Seven international business groups warned India Monday they are reconsidering their investments in India because of a plan to retroactively tax business deals.

India's proposal is widely regarded as targeting British mobile giant Vodafone which won a long-running legal battle in January when India's Supreme court dismissed a $2.2-billion dollar tax demand over Vodafone's acquisition of Hutchison Whampoa's Indian unit. Britain's finance minister meets with his Indian counterpart Monday.

The letter to Prime Minister Manmohan Singh from the business groups said the “unprecedented” move to bypass the court ruling has “undermined confidence” in the policies of the Indian government.

The letter said the proposal, announced in last month's budget, “has called into question the very rule of law, due process, and fair treatment in India.”

New Delhi's tax proposal would be retroactive to 1962, imposing a tax on deals conducted overseas where the underlying asset is located in India and allowing New Delhi to pursue tax on long-concluded transactions.

The letter from the international business groups said if the proposal becomes law India will lose “significant ground as a destination for international investment.”