What can India do to stop the capital flight?

India is grappling with capital flight as investors increasingly move funds to overseas markets, raising concerns about the impact on the country's financial stability. The trend has accelerated in recent months, with net outflows reaching significant levels.

Economists suggest that India could address the issue by implementing policy measures to improve the ease of doing business and enhance regulatory clarity. Streamlining tax laws and reducing bureaucratic hurdles may help retain domestic capital and attract foreign investment.

Strengthening the banking sector and ensuring better corporate governance are also seen as critical steps. Analysts argue that restoring investor confidence through transparent policies could slow the outflow of funds.

The government has taken some steps, such as easing foreign direct investment norms, but experts say more comprehensive reforms are needed. Without decisive action, capital flight could continue to pressure the rupee and widen the current account deficit.