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Introduction: India Opens the Door to Global Capital Markets In a landmark move, the Indian government has announced that domestic companies will now be allowed to directly list
/indianstartupnews/media/media_files/TQHnbD4FptEnpw8C260l.png?w=803&resize=803,490&ssl=1 "India’s New Foreign Listing Policy: A Game Changer for Startups and Corporates")
In a landmark move, the Indian government has announced that domestic companies will now be allowed to directly list on foreign stock exchanges and at the International Financial Services Centre (IFSC) in GIFT City, Ahmedabad.
This major policy reform — announced by Finance Minister Nirmala Sitharaman — marks a significant shift in India’s approach to capital markets, potentially revolutionizing how startups and corporations raise funds globally.
The India foreign listing policy is designed to attract global investors, improve company valuations, and create a smoother pathway for Indian unicorns and established enterprises to access international capital.
Until now, Indian firms could not directly list on foreign exchanges; they had to rely on instruments like American Depository Receipts (ADRs) or Global Depository Receipts (GDRs). The new policy simplifies that process, enabling direct listing — a long-awaited reform for India’s financial sector.
For Indian startups and unicorns, the move opens doors to global liquidity and higher valuations. Many high-growth companies have long desired listings on international platforms like the NASDAQ or London Stock Exchange (LSE) — markets known for tech-driven investor bases and deep capital pools.
For decades, Indian companies were restricted by the Companies Act, 2013 and Foreign Exchange Management Act (FEMA) regulations, which limited direct foreign listings. Only ADRs and GDRs were permitted, requiring complex structures through intermediaries.
The ADR/GDR route allowed foreign investors to trade Indian shares indirectly, but it came with compliance burdens, higher costs, and reduced transparency. Direct listing simplifies this process — allowing companies to issue shares directly to foreign investors, improving efficiency.
At a SEBI-organized event, Finance Minister Nirmala Sitharaman declared that the government has decided to enable direct listing of both listed and unlisted Indian companies on IFSC exchanges.
She described the reform as a “major step toward global capital access and improved valuations”, signaling the government’s commitment to liberalizing capital markets.
Industry leaders, investors, and policy experts hailed the move as transformative. Analysts predict this could boost investor confidence, expand funding options, and encourage startups to remain registered in India rather than seeking foreign incorporation (e.g., Singapore or Delaware).
| Aspect | ADRs/GDRs | Direct Foreign Listing |
|---|---|---|
| Structure | Uses depositary banks and intermediaries | Direct share issuance on foreign exchange |
| Regulations | Complex, multi-jurisdictional | Simplified under Indian and host exchange laws |
| Costs | Higher compliance and banking fees | Lower costs and faster market access |
| Transparency | Indirect ownership | Direct investor participation |
To start, Indian companies will be allowed to list on IFSC exchanges, such as the India International Exchange (India INX) and NSE IFSC — both located in GIFT City. These platforms operate under global standards and foreign currency frameworks.
Initially, the policy will apply to listings at IFSC, with subsequent phases expanding to 8–9 international jurisdictions, including the U.S., U.K., Singapore, and Hong Kong.
Startups can now tap into global venture and institutional capital pools, gaining access to markets that understand technology-driven business models and long-term growth valuations.
Foreign investors often prefer familiar exchanges. Direct listing allows Indian startups to attract global investors without regulatory friction, enhancing liquidity and share visibility.
Companies like Zomato, Swiggy, Ola, and Razorpay could benefit immensely from the new policy, as it allows them to list globally while maintaining Indian ownership. It also helps unicorns avoid complex foreign holding structures.
The digital arm of Reliance Industries — which raised over $20 billion from global investors like KKR, Facebook, and Google — is a likely early beneficiary. A U.S. listing could unlock massive international investor participation and improved valuations.
Global exchanges offer better price discovery, greater liquidity, and sector-specialized investor bases. For conglomerates like Reliance or Tata, this policy provides a legitimate route to expand their international investor base.
The Ministry of Finance, along with SEBI and the Reserve Bank of India (RBI), will frame detailed rules governing:
According to senior finance ministry officials, specific guidelines for implementation will be announced in the coming weeks. The IFSC framework will serve as the testing ground before the model expands globally.
Countries like China and Singapore have used dual-listing frameworks to balance capital inflow and investor access. India’s move mirrors these efforts, seeking to maintain control over domestic listings while opening foreign capital channels.
By offering direct and dual listing options, India can prevent startups from re-domiciling abroad, a growing concern among policymakers. The goal is to retain homegrown innovation while offering global market reach.
While the policy is progressive, experts caution about:
Economists warn that easy foreign listings might divert IPO activity away from domestic exchanges, potentially reducing liquidity in India’s capital markets. Hence, a balanced regulatory design is crucial.
Financial experts describe the reform as a “tectonic shift” that could redefine India’s position in global finance. According to a SEBI representative,
“This policy will democratize capital access for Indian companies and allow them to compete globally on equal footing.”
The India foreign listing policy positions the country as a global capital hub, attracting institutional investors and elevating India’s credibility as a financially liberal economy. It also complements initiatives like Digital India and Startup India, bridging local innovation with global funding.
1. What is India’s new foreign listing policy?
It allows Indian companies — listed and unlisted — to directly list on foreign stock exchanges and GIFT City’s IFSC.
2. Why is this policy important?
It provides startups and corporates easier access to global investors and higher valuations.
3. Which exchanges will Indian firms be allowed to list on first?
Initially, listings will begin at IFSC in GIFT City, Ahmedabad, followed by select global exchanges.
4. How does this differ from ADRs and GDRs?
Unlike ADRs/GDRs, direct listing allows companies to issue shares directly abroad without intermediaries.
5. What companies are expected to benefit?
Unicorns like Zomato, Swiggy, and Razorpay, as well as Reliance’s digital arm, could benefit most.
6. When will the policy be implemented?
Detailed regulations are expected to be released within the next few weeks.
India’s foreign listing policy marks a historic leap toward financial globalization. It not only unlocks new opportunities for startups and corporates but also strengthens India’s position as a trusted, competitive player in global markets.
By embracing this reform, India is signaling to the world that its innovation-driven economy is ready to compete, collaborate, and lead on the international financial stage.
The message is clear: India is not just building companies — it’s building global champions.
🔗 External Source: SEBI Official Website – Press Releases
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