Hedge funds flee India over tax

May 28, 2012

Many hedge funds invested in the Indian markets, and the dealers that provide this access through P-notes, have stopped adding positions for fear of potential tax liabilities.

A number of short-term investors such as hedge funds that gain exposure to Indian securities through participatory notes (P-notes) have temporarily exited the Indian market to avoid potential future tax liability that India’s proposed tax rules might cause to their portfolios.

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