India to scrap digital tax, ease online trade rules

THE US HAS said that India will remove its digital services taxes and negotiate rules that prohibit the imposition of customs duties on digital transmissions.

- FE BUREAU

This detail relating to the digital sector was made public in the fact sheet on the interim trade deal between the two nations, released by the White House early on Tuesday.

The joint statement of February 6 had mentioned that both sides would be addressing discriminatory or burdensome practices and other barriers to digital trade without mentioning the taxes.

India had removed the 6% levy on payments made to nonresident companies for online advertising and the 2% tax imposed on overseas e-commerce companies and streaming platforms in 2025. However, a specific commitment in a trade agreement with the US means it would have to forgo the freedom to reintroduce it for American companies.