The Transfer Pricing Problem in India

Transfer pricing is the price at which two companies that are related transfer goods or services to each other. In an era of globalization where companies have a sprawling web of subsidiaries peppered across the world, such transactions between related parties are quite common. Almost every country has now established regulations around transfer pricing when it comes to these entities. India too has an official transfer pricing rule that came into effect in 2001. By 2012, there were 3,500 transfer pricing cases stuck in a dispute.