India to explore London Stock Exchange for listing local firms

India will reconsider allowing local firms to list on foreign exchanges, including the London Stock Exchange, Finance Minister Nirmala Sitharaman said Monday, in a move that could allow startups in the South Asian nation to gain access to foreign capital for growth.

One of the exchanges India is considering is the London Stock Exchange, which outside of the New York Stock Exchange and Nasdaq is one of the largest and tech stocks-heavy exchanges. India had earlier considered allowing overseas listing of Indian firms in 2020, but later put it on the back burner.

“We are particularly pleased to have made a big step forward with the first confirmation by India that it will explore the London Stock Exchange as an international destination for the direct listing of Indian companies,” said British Finance Minister Jeremy Hunt at a press conference.

India has been evaluating ways for years to help local firms access broader capital and reach higher valuations. The new deliberations come at a time when scores of startups in the country are eyeing public listings.

Financial services firms, consumer companies, energy and material operators dominate the Indian stock exchanges. In an analysis earlier this year, Mirae Asset projected that the Indian stock exchanges’ index will see a disproportional growth in tech stocks in the next two decades.

As Indian startups consider going public, they are likely to favor exchanges where the audience possesses a greater understanding of their business models and is more comfortable with the risk profile associated with tech firms.