New Delhi: India will eliminate the 6 percent tax on digital advertising services, Finance Minister Nirmala Sitharaman announced in a move expected to benefit major US tech firms such as Alphabet’s Google, Meta, and Amazon.
The decision, which takes effect on April 1, aims to address concerns raised by Washington and ease trade tensions between the two nations. The removal of the tax, also known as the equalization levy, follows US complaints that it unfairly targeted American technology companies while exempting domestic firms.
The United States Trade Representative (USTR) had previously labeled the levy as ‘discriminatory and unreasonable.’ Sitharaman introduced the amendment while presenting the 2025 Finance Bill in parliament, where lawmakers approved the new tax measures.
The decision comes shortly after Prime Minister Narendra Modi’s visit to the US last month, during which both countries agreed to work on the first phase of a trade deal by autumn 2025. The agreement aims to expand bilateral trade to $500 billion by 2030.
A US delegation, led by Assistant US Trade Representative Brendan Lynch, is currently in India for discussions with officials. The move to eliminate the levy could contribute to smoother negotiations and strengthen economic ties. Last year, India also scrapped a 2 percent tax on non-resident e-commerce firms for providing online services.
