American companies want a stable taxation regime: officials

US companies want a stable taxation policy in India before they pump more money into the country, said senior officials from the US trade department.

In a bilateral meeting between officials of the two countries on encouraging investments in the manufacturing sector, the US said that the biggest deterrent for American companies making investments in India was the non-transparent and unpredictable taxation regime.

“We were told that almost all US companies that have invested in India faced one taxation issue or another because of lack of transparency,” an official from the Department of Industrial Policy & Promotion (DIPP) told BusinessLine .

US-based e-commerce company Amazon was recently in trouble with the Karnataka tax authority, which had objected to third-party merchants storing goods in their warehouses. American transport services provider Uber, which operates in several Indian cities, has also recently come under the lens of the Tax Department for not paying any service tax.

The meeting was co-chaired by Deputy US Trade Representative Robert Holleyman and DIPP Secretary Amitabh Kant.

India said US investors would be much better off shifting their investments from China to here as it was a cheaper and easier destination. Investments were invited in the smart cities planned by the Government and in industrial corridors.

Officials said that pharmaceutical companies should invest in research and development in the country to produce medicines of relevance to the region. “They should sell the medicines cheap in India and export at higher prices,” the official said.

India also called for according adequate security to traditional knowledge and ensure that it was not usurped by unscrupulous entities.

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