Big Tech Sees Limited Gains as India Scraps Google Tax

The move marks a win for Big Tech in India and opens up domestic market to foreign firms

- Shouvik Das

India's impending move to abolish the 'Google tax' is unlikely to be a significant gain for America's Big Tech giants such as Google's parent Alphabet Inc. and Meta Platforms Inc. However, the move is being widely viewed as an in-principle victory for Big Tech in India, while opening up the domestic market to more foreign e-commerce and small advertising firms.

India's decision to scrap Google tax from 1 April is also likely meant to demonstrate to US President Donald Trump that India is serious about addressing pain points in bilateral trade relations, and to extract concessions on reciprocal tariffs.

New Delhi introduced the 6% equalization levy in 2016 to ensure that foreign tech giants earning huge sums in India contributed proportionately to the government exchequer. Meta and Alphabet senior executives, however, pointed out that the levy was already inapplicable at large on how the platforms sell online advertisements in India.

"The levy is only applicable if a foreign, non-permanent entity sells online advertisements in India. For Meta, for the past two fiscals, online advertisements across platforms were being sold and billed by Meta India Pvt. Ltd, which ensured that while we fall under the purview of India's corporate taxes, the additional levy on offshore entities was no longer applicable to us," a senior executive at Meta India told Mint.