A group of foreign portfolio investors (FPI) met Finance Minister Nirmala Sitharaman on Friday and raised concerns on the increase in tax surcharge which was proposed in the budget and later approved by the parliament among many other issues related with the ease of doing business in India, sources told NDTV.
FPIs had more than an hour long meeting with the finance minister and she patiently heard the concerns of the FPIs.
A senior representative of FPIs told NDTV that he was hopeful that Friday's meeting would lead to positive action on the ground. They said that Finance Bill has already been passed and the government needs time to address their concerns.
Sentiment of foreign investors took a knock after the government imposed surcharge from 15 per cent to 25 per cent on taxable income between Rs 2 crore and Rs 5 crore, and from 15 per cent to 37 per cent for income above Rs 5 crore. This hike was also applied to FPIs operating as trusts or as association of persons.
Spooked by the government's decision, the foreign investors were net sellers of shares worth Rs 12,418.73 crore in the Indian equity markets in July, data compiled by NSDL showed.
Amid continuing overseas fund outflow from the markets Ms Sitharaman had said: "I am quite open to hear them out what they (FPIs) have to say."
Meanwhile, the government will issue either a notification or an executive order that could be later submitted to parliament for approval, to exempt the foreign portfolio investors, mainly registered as trusts, from the increase in surcharge on super rich taxpayers, news agency Reuters reported on Thursday citing an unnamed government official.