A Big New Reform Cleared By PM Modi 2 Years Ago Remains Stalled

Centre will take around six months to announce rules allowing companies to list overseas.

Centre will take around six months to announce rules allowing companies to list overseas, taking longer than some expected as the finance ministry irons out issues related to taxation, two government officials and four industry sources told Reuters. The delay is likely to dampen hopes of investors like Tiger Global, Sequoia Capital, Lightspeed and many Indian startups who last month urged Prime Minister Narendra Modi to swiftly announce rules governing foreign listings that were given the go-ahead almost a year ago. Two senior government officials said the rules will only be announced with the February federal budget as there was no decision yet on how the government should tax big investors and retail traders when they trade Indian companies listed abroad. A key concern is to ensure that big venture capital and foreign investors pay an equal long-term capital gains tax - roughly around 10 per cent - even if they exit an Indian company listed on foreign bourses like Nasdaq, said the six sources familiar with these private discussionsThree industry sources said that to convince the government, some investors, merchant bankers and startups have suggested that an investor's exit from an Indian company that may list abroad can be taxed as per Indian laws, if that investor has a significant shareholding of 10-20 per cent.