Indian Equities Rally as Policy Shifts Unlock Foreign Capital

The momentum stems from the June 5 regulatory overhaul, which scrapped the 12.5 percent long-term capital gains tax and the 20 percent withholding tax on interest income. Banking and market expert Ajay Bagga noted that these changes effectively remove the primary friction points that previously stifled foreign debt inflows. By simplifying the tax structure, New Delhi is actively positioning its financial markets to capture a larger share of global liquidity.

Global tailwinds, including evolving geopolitical dynamics between the United States and Iran, have further emboldened trade desks despite lingering concerns over domestic inflationary pressures. Analysts anticipate that the influx of foreign capital will provide a critical buffer for the economy, helping stabilize the nation’s financial outlook even as global markets react to shifting international trade relations.