Nirav Modi's attempt to try and seek citizenship of Vanuatu shows he was trying to move away from India at an important time, the UK judge said.
The judge said there are "substantial grounds" to believe the fugitive diamantaire will fail to surrender.
Looking more dishevelled and dressed in a similar white shirt as his first court appearance last week, the 48-year-old was brought to the dock to be produced before Westminster Magistrates Court chief Magistrate Emma Arbuthnot and sat behind a glass enclosure as the hearing got underway.
Rejecting Modi's bail plea after hearing both defence and prosecution, Judge Arbuthnot said his attempt to try and seek citizenship of Vanuatu, a remote island country located in the South Pacific Ocean, shows he was trying to move away from India at an important time.
The judge fixed April 26 as the next date of hearing. Modi will appear via video link from jail at the next hearing.
In the final submission, Toby Cadman, representing crown prosecution on behalf of Indian authorities, said: "Nirav Modi isn't cooperating with Indian agencies and there's a risk he'll fly out. There's a risk that he'll influence witnesses and destroy evidence."
Earlier in the day, a joint team of Central Bureau of Investigation(CBI) and Enforcement Directorate officials(ED) officials opposed Nirav's bail plea.
A new file with additional evidence against Nirav Modi was submitted in Westminster Magistrates Court ahead of the fugitive diamantaire's appearance before a judge here for his bail second application.
The diamond merchant was denied bail by District Judge Marie Mallon at his first hearing soon after his arrest by Scotland Yard officers from a central London bank branch as he tried to open a new bank account and was in custody at the HMP Wandsworth prison in south-west London since last Wednesday.
At his first court appearance after his arrest last week, the Crown Prosecution Service(CPS), arguing on behalf of the Indian authorities had told the court that Modi is wanted for alleged "high value and sophisticated" fraud and money laundering amounting to $2 billion.
A joint team of CBI and ED officials opposed Nirav's bail plea.