Indian ESOP Taxation in the USA for NRIs & US Residents

Yes, NRIs residing in the USA might be subject to Indian ESOP taxation for NRIs in both India and the United States. However, the double taxation avoidance agreement treaty between India and the USA helps prevent actual double taxation, and you can claim the foregin tax credit in the US for the taxes you have already paid in the United States.

Report the fair market value at vesting as ordinary income on Form 1040, and then the gain or loss on sale as the capital gains on Schedule D/Form 8949.  Additionally, if you have already paid the taxes in India, you can claim the FTC foregin tax credit on Form 1116 and avoid being taxed twice on the same income source.

Yes, Indian companies can issue employee stock options (ESOPs) to their employees overseas.

They are taxed at two stages, at the time of exercise (as a salary prerequisite)and then at the time of sale (as capital gains).