Death knell sounds for India's P-note trade

End to offshore tax exemption would hit equity-based offshore trading product

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The Indian government is clamping down on overseas tax avoidance

A recent move by the Indian government to clamp down on overseas tax avoidance could spell the end for a particular kind of offshore derivatives instrument known as a participatory note (P-note), say market participants. Most P-notes are sold out of either Mauritius or Singapore, two jurisdictions where investors do not have to pay capital gains tax when selling Indian equities. But this cosy tax arrangement could be about to end, and if it does, overseas investors may think twice about using P-

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