August 9, 2017 Read More →

The End of the World’s Most Generous Tax Regime?

In addition to the tax rebate, government policy has been fostering new technology-based industries in other ways. In 2009, the government removed the ceiling on royalty payments and fees for technical expertise, the two major payments made by companies to import technology through licensing agreements. Quantitative restrictions on technology imports had been removed even earlier. This deregulation seems to have encouraged foreign multinational companies to transfer more of their state-of-the-art technologies to Indian firms, even though it could result in higher prices for technology and, thus, increase the cost of technology licensing.

One industry that seems to have benefited from the deregulation of technology imports is solar energy, which is attracting both foreign and domestic investment. Some 40% of the new 250 MW solar tender in Rajasthan in May this year at the Bhadla Phase IV solar park was won by SBG Cleantech, a joint venture between Bharti Enterprises of India, Softbank of Japan and Foxconn of the Taiwan Province of China.(3)

Greater energy efficiency is fostering the development of renewable technologies like solar, wind and hydropower. Indians are now able to store renewable energy for longer, thanks to high-performance LED lighting, technological advances in pumped hydro-storage and the lower cost of lithium ion batteries.(3)

(3) Buckley, Tim (2017) India’s Electricity-Sector Transformation Is Happening Now. Institute for Energy Economics and Financial Analysis, 17 May.

The end of the world’s most generous tax regime?

Posted in: IEEFA In the News

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