The Securities and Exchange of Board of India chairman UK Sinha raised foreign investors’ concerns on retrospective taxation, saying global players need assurance about India’s tax-friendly regime. However, the market regulator who had recently returned from a visit to the US, added that foreign investors continue to remain optimistic on India’s growth prospects, when compared with other economies in the region.
“We have to be very mindful that whatever we do, it shouldn’t be a negative surprise for those who have invested in the country. Retrospective implementation of laws is something we should frown upon,” he said while speaking at the Gateway of India dialogue on Tuesday. “If there is one protection to the domestic investors, same level of protection should be available to them (foreign investors),” Sinha added.
Finance Minister Arun Jaitley has tried to assure investors on several occasions that there will be no retrospective taxation in future. However, companies such as Cairn and Vodafone are still fighting their cases in court with respect to retrospective tax notices served to them in the past.
Sinha who had met venture funds, pension funds and academicians in the US, said there was a lot of optimism among them compared to two years ago. “The investors in US are very enthusiastic about India and the policy changes. They are also very optimistic about the Indian economy,” he added. FIIs, who sold off sharply in Jan-Feb, bought shares worth over Rs 10,000 crore in April and May, recent data has indicated.