Indian Startups Seek Tax Clarity After Supreme Court Ruling Alarms Investors
A group representing 60 Indian startups has urged the government to provide clarity on tax policy following a recent Supreme Court ruling that has unsettled foreign investors. The startups have asked New Delhi to confirm that the decision will not be used to reopen or scrutinise older investments, warning that uncertainty could hurt confidence in India’s startup ecosystem.
The concerns stem from a landmark judgment in which the Supreme Court ruled that Mauritius-based entities used by Tiger Global to sell its $1.6 billion stake in Flipkart to Walmart in 2018 were conduits for tax evasion under the India–Mauritius tax treaty. While Tiger Global has denied any wrongdoing, the ruling has raised fears among investors because the court said domestic anti-evasion laws could override treaty benefits if they were wrongly claimed.
In a letter to the finance ministry, the Startup Policy Forum cautioned that the verdict could send mixed signals to global investors and called for reassurance that pre-2017 investments would not be taxed, in line with earlier government commitments. While a senior government lawyer dismissed concerns as exaggerated, startups worry about broader implications, especially given that Mauritius has historically been India’s largest source of foreign investment, funding many of the country’s leading startups.
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