Members Only Article

India Is New Battleground for Financial Transaction Taxes

April 17, 2026 | 4 minutes reading time | By Anisha Sircar

Debate flared over a measure that is aimed at reducing risk but has been vilified in U.S. and other market centers.

India’s markets were shaken on February 1 when Finance Minister Nirmala Sitharaman unveiled the 2026-2027 budget. It proposed Securities Transaction Tax (STT) increases on equity futures to 0.05% from 0.02%, on options premiums to 0.15% from 0.10%, and on exercise options to 0.15% from 0.125%. The Nifty 50 and other market indicators tumbled.

India, which is the world’s largest equity derivatives market, was thrust more deeply into a global debate that has been simmering for decades: Are financial transaction taxes (FTTs) a reasonable policy option for curbing speculation and raising revenue? Or will markets resist and find ways to circumvent them?

Transaction taxes exist elsewhere, notably in the form of a U.K. stamp duty that has been a sore point for financial industry interests. Some U.S. political candidates have supported fractional FTTs, as advocated by economists such as the late Nobel laureate James Tobin. Proposals at the state level have prompted threats by exchanges to relocate (see Will a Financial Transaction Tax Put Markets at Risk?).

Calculating the Cost

India’s new futures STT would be based on notional lot value...

to access this content.

Become a GARP Member to Unlock Exclusive Risk Insights and More!

  • Access timely articles, thought leadership, and an archive of on-demand webcasts, event recordings, and Chapter meeting presentations in our Member Multimedia Library.
  • Get regulatory capital data for global and regional banks in North America, Europe, Asia, and Africa through our Pillar 3+ data analytics platform from the GARP Benchmarking Initiative (GBI®).
  • Gain priority registration to attend any worldwide Chapter meeting for free, as well as preferential rates for GARP events and access to local members-only dinners and professional networking opportunities.
  • Receive comprehensive access via our digital GARP Learning platform to the latest curriculum readings, videos, end of chapter practice questions, and more for the program(s) of which you passed the exam(s).

Topics: Financial Markets, Regulation & Compliance

Share

Related Insights

Article Members Only

Global Investment Performance Standards: Widely Adopted But in Some Places a Tough Sell

March 6

Recent efforts are aimed at reeling in alternative asset managers and ...

Market, Investment Management, Data, Regulation & Compliance
Read Article
Article

In Memoriam: John C. Hull

February 18

The late University of Toronto professor leaves “a rich legacy of peda...

Career Development, Financial Markets, Innovation, Tools & Techniques
Read Article
Article

Regulatory Reporting: The Need for Interoperability

April 10

If achieved by a data-point-based, rather than a report-based, reporti...

Regulation & Compliance, Data
Read Article