India’s Supreme Court has delivered a landmark verdict against U.S. investment firm Tiger Global, holding that its $1.6 billion stake sale in e-commerce giant Flipkart to Walmart in 2018 is subject to capital gains tax in India.
The ruling, issued on January 15, 2026, overturns a prior Delhi High Court decision favoring Tiger Global and strengthens New Delhi’s stance on preventing treaty abuse in cross-border transactions.
Overturning Treaty Benefits and Tax Avoidance Claims The dispute centered on Tiger Global’s use of Mauritius-based entities to route the sale, claiming exemption under the India-Mauritius Double Taxation Avoidance Agreement (DTAA).
The agreement’s grandfathering clause protected pre-April 2017 investments from tax, but Indian authorities argued the structure was an “impermissible tax avoidance arrangement” with Mauritius units serving merely as conduits.
A bench led by Justices J.B. Pardiwala and R. Mahadevan agreed, stating the transaction’s principal purpose was tax avoidance, disqualifying it from treaty protections. This reverses the Delhi High Court’s finding of no wrongdoing and aligns with India’s post-2017 amendments curbing treaty shopping.
Implications for Foreign Investors and Cross-Border Deals The decision hands a major win to India’s tax authorities, potentially redefining interpretations of international tax treaties like the India-Mauritius DTAA. Experts note it could impact future foreign investments, increase scrutiny on Mauritius-routed deals, and signal tighter enforcement against perceived avoidance.
The case, heard since January 2025, drew global attention amid India’s booming e-commerce sector, where Walmart’s $16 billion Flipkart acquisition (including Tiger Global’s exit) remains a landmark.
Tiger Global has not commented, while government lawyers hailed it as a globally watched precedent promoting fair taxation. The ruling may deter aggressive structuring but reinforce India’s appeal as a regulated investment destination.