Article · 12 min read

India's Reverse-Flip Wave: Regulatory Breakthroughs and Enabling Frameworks

Dev Goyal and Manas Divetia · IndiaCorpLaw Free Advanced India

A legal analysis of the 2024 rule changes that let a foreign holding company merge into its Indian subsidiary, the companies that used them, and the tax questions that still make a flip back expensive.

  • Rule 25A(5) of the merger rules opened the fast-track route under Section 233 to foreign holding companies merging into their Indian subsidiaries.
  • The 2024 NDI Rules amendment lets the Indian company issue shares to the foreign holding company's shareholders under the automatic route.
  • A reverse flip is still a taxable event, and GAAR needs documented commercial substance, which is where most of the cost sits.
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The question it answers

  1. My company has a Delaware or Singapore parent but all the business is in India. Should I reverse flip in 2026, and what does it cost?

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