The Indian government has come under fire for its decision to introduce a retrospective tax law from the global business community, the UK’s Daily Telegraph reported.

The changes, which could crystallise a £1.4 billion (around $2.24 billion) tax charge for Vodafone, the phone network giant, could create an exodus of international investment from India according to some of the world’s most powerful trade bodies, the publication said.

A letter to Indian Prime Minister Manmohan Singh from organisations such as the Confederation of British Industry, the US National Foreign Trade Council and Japan Foreign Trade Council warns the changes have “called into question the very rule of law, due process, and fair treatment in India”.

The letter comes as George Osborne, the UK’s finance minister, starts a visit to India. He is expected to raise the tax issue with ministers. The issue is sensitive as the UK, along with other countries, has been looking to foster closer commercial relations with fast-growing India.

“We are writing to express deep concerns about many of the tax provisions proposed in the Finance Bill 2012,” the letter states. “If enacted, these proposals will significantly alter the Indian taxation of our member companies with retroactive effect extending back for as much as half a century. “Some of our member companies had already begun re-evaluating their investments in India due to increasing levels of controversy and uncertainty regarding taxation,” it said.

A retrospective tax law is disliked by business – and individuals – because it arguably undermines a key principle of law, that of predictability.

As well as target companies, the Indian authorities have been mounting a high-profile campaign to crack down on Indian nationals allegedly concealing wealth in Swiss bank accounts.