saying the government might cut taxes paid by foreign investors and remove limitations on ownership of some bonds to attract foreign bond buyers. Norges, which manages a corpus of over $25 billion, has no intent of pulling out a single dollar from India, Girotra said. "We were $25 billion, give or take, last year. We are there as well now, currency adjusted."

 

Julia Raiskin, chief executive officer for Asia-Pacific at Millennium Management, said the Securities and Exchange Board of India has been directionally very clear on listening to foreign investors and easing accessibility to Indian markets, attracting investment. "There have been a number of reforms. For instance, the safe harbor reforms in the income tax code...there has actually been a lot of regulation that is quite helpful, even from a tax perspective," she said. Raiskin added that "broadly, the regulatory framework is getting easier, although maybe not as fast as we like."

 

Moreover, Girotra raised concerns about liquidity in India being "a very big constraint". "The amount of time and the cost it takes us to do simple trades is just something that's not very helpful...the problem is most people around here are looking at those few companies, and hence the valuations go where they are, and the domestic flows keep those valuations where they are," he said.

 

HDFC Asset Management Co. Ltd. Mananging Director and Chief Executive Officer Navneet Munot said liquidity is work in process. "I think the trend of more domestic capital coming into equity markets in India through mutual funds is phenomenal. It's really good for overall comfort that a foreign investor may have with the market, and I think the more comfort you have, the more capital you are willing to deploy," he said.

 

Munot also said though India seems to have missed the bus on artificial intelligence, innovation still exists. "We don't have the models. It's too late now, I think, to start building frontier models. We missed the bus on artificial intelligence hardware. We missed the bus on infrastructure. We missed the bus on models. But can we be the first to adopt AI? Right. And if we do that, then that huge value will be created here much more than what we are seeing today," he said.

 

Girotra and Temasek Holdings' India head Vishesh Shrivastav also advocated for a more "glass half-full" approach when it came to the country's exposure to artificial intelligence. India's stock markets have fallen out of favour with foreign investors, allured by a boom in companies linked to the artificial intelligence sector in South Korea and Taiwan. While India missed the bus on both hardware and software development in the new technology, it might well skip ahead and be among the first and best adopters of artificial intelligence, Shrivastav said.

 

Investors should not exert pressure on companies to unduly show exposure to artificial intelligence but Indian corporates should also increase their use of the new technology while seeking innovation in products, Norges Bank's Girotra said. Speaking earlier in the day, State Bank of India Chairman C.S. Setty had also said that India would be among the quickest in the world to adopt the use of artificial intelligence.  End

 

US$1 = INR 95.71

 

Reported by Aaryan Khanna and Sagar Sen

Edited by Avishek Dutta

 

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