Revitalizing Capital Formation: The Impact of US Trade Deals

Sebi Chairman Tuhin Kanta Pandey highlights how trade deals, like those with the US, remove uncertainties, boosting capital formation. He stresses the necessity for growth in bond markets, noting the potential of more public issuances and issuer diversity. Industry leaders propose new mandates to enhance the corporate bond market.

Sebi Chairman Tuhin Kanta Pandey emphasized the removal of trade frictions through agreements with the US, noting that such developments eliminate uncertainties and effectively accelerate capital formation. Pandey responded optimistically to inquiries about the impact of US trade deals on attracting foreign investments to India, highlighting the positive influence on investment decisions.

Speaking at a conference organized by the capital markets regulator Sebi, Pandey remained neutral on discussions regarding increased securities transaction tax on derivatives trades. He affirmed that the existing framework would persist, dismissing speculations about any regulatory changes, including those concerning the weekly expiry system.

Pandey underscored the pressing need to advance bond markets, lamenting the higher public awareness of cryptocurrency compared to bonds. He called for collaboration among stakeholders to achieve a more substantial corporate bond market, supported by proposed mandates for public issues and tax incentives to motivate issuers.

(With inputs from agencies.)