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Why Foreign Investors Are Pulling Money Out of India According to Neelkanth Mishra
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CNBC TV18•19-10-2026, 17:29
Why Foreign Investors Are Pulling Money Out of India According to Neelkanth Mishra
- •Rising US bond yields are reducing India's appeal to foreign investors by narrowing the return advantage between the two countries.
- •World Bank official Neelkanth Mishra states that complex regulations, paperwork, and administrative overhead are bigger hurdles than taxes.
- •Cutting taxes alone will not bring foreign money back; India needs to simplify investment procedures and speed up decision-making.
- •Currency-market pressure is intensifying as importers buy dollars early and exporters delay converting overseas earnings amid uncertainty.
- •India must improve its access to global investment flows, including the inclusion of Indian bonds in global indices and building better trading infrastructure.
Key Questions Answered
Rising US bond yields make emerging markets like India less attractive by narrowing the gap between returns. Additionally, complex rules, heavy paperwork, and administrative overheads add major hurdles for foreign investors.
Tax cuts do not address the primary structural challenges of investing in the country, such as complex paperwork and bureaucratic complexity. Administrative overheads and unclear regulations are considered bigger deterrents to global capital than tax rates alone.
Currency-market pressure has surged due to market participants adjusting positions amid uncertainty, such as importers buying dollars early, exporters delaying conversion of overseas earnings, and investors hedging against a weaker currency.
