India’s Supreme Court has delivered a significant setback to Tiger Global, ruling against the global investment firm in a long-running tax dispute linked to its exit from Flipkart during Walmart’s landmark 2018 acquisition. The verdict reinforces India’s authority to scrutinize offshore investment structures and signals higher tax risk for foreign funds relying on treaty benefits for predictable exits. (Tiger Global suffers setback as it loses India tax case linked to the Walmart–Flipkart deal)
On Thursday, the apex court sided with Indian tax authorities over whether Tiger Global could legally route its Flipkart investment through Mauritius-based entities to claim exemptions under the India–Mauritius tax treaty. By overturning a 2024 Delhi High Court decision, the Supreme Court reinstated the earlier 2020 ruling of the Authority for Advance Ruling, which had held that the investment structure appeared, at first glance, to be designed to avoid Indian taxes.
Court Backs Tax Authorities on Treaty Abuse Concerns
At the heart of the dispute was Tiger Global’s attempt to avoid paying capital gains tax in India on profits earned from the sale of its Flipkart stake to Walmart. The fund argued that its Mauritius entities were entitled to treaty protection and that the gains were exempt under a “grandfathering” clause applicable to investments made before April 1, 2017.
However, Indian tax officials rejected this argument, questioning whether the offshore entities had sufficient economic substance to qualify for treaty benefits. The Supreme Court agreed, emphasizing that India’s advance-ruling system cannot be used when a transaction appears primarily structured to sidestep tax obligations. (Tiger Global suffers setback as it loses India tax case linked to the Walmart–Flipkart deal)
Implications for Global Investors in India
The ruling is being closely watched across the investment community, as it strengthens India’s hand in challenging “treaty-routing” strategies that have long been used to minimize taxes on large exits. It may also introduce greater uncertainty in how cross-border deals are structured and valued, particularly at a time when India remains a critical growth market for global capital.
A two-judge bench of the Supreme Court framed the issue as one of national sovereignty, warning against arrangements that undermine a country’s right to tax income generated within its borders.
“Taxing an income arising out of its own country is an inherent sovereign right,” the court noted, adding that artificial structures designed to weaken this power pose a threat to long-term national interests.
Background: Tiger Global and Flipkart
Tiger Global first invested in Flipkart in 2009 with an initial $9 million cheque and steadily increased its exposure to around $1.2 billion over several funding rounds. When Walmart acquired a majority stake in Flipkart in a $16 billion deal in 2018, Tiger Global exited with proceeds of roughly $1.4 billion.
The tax controversy arose from how the investment was structured—specifically, whether routing it through Mauritius entities entitled the firm to capital gains tax exemptions under the bilateral tax treaty. The Supreme Court’s ruling makes it clear that such benefits are not automatic and depend heavily on the substance and intent behind the structure. (Tiger Global suffers setback as it loses India tax case linked to the Walmart–Flipkart deal)
A Shift Toward “Substance Over Form”
Tax experts say the judgment should be seen as a warning against aggressive tax planning rather than a complete rejection of the India–Mauritius treaty framework. Ajay Rotti, founder and CEO of Tax Compass, described the decision as reinforcing India’s move toward evaluating the real commercial substance of offshore entities instead of merely their legal form.
