Why FIIs are not keen on India - A simplistic take! - An investor earns 12% in rupee-denominated returns from Indian stocks. - The rupee weakens by 3-4% over the same period. - The real return in dollar terms drops to around 8%. - Factor in India’s 12.5% to 20% capital gains tax, and the effective return drops further to around 6-7%. - In most developed markets (including U.S., UK, Japan, etc.), foreign investors are exempt from capital gains tax. - Compare that to U.S. Treasury bonds, which currently offer 5% risk-free returns. For many investors, especially those looking for stability, India’s returns no longer justify the currency risk and taxations. (Message forwarded by Broker Lobby)