Mumbai: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Wednesday said the India–US trade deal would help remove uncertainties in trade, bring more stability to the economy, and encourage higher investments into the country.
Speaking on the sidelines of the launch of an outreach programme on corporate bonds, Pandey said that when trade frictions and regulatory overhangs are cleared, capital formation improves and investment decisions pick up pace.
He added that greater predictability would also have a positive impact on the exchange rate. His remarks came in response to questions on whether the deal would help revive foreign investment inflows.
A day after the trade agreement was announced and tariffs on Indian goods were lowered, foreign portfolio investors turned net buyers in the stock market, purchasing Indian equities worth Rs 7,561 crore on Tuesday.
The SEBI chief said the market regulator’s role was to provide a simple, predictable, and frictionless system for foreign investors to move capital easily.
“SEBI has been continuously improving its processes to make investing in India easier,” he stated.
He pointed to steps such as a common contract note, simplified registration procedures, use of digital signatures, and the proposed netting of margins for foreign investors as measures aimed at improving ease of doing business.
Pandey also addressed concerns among traders about possible further tightening of rules in the derivatives market, especially after the Union Budget increased the securities transaction tax on futures and options to reduce speculation.
He clarified that SEBI is not planning any new regulatory actions in the derivatives segment at present. He said the regulator monitors the market carefully using data and other inputs, and for now, the existing framework will continue.
On the corporate bond market, Pandey said SEBI is working closely with industry participants and investors to improve the sector.
He noted that the corporate bond market faces several challenges, including heavy reliance on highly rated issuers, fundraising dominated mainly by financial institutions, widespread use of private placements that limit transparency, and low liquidity in the secondary market.
