ThePrint ThePrintPod: India’s myopic view on tax policy hurts FDI. Fix it before it breaks the camel’s back
Jun 10, 2025
The podcast dives into India's drastic drop in foreign direct investment, highlighting a fall from $10.58 billion to $0.4 billion. It explores how recent Supreme Court rulings and global uncertainties are shaking investor confidence. The discussion emphasizes the heavy financial burdens placed on telecom operators due to tax policies and calls for a rethinking of the current tax strategy. It argues for a balanced approach to promote innovation and investment, urging policymakers to avoid inconsistent regulations that could hinder economic growth.
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Sharp Decline in India's FDI
- India's net foreign direct investment (FDI) dramatically dropped from $10.58 billion in 2023 to $0.4 billion in 2024.
- This sharp fall reflects global uncertainty and India's restrictive tax and judicial decisions, worsening business climate.
Tax Policy Affects Investor Confidence
- Stable and predictable tax regimes are critical for investor confidence and FDI inflows.
- Retrospective and dual taxation measures create financial risk and dampen investor enthusiasm.
India's Reactive Tax Reform
- Tax reforms in India usually follow economic crises rather than proactive policymaking.
- Courts increasingly intervene in tax controversies due to flawed policy, risking market stability.