# Why 36-year market veteran warns of Indian economic dismay

> Ajit Dayal, India's 36-year market veteran warns FPIs face US$25bn annual redemptions due to governance issues and tax policies.
- Title: Why 36-year market veteran warns of Indian economic dismay
- Summary: Ajit Dayal, India's 36-year market veteran warns FPIs face US$25bn annual redemptions due to governance issues and tax policies. India's foreign portfolio…
- Keywords: fpi, governance, tax policies, market capitalisation, pension funds, quantum advisors, india, foreign portfolio investors, capital flows, fpi redemptions, business, money
- Source: Financialexpress — https://financialexpress.com/business/economy-explained/never-seen-such-dismay-why-a-36-year-market-veteran-is-warning-india/4369099
- Author: Ajit Dayal
- Published: 2026-10-25T23:30:00+00:00
- Read time: 2 min
- Topics: fpi, governance, tax policies, market capitalisation, pension funds, quantum advisors, india, foreign portfolio investors, capital flows, fpi redemptions, business, money
## India's economic journey
India's journey from a closed economy to a global investment hub has faced rising dismay among Foreign Portfolio Investors due to governance issues, taxation policies, and lack of ease in doing business.
## 36 years of FPI engagement
Ajit Dayal, founder of Quantum Advisors, has 36 years of interaction with FPIs and states they have never seen such dismay and irritation with India.
## FPI investment growth
The number of registered FPIs has surged 24x from 500 to 12,000 in the past twenty-five years with investments reaching usd800 billion.
## Market capitalisation growth
India's market capitalisation has surged 70 times in 36 years from usd60 billion to usd4 trillion while GDP has surged 12x to usd4 trillion.
## BSE-30 Index growth
The BSE-30 Index has delivered 150x growth in INR and a 25x dollar increase after adjusting for the rupee's 80% decline since 1991.
## FPIs' growing dismay
Despite India's economic growth, FPIs report increasing dismay and irritation due to governance issues and tax policies rather than cyclical factors.
## Historical context
In 1991, India was a novelty as a large economy willing to accept foreign capital with fpi investments reaching usd10 billion by 1994.
## Global crises and resilience
India weathered global crises including the 1997 asian crisis, 2000 tech bubble burst, 2001 9/11 attacks, 2003 sars pandemic, and 2020 covid pandemic.
## Current FPI concerns
FPIs are increasingly concerned about poor governance in India and the lack of ease of doing business despite economic growth.
## Tax policy impact
Pension funds face capital gains tax when moving investments from international markets to emerging market buckets in india.
## AI and governance concerns
The lack of an ai story in india and questionable governance are major concerns for fpi investors.
## FPI redemptions
Fpi investors are redeeming usd25 billion yearly instead of investing usd100 billion annually due to india's governance issues.
## Key takeaway

India's foreign portfolio investors are redeeming US$25 billion yearly instead of investing US$100 billion due to poor governance and tax policies.