India sweetens tax incentives

India is moving to expand tax incentives for foreign investors and manufacturers as Prime Minister Narendra Modi seeks to strengthen the country’s appeal as a global manufacturing hub.

The proposed measures, which require parliamentary approval, include tax exemptions for foreign investors buying Indian government bonds and protections for offshore investment funds managed from India.

The government also plans to extend tax holidays for overseas suppliers serving India’s electronics industry until 2041, covering products such as smartphones, laptops, tablets and servers.

Additional incentives are expected for data centers and the diamond mining sector.

The tax package is part of New Delhi’s broader strategy to attract investment, boost manufacturing and position India as an alternative to China amid shifting global supply chains.

The proposals come as Parliament faces repeated disruptions over opposition protests, leaving the government with limited time to secure approval before the current session ends on 13 August.