India will resolve tax-related issues affecting long-term investment by private equity (PE) firms as the country looks to position itself as a global destination for finance like London and Singapore.

The government is aware of the concerns expressed by PE and venture capital (VC) investors and will look to address these issues in the national budget to be presented in Parliament on 28 February, junior finance minister Jayant Sinha said on Friday.

“How do you deal with friction points from a taxation point of view? I can’t speak in specifics but I am aware of concerns related to tax pass-through, REITs (real estate investment trusts),” he said at a conference organized by the Indian Private Equity and Venture Capital Association, an industry lobby group. “Whatever you can do in London and Singapore, you should be able to do in India as well,” Sinha said. “We are looking to make India a hub for global investments.”

The government is also trying to make infrastructure investment trusts more attractive by looking at the tax issues related to them, he said.

“I can’t speak about it because the budget is nearing. But we are looking at these issues to be addressed in budget,” the minister said while assuring domestic and foreign investors about India’s friendliness as an investment destination.

PE investors have been unhappy with the tax treatment meted out to them. They say tax policies are friendlier to short-term portfolio investors rather than long-term foreign direct investment (FDI). A demand of PE investors has been for a tax pass-through, which will ensure income is exempt at the fund level and only taxable in the hands of investors.

Sinha’s comment that Indian laws should be similar to those abroad is reassuring, according to Nishith Desai, founder and managing partner of Nishith Desai Associates, a law firm with offices in India, Singapore, Germany and the US.

“It gives hope the forthcoming budget will reaffirm complete pass-through to VC and PE firms and investors would be directly taxed and the tax will not be levied at the pooling level. Partial pass-through in case of REITs has already made it a non-starter,” he said while pointing out that the PE industry brought in more than $93 billion in 10 years into the country.

In a bid to attract overseas investors, the Narendra Modi-led National Democratic Alliance government has started taking a number of steps to offer a stable and predictable tax regime in India.

The government has already decided not to appeal against adverse lower court rulings in transfer-pricing cases involving under-pricing of share issuances by the local units of multinational companies to the foreign parent.

Transfer pricing is the practice of arm’s length pricing for transactions between a group’s companies based in different countries to ensure that a fair price—one that would have been charged to an unrelated party—is levied.

In addition, finance minister Arun Jaitley had promised last year that the new government will not bring in any changes to tax laws retrospectively.

Mahendra Swarup, managing director of Avigo Capital, said tax pass-through is a long pending demand of investors.

?”The government should look at establishing financial economic zones in India itself where investors can be domiciled and not taxed. Then investors will not need to route their money through countries like Mauritius and Singapore to save on tax. This will eliminate the need for setting up intermediaries and fears of the tax department questioning such structures,” he said.