Trust & transparency: How India’s capital markets became a global benchmark

By Gopal Krishna Agarwal,

SEBI and India’s stock exchanges have laid the foundation of a fair, efficient, and technology –driven ecosystem that inspires confidence globally.

Financial markets are the backbone of capital formation — the vital bridge connecting savings to investments. Land, Labour, and capital are the three classical pillars of economic development.

 

India is abundantly endowed with land and labour but has historically faced a scarcity of capital. Despite a traditionally high savings rate, the challenge has often been channeling these savings into productive avenues. A well-regulated and transparent capital market provides precisely that channel transforming individual thrift into national strength.

 

Ø  India’s Capital Markets: Setting Global Benchmarks

 

Under the aegis of the Securities and Exchange Board of India (SEBI) and the Ministry of Finance, India’s stock exchanges have evolved into global benchmarks of efficiency and trust. Nearly 100 percent of market delivery today is in dematerialised form.  Investors enjoy complete online trading with real-time price discovery across geographies and full counterparty settlement guarantees.

 

India ranks 13th among 190 countries for minority shareholder protection a testament to its robust corporate governance framework.  Exchanges have built a sophisticated ecosystem of compliance and leveraged cutting-edge automation to enhance transparency and reliability. The result is a surge of global confidence and unprecedented participation from Foreign Institutional Investors (FIIs) and foreign Portfolio Investors (FPIs).

 

As of 31 December 2024, the total market capitalisation of NSE-listed companies stood at 439 lakh crore, with an average daily turnover of ₹1.1 lakh crore in the capital market and 2316 lakh crore in the derivatives market - figures that underscore both scale and resilience.

 

Ø  Markets Are Built on Trust, Not Just Capital

 

Markets are not built merely on flows of funds; they rest on the bedrock of trust. Every trade, every regulatory decision, and every investment reflects the investor's faith in a system that is fair, transparent, and resilient.

This trust is especially vital in India, where the capital market has become a central pillar of national growth - financing infrastructure, telecom, energy, healthcare, and innovation. Over decades, regulatory institutions have evolved steadily, ensuring that India's market ecosystem commands credibility even amid global turbulence.

Ø  The Fragility of Sentiment

 

However, market trust is not immune to external shocks. A single report, a sensational headline, or a speculative filing can trigger waves of volatility. Recent years have witnessed attempts by short-sellers and speculative entities to exploit this fragility - aiming not to uncover the truth but to profit from panic.

 

Such episodes pose two risks: one, the immediate erosion of investor sentiment; and two, the deeper, longer-term threat of undermining confidence in India's institutions. The greater danger lies in overreaction allowing isolated events to define perceptions of India's market integrity, despite a long record of resilience.

 

Ø  Hindenburg 2023: The First Shock

 

In January 2023, US-based Hindenburg Research released a report alleging irregularities in the Adani Group. The report led to a steep fall in Adani stocks, erasing billions in market value and sparking multiple Public Interest Litigations (PILs).

 

When the dust settled, however, a Supreme Court-appointed expert committee found no systemic lapses. SEBI's detailed investigation also revealed no violations of related-party transaction or listing regulations. Notably, Hindenburg itself admitted to taking short positions in the same securities a clear conflict of interest that called its motives into question.

 

Ø  Viceroy 2025: A Pattern Repeats

 

In July 2025, a similar episode unfolded. Viceroy Research, a relatively obscure foreign short-seller, accused Vedanta Ltd. of irregularities the company was proceeding with a major demerger. Vedanta immediately dismissed the report as a "malicious combination of selective misinformation and baseless allegations."

 

A PIL was again filed, but on 10 October 2025, the Supreme Court refused to entertain it. The Court questioned why entities outside India were so deeply concerned about Indian corporate affairs. The Solicitor General highlighted a broader pattern - foreign agencies releasing timed reports to influence Indian markets and trigger volatility.

 

Despite political noise and speculative commentary, investors remained composed. The absence of sustained panic reflected growing maturity and confidence in the regulatory system. The episode demonstrated that Indian investors are learning to distinguish between genuine governance concerns and manipulative short-selling strategies.

 

Ø  Institutional Maturity and Judicial Balance

 

India's institutional response has been measured and wise. The Supreme Court, in both instances, upheld SEBI's primacy as the capital market regulator, reinforcing the principle that due process cannot be hijacked by sensationalism.

 

PILs are not signs of weakness but of democratic openness. The judiciary's restraint and SEBI's professionalism have together sustained confidence in India's financial architecture.

 

Building Resilience Through Trust

 

The path forward lies not in overregulation which risks stifling tl market but in strengthening resilience through trust.

 

For companies, that means proactive disclosure, timely communication, rigorous audits, and unwavering adherence to corporate governance. For investors, it calls for patience, discernment, and faith in regulatory institutions that have repeatedly demonstrated their integrity.

 

Trust, after all, is the ultimate currency of financial markets. India's capital markets are emerging stronger from every test, proving that transparency and institutional strength are their greatest assets.

