India is clipping the wings of businessmen it considers a flight risk. Weeks after the nation's largest bank fraud investigation began, lawmakers, bureaucrats and court officials began drafting tighter rules to prevent citizens fleeing abroad with unpaid dues.

A Mumbai court last week ordered top executives of indebted Aircel Ltd., owned by Malaysian billionaire T Ananda Krishnan, to refrain from leaving India without permission as the failed mobile-carrier slipped into bankruptcy. The same day, Parliament began considering a bill to confiscate the assets of so-called ...