Mumbai, 1 February 2026: The recent recalibration of Securities Transaction Tax (STT) is intended to encourage investors to focus on long-term equity participation, according to Sundararaman Ramamurthy, Managing Director and CEO of the Bombay Stock Exchange (BSE).
Speaking on Sunday, Ramamurthy emphasized that the move is part of a broader effort to foster healthier liquidity and more sustainable market dynamics in India’s equity markets. “By adjusting STT rates, the government is signaling a shift toward promoting long-term investment rather than short-term speculative trading,” he said.
He added that the change could strengthen market stability and support the growth of domestic capital markets over time. According to the BSE CEO, while short-term trading may see a moderation, the overall equity ecosystem stands to benefit from increased participation by long-term investors, which in turn can improve market depth and resilience.
Market analysts have echoed this view, suggesting that the STT revision aligns with the government’s objective of making equity markets a more sustainable and investor-friendly environment while supporting steady capital formation in the country.