MUMBAI, May 18 -- Swiggy's move to tweak board nomination rights to qualify as an Indian Owned and Controlled Company (IOCC) reflects a broader shift among late-stage startups with large foreign investors. The classification matters because India's foreign investment rules impose tighter restrictions on foreign-controlled companies in sectors such as e-commerce and quick commerce, particularly around inventory ownership and operational control.

Mint explains what an IOCC status means, why governance rights matter as much as shareholding, and why more startups are restructuring to meet Indian-control rules.

An IOCC is a company considered effectively controlled by Indian residents under the country's foreign investment rules. The classif...