Walmart-controlled Flipkart received a key approval to shift its domicile back to India, a prerequisite for a local listing, in a move that reflects a shift in India-US economic ties amid prolonged bilateral trade negotiations.
The National Company Law Tribunal (NCLT) approved the re-domiciling scheme on Friday, according to an order reviewed by Mint.
The restructuring is fair and not prejudicial to the interests of shareholders or creditors, the tribunal said, while clearing India-based Flipkart Internet Pvt. Ltd’s intra-group amalgamation scheme involving eight Singapore-incorporated entities. The combined entity will be called Flipkart Internet Pvt. Ltd.
The NCLT approval for re-domiciling follows the Singapore High Court’s clearance a few weeks ago. The only remaining requirement is the Press Note 3 (PN3) security clearance, which is necessary under India's foreign direct investment (FDI) rules.
PN3 clearance is needed for overseas investments in sensitive sectors or from countries sharing a land border with India, a move largely targeted at China to curb opportunistic takeovers and acquisitions of Indian companies during the covid-19 pandemic.
Tencent, a Chinese tech company, owns around 5% of Flipkart. US retail giant Walmart Inc holds a controlling stake in Flipkart and exercises full operational and strategic control.
PN3 clearance procedural?
The Flipkart case involves “a very small (Chinese) investment, and is purely financial in nature. Typically, concerns arise only when there is a technology partnership involved, which is not the case here, or when the stake exceeds 10%. A 5% holding, that too without any control, is a no-brainer,” the second person quoted earlier said.
“Press Note 3 is procedural in this case because it is a very small investment, with no operational or board role,” said this person, who is involved in the process of the proposed changes to Press Note 3.
“In fact, Tencent has written to the Department for Promotion of Industry and Internal Trade (DPIIT) to clarify that the investment is purely financial in nature and carries no board representation or control,” this person said.
Mint reported on 5 September that India is exploring whether a company with a small shareholding from a China-based or connected entity can be considered a ‘Chinese’ firm, as New Delhi prepares to ease curbs on investments from its neighbouring nation to counter US tariffs.
Queries emailed to the department for promotion of industry and internal trade (DPIIT), Union finance and external affairs ministries, Flipkart and Tencent remained unanswered until press time.
Merger scheme
Under the approved scheme, seven Flipkart group companies that are currently incorporated in Singapore will first merge into Flipkart Internet Pvt Ltd in India. After this, Flipkart Private Ltd, the main Singapore-based holding company of the group, will also merge into the Indian company, completing the shift of Flipkart’s corporate base from Singapore to India.
The tribunal noted that the restructuring is aimed at simplifying Flipkart’s holding structure, reducing multiple layers of ownership, cutting compliance and administrative costs, and improving operational efficiency by consolidating decision-making in India.
It also recorded that the merger does not involve any corporate debt restructuring and that Flipkart Internet has no secured creditors, while all equity shareholders and unsecured creditors have given their consent, allowing the tribunal to dispense with meetings.
Regulatory concerns raised by authorities, including the regional director, Income Tax Department; Reserve Bank of India, Competition Commission of India (CCI) and Insurance Regulatory and Development Authority of India (IRDAI), were examined in detail. The tribunal noted Flipkart’s undertakings on Foreign Exchange Management Act (Fema) compliance, settlement of micro, small, and medium enterprises (MSME) dues, payment of statutory liabilities, preservation of records, and protection of employee interests across all merging entities.
The tribunal also recorded that the merger qualifies for an intra-group exemption under competition law and does not require prior CCI approval, though a notice was still served.
The tribunal observed that although Flipkart Internet is a loss-making entity, the Companies Act, 2013 does not bar such firms from undertaking restructuring, and the commercial rationale of the scheme falls within the domain of shareholders rather than judicial scrutiny.
Potential IPO
Shifting the holding company to India aligns governance with where business is conducted and simplifies compliance, the people quoted earlier said. It also prepares the company for a potential domestic public listing, which requires the parent entity to be incorporated in India.
“The re-domiciling is also a crucial structural prerequisite for any eventual public listing in India, as market regulators require the parent entity to be domiciled in the country,” said the first of the two persons cited earlier.
An industry expert, requesting anonymity, said as Flipkart’s core operations, revenues, sellers, consumers and data are all based in India, being domiciled overseas increasingly creates regulatory complexity. “Moving the holding company to India aligns the corporate structure with the jurisdiction where business is actually conducted, making compliance with India’s e-commerce, data protection, competition and consumer laws more straightforward.”
Vivek Jalan, partner at Tax Connect Advisory Services LLP, a multi-disciplinary consulting firm, said by shifting its base from Singapore to India, Flipkart “aligns its tax residence with where key management and commercial decisions are actually taken”. “This allows the company to gain greater tax certainty and avoid potential disputes over residency and profit attribution, while bringing its structure in line with India’s evolving tax compliance framework.”
India-US ties
Flipkart’s shift to India has been underway for more than a year, involving detailed legal restructuring and regulatory coordination in both Singapore and India.
The NCLT approval comes as India and the US are attempting to resolve legacy issues around digital taxation, e-commerce policies and investment transparency.
“The decision reinforces India’s argument that its policy and regulatory framework is becoming more predictable and investment-friendly,” said Abhash Kumar, a policy expert. “Even with unresolved frictions in the India–US relationship, such moves help demonstrate that large global investors continue to see long-term value and certainty in the Indian market.”
According to experts, Flipkart’s re-domiciling is a marker of maturing India–US trade and investment cooperation, occurring at a time when both countries are reassessing supply-chain dependencies and digital regulation frameworks.
For the US, it underscores how India continues to be a strategic destination for large-scale investments despite trade frictions. For India, Walmart’s continued expansion reinforces the government’s narrative that global capital remains confident about its regulatory direction.
“This move reflects a deeper convergence in India–US economic thinking, where trusted capital, supply-chain resilience and regulatory alignment are becoming central to bilateral engagement,” said Amit Singh, associate professor at the Special Centre for National Security Studies, Jawaharlal Nehru University. “Re-domiciling decisions like this signal a shift from transactional investment flows to more strategic, long-term cooperation.”