On September 11, Finance Minister Nirmala Sitharaman said that India is reconsidering allowing domestic companies to float on overseas stock exchanges. This action signals that a previously shelved scheme may be revived due to internal opposition and taxation issues.
Indian enterprises currently do not have direct access to international stock exchanges for listing reasons. Instead, businesses can facilitate their participation in foreign exchange markets by using instruments such as depository receipts.
The plan to allow Indian corporations to immediately list on foreign exchanges was first made public in 2020. It was later abandoned, however, due to concerns about prospective tax revenue losses and criticism from a faction within the ruling party. This group was concerned about diminished regulatory oversight.
Following the G20 summit in New Delhi, Finance Minister Nirmala Sitharaman met with British Finance Minister Jeremy Hunt. Hunt expressed pleasure with India’s decision to explore the London Stock Exchange as a prospective overseas destination for the direct listing of Indian companies during a joint press conference.
This development comes after Reuters revealed in 2020 that talks between the London Stock Exchange and many Indian technology giants on overseas stock listings had taken place. However, these ambitions were thwarted when the Indian government decided not to allow foreign listings.
India made a statement in July aimed at facilitating firms’ access to global funding. According to the announcement, companies would be able to list on exchanges recognized by the International Financial Services Centre (IFSC), a newly constructed tax-neutral financial center located within the Gujarat International Financial Tech City (GIFT).
According to Reuters, Finance Minister Nirmala Sitharaman noted that they have previously stated that they are considering listing, beginning with the IFSC. After that, they may look at other options for international listings.
She highlighted that, for the time being, the ministry’s primary priority is on starting listings within the IFSC.
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