"They departed due to their personal interests": Piyush Goyal asserts that startups engaging in reverse-flipping should be subject to taxation.

Numerous Indian startups based overseas have been contemplating relocating their operations to India, a process known as reverse-flipping, due to the favourable business environment. However, Minister of Commerce and Industry, Piyush Goyal, has stated that startups intending to reverse flip or return to India will be subject to taxation. He emphasized that determining which companies should be taxed upon returning would be challenging, suggesting that these firms initially left out of self-interest, so their return cannot be viewed as a selfless gesture. Additionally, Goyal addressed the issue of angel tax, attributing its introduction to prevent fraudulent practices of inflating company values by certain entities.

Various sectors, including fintech, e-commerce, stock broking, healthcare, and EdTech, have witnessed Indian startups considering shifting their base back to India. Bhavish Aggarwal, the founder of Ola Cabs, Ola Electric, and AI startup Krutrim, highlighted that the majority of funding into Indian companies has historically been directed towards firms domiciled within the country. He criticized the practice of domiciling companies outside India, attributing it to short-sighted investors. Aggarwal urged entrepreneurs to prioritize incorporating their businesses where they truly belong.

In response to the trend of Indian startups being domiciled abroad, the government formed a committee last year to explore ways to facilitate the return of Indian innovation to domestic shores, particularly to the International Financial Services Centre in the Gujarat International Finance Tec-City.