India could tax only the large foreign shareholders of domestic companies that list directly on overseas exchanges, and such listing may initially be limited to select jurisdictions including the International Financial Services Centre at GIFT City in Gujarat.

Overseas listings are expected to help large Indian startups raise funds at good valuations on foreign exchanges where demand may be higher.

A detailed framework is expected to be announced in the union budget for FY23 that may also list the jurisdictions where the Indian companies could list and provide clarity on the taxability of investments.