New Delhi might reconsider permitting Indian businesses to list abroad: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said on Monday that India may reevaluate permitting local companies to list on overseas markets, suggesting that New Delhi may revive a plan that had been put on hold due to internal resistance and tax concerns.

Indian businesses presently are notpermitted to list directly on international exchanges. They are the only ones who can list on foreign exchanges using tools like depository receipts.

The proposal to permit Indian companies to list directly overseas was initially made public in 2020, but it was later abandoned due to worries surrounding tax losses and criticism from a faction of the ruling party that worried less Indian regulatory scrutiny of domestic companies that list abroad.

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Following bilateral discussions after the weekend’s G20 summit in New Delhi, Sitharaman spoke at a press conference alongside the British Finance Minister, Jeremy Hunt.

“We are particularly pleased to make a big step forward to make a first confirmation by India that it will explore the London Stock Exchange as an international destination for the direct listing of Indian companies,” Reuters quoted Hunt as saying.

Before the government ruled against authorising foreign listings, Reuters reported in 2020 that the London Stock Exchange was in discussions with a number of Indian technology companies for their international stock listings.

In order to facilitate businesses’ access to international finance, India announced in July that it would let companies to list on exchanges recognised by the International Financial Services Centre (IFSC), a new tax-neutral financial centre situated in Gujarat International Financial Tech City (GIFT).

“We have mentioned earlier once that we are looking at listing, commencing with the IFSC, so once that is done, we may look at moving further (with overseas listing),” Reuters quoted Finance Minster Nirmala Sitharaman as saying.

She further stated that at the present stage, the ministry is looking to commence listing in the IFSC.

(With inputs from Reuters)

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