India lost competitiveness in key markets for stocks, rupee: Govt

Tags: Stock Market
India has lost competitiveness in key international markets for stocks and rupee due to adverse tax treatment of overseas investors as also bureaucratic and procedural issues, the government said today.

The overseas market has developed into a significant competitor for India's two biggest markets - rupee and stocks, the pre-Budget Economic Survey 2013-14 said, adding that ten years ago, the global market was practically absent in both these fields.

"India has lost competitiveness in key markets," it said.

Global market for the Indian rupee stood at USD 50.58 billion, while that for Nifty (National Stock Exchange's 50 bluechip stocks) was at USD 51.8 billion.

According to the survey, the overseas market has developed into a significant competitor for Indian currency, and in equities more than half of the position is now overseas.

Moreover, active trading has developed at overseas avenues in both these markets.

The survey attributes the loss of India's competitiveness in key international markets for stocks and rupee to adverse tax treatment for overseas investors, bureaucratic and procedural issues and capital control frictions against foreign investors.

Among other hurdles are technical mistakes in rules on position limits and margins, domestic markets not open at all hours and Indian markets being less developed than some competitors.

The rise in share of overseas market is a major external impulse upon the Indian financial system. However, it has a positive impact too, the survey said.

"Global competition generates pressure on private players to become more efficient, which is a positive development," it added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Steps towards transparency in the real estate sector are long overdue

    Searching for black money in India’s real estate sector, which constitutes 11 per cent of the country’s $ 2 trillion GDP, is like searching for th

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

Reaping from the core of the earth

Geothermal energy is energy generated from inside the earth’s crust. ...

Zehra Naqvi

For the love of language

A video doing the rounds in social media these days ...

Dharmendra Khandal

‘Poop’ coffee anyone? If civets suffer, so be it

That a drink which proudly associates itself with animal poop ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture