Indian equities plunged the most in four weeks and the rupee dropped to a three and a half-month low in early trade on Tuesday as crude oil retreated further and the nation’s trade gap widened.
The Indian rupee fell to 63.1550 per dollar on Tuesday.
The Nifty fell 0.38 per cent, its lowest since March 30. The benchmark BSE sensex stumbled by 555.89 points or 1.95 per cent to end at three-week low of 27,886.21.
Heavy capital outflows kept the rupee under pressure, foreign exchange dealers said.
Concerns over retrospective taxation also loomed large among foreign investors.
The Indian Finance Ministry had earlier said it plans to raise about $10 billion by retrospectively taxing foreign companies.
Indian Finance Minister Arun Jaitley said he would retrospectively tax foreign institutional investors on capital gains made in previous years.
Around 100 foreign funds have already been served tax notices estimated at $6 billion.
“They seem to be trying to browbeat us through a sustained campaign… if you want to do business in a country and derive value from the country, you are liable to pay tax in that country,” an Indian tax official was quoted in a report by Indian daily Times of India.
TBP and Agencies