As the Indian rupee continues its sharp downward spiral, industry leaders are demanding aggressive, emergency fiscal interventions to halt the slide. Taking directly to X, prominent corporate veteran and former Infosys CFO Mohandas Pai publicly urged Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to execute a radical policy pivot: a comprehensive five-year waiver on capital gains taxes for all registered FPIs on new investments.
Pai warned that the rupee is getting “hammered” due to a massive dollar drain driven by aggressive FPI selling, which in turn escalates domestic costs. He argued that a multi-year tax holiday would comprehensively stem the exodus, eliminate tax harassment, and stabilize the currency by drawing in at least $20 billion in fresh global capital.
PM @narendramodi Sir our Rupee is getting hammered in markets, depreciated, causing big issues, increasing costs. One Big problem is heavy selling by FPI’s. Huge outflow of $.
To remedy please waive capital gain taxes on New investments in markets by all registered FPI’s from… https://t.co/qcTxeCC4A0— Mohandas Pai (@TVMohandasPai) May 22, 2026
The currency had found minor technical relief in early trade on Friday, May 22, 2026, recovering 18 paise to 96.18 against the US dollar due to active Reserve Bank of India (RBI) dollar-selling operations and a brief cooling of Brent crude near the $104 per barrel mark. This respite followed remarks from US Secretary of State Marco Rubio hinting at constructive, albeit cautious, diplomatic talks over the Iran situation.
Pai’s view is heavily shared by other market stalwarts, including Helios Capital founder Samir Arora. Just before Union Budget 2026, Arora had urged the government to implement sweeping changes to the capital gains tax structure to revive foreign fund inflows into Indian equities. He had suggested nil long-term capital gains (LTCG) tax alongside reverting short-term capital gains (STCG) tax to a 10% rate, arguing that mere tweaks will not help in reviving market sentiment.
Arora had also dismissed minor adjustments to LTCG tax for select investors, especially for Foreign Portfolio Investors (FPIs), as insufficient to revive the Indian equity market. He suggested bringing down the LTCG tax to zero for all investors in a recent post on X.
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