Favouring foreigners in finance

Can nationalism be harnessed to promote sound economic policies? That seems an odd question to raise at a time when Indian policy makers have rightly been taken to task in recent months for the heavy-handed and arbitrary treatment of foreign investors. But, yes, in the financial sector, policies penalise or tax Indians while treating foreigners more favourably. Even more worryingly, all the signs are that this wedge may even diverge to the advantage of foreigners and to the detriment of the economy.

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