New Delhi, Nov. 3 -- A sustained return of foreign institutional investors (FIIs) to Indian equities will depend not only on possible relief in long-term capital gains (LTCG) taxation but also on stability in the rupee and an improvement in the geopolitical situation in West Asia, independent market analyst Ambareesh Baliga said.

Baliga said removing LTCG tax could provide a significant boost to investor sentiment, as foreign investors have faced the combined impact of capital gains taxation and rupee depreciation.

However, he said the currency outlook and geopolitical developments would remain important factors in determining the direction of foreign fund flows.

"If these things fall in place, I think you'll have the foreign investors...