India's attempt to protect its stock markets from international competition sent shivers through Singapore on Monday.

Shares in the operator of Singapore's stock exchange, SGX (SPXCY), plunged more than 7% on Monday after India's three main markets -- the National Stock Exchange (NSE), the Bombay Stock Exchange and the Metropolitan Stock Exchange of India -- said they would stop licensing data to foreign trading platforms.

The Indian exchanges said they were concerned about offshore trading in derivatives based on Indian securities.

Trading volumes "have reached large proportions in some of the foreign jurisdictions, resulting in migration of liquidity from India, which is not in the best interest of Indian markets," they said in a statement late Friday.

Singapore accounts for a significant portion of offshore trading in Indian derivatives -- such as stock futures -- along with Middle Eastern finance hub Dubai, home to a large Indian diaspora.

"Whatever licensing fees [Indian exchanges] were getting from the Singapore exchange, they must have realized that if these volumes come through their own exchange they can make much more money," Pankaj Agarwal, director for institutional equities at investment firm Ambit Capital, told CNNMoney.

"It's a financial decision from the NSE's perspective," he added.

Related: India is hiking tariffs on iPhones

Trading in India's Nifty index futures accounted for about 12% of total SGX derivatives volume in the first half of the current fiscal year, said Krishna Guha, an analyst at Jefferies. The Singapore exchange received about 40% of its revenue from derivatives during that period, he wrote in a research note on Monday.

The SGX, which has been listing data from India's National Stock Exchange since 2000, sought to reassure investors using its platform.

"We will take all measures to maintain orderly trading and clearing of SGX India equity derivatives for our global clients," the exchange said in a statement on Sunday.

Trading in Indian equity derivatives would continue until at least August 2018 under its current licensing agreement, the SGX said.

"The termination of this license is not expected to have any material impact on SGX's immediate financial results," it said, adding it planned to launch new India products shortly.

-- Daniel Shane contributed to this report