After accounting for surcharges and taxes, India’s tax rate comes to 25%. He pointed out that India offers numerous benefits that can reduce the effective tax rate for foreign companies.

Riaz Thingna, partner at Grant Thornton Bharat, points out that investments are primarily driven by business opportunities and profits, with taxes acting as a sweetener.

While the potential move by the United States to lower corporate tax rates will require an overhaul of India’s corporate tax policy, Thingna points out that India’s ambitious infrastructure capital investment and fiscal prudence will limit its ability to cut ease tax rates.

To continue to attract FDI, India can consider moderate and gradual tax rate reductions, while ensuring stable and predictable tax policies, faster dispute resolution and reduced complexity of tax administration will play an even greater role in attracting investment, he said.