India Investing

Legal Risks

India Investing

1. FDI / FEMA Structuring 2. Beneficial Ownership and Control Risk 3. Tax Treaty, GAAR, and Substance Risk 4. Sectoral Licensing and Approval Risk 5. Promoter Governance and Post-Close Leakage Risk 6. Anti-Bribery, Sanctions, and Government-Touchpoint Risk 7. Data Protection, AI, and Cyber Risk 8. Competition and Gun-Jumping Risk 9. Land, Title, and Environmental Risk 10. Exit and Enforcement Risk 11. Investment Treaty Protection Gap
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Tax Treaty, GAAR, and Substance Risk

Domestic: Medium Foreign: Critical

In January 2026, Supreme Court's landmark ruling in Authority for Advance Rulings (Income-tax) v. Tiger Global International II Holdings reset India's approach to treaty-based tax planning. The ruling reinforced India's willingness to pierce Mauritius and similar treaty structures where substance is weak. Tax residency certificates alone are now insufficient and not conclusive evidence of tax residency; real commercial purpose is required. This changes the risk profile at entry, exit, and for legacy portfolios.

Domestic

  • Carry characterisation
  • Fund vs business income
  • Promoter rollover taxation
  • Disguised distributions

Foreign

  • Treaty routing (Mauritius/Singapore) must be supported by real board governance, personnel, investment committee substance, and independent economic rationale
  • PE secondary exits, offshore stake sales, and indirect transfer events carry high exposure —where the economic value derives from Indian assets but the transfer happens outside India

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