 

SEBI and India's stock exchanges have laid the foundation of a fair, efficient, and technology-driven ecosystem that inspires confidence globally. As India moves towards becoming the world's third-largest economy, its capital markets will remain not just a reflection of economic power but a measure of collective trust.

 

(The author is National Spokesperson, BJP; Views expressed are personal)

 Reforms without bombast: Modi govt streamlines processes

Gopal Krishna Agarwal,

 

Modi Government in the last 10 years has initiated several steps to streamline processes, repeal redundant laws and regulations and eliminate discretion.

 When, it comes to economic reforms, in our obsession to look for big-bang, news-worthy headlines we tend to miss out on seemingly smaller developments. Media and the chatterati look for hotly contested issues, where passions run high and the political economy of the country makes progress very challenging.

 

An unfortunate consequence of this bias is a lack of fair assessment of the many ways in which the Government is upending the entrenched system of governance. Political corruption at the highest levels was one of the most important issues in the run-up to the 2014 general elections.

 

With the Modi Government taking over the reins in 2014, that variant of corruption was eliminated. Laws and policies are no longer made in return for kickbacks. However, the harassment and corruption at lower-level causing difficulties to businesses and citizens is a different animal altogether.  Recognising the need for a comprehensive, multi-faceted approach to tackle this menace, Modi Government has initiated several measures.

 

Modi Government in the last 10 years has initiated several steps to streamline processes, repeal redundant laws and regulations and eliminate discretion. This has led to marked changes in the way citizens interact with the bureaucracy. The threat of fastening criminal charges on violations of laws, rules and regulations was a threat that facilitated easy extraction of money from businesses.

Minor violations have now been decriminalised by the government and violators can only be made to pay fines. The other area of reform is the repeal of obsolete and redundant laws and regulations. Modi government in last 11 years has repealed over 1500 laws and eliminated over 40,000 unnecessary compliances.

 

Government has tried to use technology and reduce subjective discretion of administration, like in the case of GST reforms making process of registration, filling of returns, assessment and refunds completely online and simplifying the whole process. Direct Benefit Transfers to the beneficiary accounts has removed leakages and corruption from the government welfare schemes.

Single window online permission for businesses through Udyog Mitra initiatives of active State governments is to bring efficiency and reduce bureaucratic interference. Even in case of income tax, where ordinary citizens might have to interact with the bureaucracy, the process has been made completely virtual with E-assessment.

 

While issuing notice under the Income Tax Act, the officer does not know who the notice/assessee is, and the latter does not need to meet any officer to offer explanation, the process is anonymous. There is significant development in the matters of income tax refunds and assessment, which has now been made time bound.

 

Another such development took place in the recent past. In the month of June 2025 Delhi Lieutenant Governor (LG) repealed licensing regulations under section 28(1) of the Delhi Police Act, 1978, for seven specific trades. These include hotels, motels, guest houses, restaurants and eateries, discotheques, swimming pools, video game parlours, amusement parks and auditoriums. Following this, Delhi Police on 28th June issued a gazette notification implementing the directions of the LG with immediate effect.

 

Indian bureaucracy has traditionally enjoyed much power and discretion over daily lives of citizens- be it in their personal space or in running government. This has manifested in arcane and overbearing rules and regulations and the impulse to control outcomes. This power also leads to rent seeking behaviour on part of the individuals in the bureaucratic set-up. It is also typical of any individual or institution that once power, privilege or discretion is enjoyed by it, it will fight tooth and nail to preserve and protect its turf. Delhi Police, despite all its professionalism, could not be assumed to have acted differently. Therefore, it goes to the credit of its political boss, the Home Minister for pushing through this reform.

 

All these efforts are in the right direction but still business community has certain grievances calling for harassment. At policy level lot of things have been achieved by the government, though there is space at the implementation level. People with background in business and finance with foot on the ground, in the implementation structure is sure to bring more efficiency in governance.

 

An economy with regulatory cholesterol, finds it difficult to compete with other dynamic economies in the international arena, regulatory compliances add to the cost of doing business. It is one of the major challenge for the manufacturing sector to be internationally competitive. Therefore, Modi Government had made deregulation a major focus.

 

It has set up a Deregulation Commission for the non-financial sector that will take a comprehensive view of all the regulations and come up with recommendations. As the name itself suggests, the focus will be on doing away with otiose regulations. A similar initiative for the financial sectors is also in the pipeline. NextGen GST reform and Jan Vishwas bill are sure to bring ease of doing business to the business community.

 

A series of such crucial reforms, minus the sound and fury associated with the big measures, is imparting resilience to our economy by making private enterprise more fruitful. The cumulative impact of these steps is much more significant than only big steps that any government might take. Modi Government has always believed that reform is a process and not an event and its working shows deep commitment to this belief. The most recent quarterly GDP growth of 7.8 per cent is a vindication of government’s philosophy on reforms.

 

Gopal Krishna Agarwal

National Spokesperson of BJP