India has no plans to tax or curb capital outflows, says top adviser

India has no plans to tax or impose restrictions on capital outflows, a top finance ministry adviser said on Monday, adding the government will instead focus on liberalising fund inflows into the economy, particularly via overseas borrowing.

Foreign institutional investors (FIIs) have sold more than $2.2 billion worth of Indian shares in August, and the partially convertible rupee last Friday touched 49.90 per dollar, its weakest level since mid-May 2009.

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“I do not think we have anything to suggest to us any such thing,” Dipak Dasgupta, principal economic adviser to the ministry of finance told Reuters when asked about the possibility of India imposing curbs on capital outflows.

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“Instead of trying to restrict the outflow, it is quite the opposite. In fact, what we are trying to do, as you have seen in the ECB (external commercial borrowing) regulation changes, is actually to make it a little more comfortable yet prudent to get inflows of capital to come to India.”

Reuters