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USISPF proposes key tax reforms for India’s 2025-26 budget
According to USISPF, the reforms are essential for positioning India as a leading global economic player, aligning with the government’s vision of becoming a $5 trillion economy.
USISPF / Image- USISPF
As India prepares for its Union Budget 2025-26, the US-India Tax Forum, a key advocacy platform under the US-India Strategic Partnership Forum (USISPF), has outlined a series of recommendations to boost the country’s economic competitiveness.
These recommendations, presented to the Ministry of Finance, focus on simplifying tax policies, attracting foreign investment, and driving growth in critical sectors such as manufacturing, healthcare, and renewable energy.
PRESS RELEASE
— US-India Strategic Partnership Forum (@USISPForum) January 15, 2025
As India gears up for the Union Budget 2025-26, the US-India Tax Forum—USISPF’s dedicated tax policy group—has submitted a comprehensive set of recommendations to bolster India’s global economic competitiveness.
USISPF extends its sincere gratitude to the… pic.twitter.com/MTllDYwfDT
The Tax Forum, representing over 200 member companies, highlighted the need for significant reforms in direct and indirect taxation. Among the key proposals are the simplification of the Tax Deduction at Source (TDS) regime, aligning foreign bank taxation with domestic rates, and introducing a concessional 10 percent tax rate on dividends for Foreign Portfolio Investors (FPIs). The Forum also proposed tax exemptions for shareholders in GIFT City to enhance its appeal as a global financial hub.
In the healthcare sector, the recommendations call for reduced tariffs on life-saving drugs and continued exemptions for certain medications under Patient Assistance Programs. For renewable energy, the Forum suggests targeted incentives for manufacturers and support for electric vehicle adoption to drive sustainability and innovation.
Tarun Bajaj, chairperson of the US-India Tax Forum, emphasized the importance of these measures. "The Union Budget 2025-26 is a critical opportunity for India to enact bold reforms that simplify the tax structure, boost investor confidence, and promote sustainable growth across key industries," Bajaj said.
The recommendations also focus on streamlining the customs tariff structure to a three-tier system to align with international standards and enhance competitiveness in sectors like electronics manufacturing. In addition, the Forum proposed modernizing tax policies for digital economies, including simplifying tax return forms for foreign companies and introducing refund mechanisms for the Equalisation Levy.
USISPF stressed that these reforms are essential for positioning India as a leading global economic player, aligning with the government’s vision of becoming a $5 trillion economy.
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