Several big western companies are nervously awaiting a landmark ruling from India’s Supreme Court which could saddle Vodafone with a €1.93 billion tax bill and send further pessimistic signals about India’s fast-deteriorating investment climate.

India’s tax authorities are pursuing the UK-listed telecoms group for capital gains tax they claim is due on its $10.9 billion (€8.1 billion) acquisition of Hutchison Essar, an Indian mobile operator, four years ago.