Washington, Feb. 1 (PTI) American companies with a foothold in India and those planning to expand into the world’s fastest growing economy expect ‘tax parity’ in the budget be tabled by Finance Minister Nirmala Sitharaman, the head of an India-focused U.S. business advocacy group said.
Mukesh Aghi, chairman of the US India Strategic and Partnership Forum (USISPF), said American businesses have high expectations for what Sitharaman will present in his fourth annual budget on Tuesday. American companies, he noted, are keen to invest in India as they believe that the fundamentals of the economy remain strong in the country, offer a large market and want to diversify given the Chinese risk factor. .
“They (US companies) are looking at tax parity. For example, e-commerce companies that have an equalization tax, which needs to be removed. They are looking at lowering tariffs. It’s good for India too because domestic companies are becoming much more competitive and efficient,” he told PTI in an interview on Monday.
American companies, Aghi said, are considering more investment in Indian infrastructure. They also want labor laws and the land acquisition process to be streamlined, he observed.
“Because the ease of doing business is always very important in the minds of these investors. They spent a lot of time applying for more land or water, so that needs to be sorted out,” he said. -he declares.
The USISPF chief further said that corporate America, from a long-term perspective, expects the annual budget to “provide a sense of predictability, transparency, and process focus.” These are the critical questions raised in a boardroom when a company plans to invest millions or billions in India, he added.
“I think it’s important that the tax system, for example, doesn’t behave like tax terrorism, but behaves more like tax partners. If you look at any American business right now, there will be some sort of tax issues with the authorities,” he said in response to a question.
Aghi added that it is important that corporate taxes are aligned from a global perspective. They have no additional taxes, which makes the cost of making these companies higher, he said.
He said Sitharaman had been transparent and his confidence had grown in handling the economy and the budget itself.
Asked about the expectations of American Indians from the budget, Aghi said some regulatory and tax reforms related to start-ups in India would help them create a better atmosphere and attract more investment. of the diaspora.
“What we are seeing is more and more Indian Americans funding startups,” he said, noting that India produced 44 unicorns last year and there are more of 10,000 startups flourishing in India.
“It is important to allow these startups to register in the United States because capital and access are very readily available in the United States, so the valuation improves,” he said, adding that tax reform is essential on the options granted to employees. Early taxation of such options makes them less attractive, he argued.
“India has a tremendous success story of startups. It is the third largest ecosystem in the world. improve.
“At the end of the day, startups are job creators and innovators. The combination is critical for India to sustain economic growth of 8.5-9% over the next 10-15 years,” added Aghi.
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