NEW DELHI - A group representing 60 Indian startups has urged Delhi to clarify it ‍would not use ‍a landmark Supreme Court decision on tax evasion to scrutinise old investments, revealing ​growing concern over a case that has spooked global investors.

India's top court ruled last week that ⁠Mauritius-based entities used by Tiger Global to sell its $1.6 billion stake in Flipkart to Walmart in 2018 were "conduits" ⁠to evade taxes ‌under the India-Mauritius treaty.

Tiger Global has denied wrongdoing, saying it correctly used available tax benefits under the treaty. It has not commented on the ruling. The ⁠decision upended years of aggressive tax planning by investors to route funds into India via the tax haven of Mauritius. The ruling has sparked concern among global investors because the court also said domestic tax-evasion law could override treaty benefits claimed wrongly.

The ruling "risks sending ⁠mixed signals to foreign investors and ​may have longer-term implications for India’s startup ecosystem," Shweta Rajpal Kohli, CEO of Startup Policy Forum, said in a letter ‍to the finance ministry dated January 20 and reviewed by Reuters. The startup group has asked the government to ​reassure global investors of a stable investment environment, asking it to issue a clarification that pre-2017 investments would not face taxes, in line with a commitment made in 2017 when the India-Mauritius treaty was last updated.

The finance ministry did not respond to Reuters request for comment on the letter, which has not been made public.

The startup group, whose members include e-commerce firm Meesho, insurer Acko and food delivery platform Swiggy , also did not respond to a request for comment.

Additional Solicitor General of India N. Venkataraman on Friday dismissed the concerns, saying "the fast-spreading ⁠rumor that Tiger Global will have an impact on investment ‌is nothing but a distraction."

Indian government data shows that in the 23 years to 2023, foreign investment inflows from Mauritius were the largest at $171 billion - a quarter of all the ‌investment inflows ⁠in that period.

Many Indian startups have over the years received funding from investors who routed funds via ⁠the tiny island nation.

(Reporting by Vibhuti Sharma; Editing by Kate Mayberry)