Foreign Investors Seek Tax Indemnities for Startup Investments Amid Rising Tax Notices

Foreign investors in Indian startups are increasingly seeking tax indemnities to protect themselves from the growing number of tax notices being issued by Indian authorities. This trend is driven by concerns over the unpredictable tax environment in India, which has raised apprehensions about the potential financial liabilities that may arise from their investments. Investors are particularly worried about retrospective tax demands and the implications of ambiguous tax laws. As a result, they are negotiating more stringent indemnity clauses in their investment agreements to mitigate these risks.