Foreign money is moving out of Indian stock markets and the reasons are not associated with profits but something more basic.“Right now, with taxation and with currency against them, they don’t feel very welcome in India,” says Ajit Dayal a veteran investment manager. “Hence, there is dismay,” among them, he said in a podcast discussion with Sidharth Bhatia.According to Dayal, who has been engaging with FPIs for over 35 years, they had adjusted to the idea of the depreciation of the Indian rupee against the dollar. “But recent currency depreciation since March 2025 has accelerated way beyond this long-term average of 2.5% and 2.7%. It’s gone to over 5% annualised.” The other reason, he says, is the long-term capital gains tax. All of which makes it unattractive to invest in countries like India, especially with US bond rates inching up.He says India needs to make investing and spending here attractive. “For that, have a policy of not deliberately weakening currency, never tax a foreign investor on home soil and do away with retrospective taxation. They will pay whatever taxes they wish to from the soil where they brought the capital, not the soil where they made the money.” India needs to get tens of billions of dollars of inflows. But, he said “we are arrogant and tone deaf to the extent that we don’t recognise the changes in the world environment.”