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Mint Mumbai
|March 26, 2025
India's move to withdraw its 'Google tax' is probably an attempt to soften US tariff blows but our principled advocacy of fairly split taxes on multinational companies mustn't flag
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India's government seems set to drop its 6% equalization levy on online advertising services rendered to Indian advertisers by offshore digital businesses. This so-called 'Google tax-since it impacted this US-based web-search company perhaps the most, though also others like Meta and Xwas introduced in 2016, but is abruptly being withdrawn just days before US President Donald Trump's reciprocal tariffs go into force from 2 April. What this move is expected to yield, however, remains unclear. As a giveaway to US Big Tech firms that make money off India's market through borderless operations, the purpose might be to show flexibility in trade talks with America, expected to revolve around business interests. But are we giving up too much too soon? This would not be India's first concession. In August, New Delhi axed a 2% levy on e-commerce transactions, while the Union budget for 2025-26 slashed import duty on high-end vehicles that Trump is known to bat for. Given the US president's latest threat to erect steep import barriers against any country
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