Pillar Two must Align with India's FDI Vision

Foreign Direct Investment (FDI) is one of the compelling needs of a developing economy.

One of its key achievements of Hon’ble Narendra Modi government is that more than 50 percent of the FDI India has received since 2000 has come in the Modi years.

Even higher-tax countries, like India, are not spared from the potential effects on investment caused by the introduction of the Pillar Two minimum tax rate and need to be cognisant of all impacting variables.

The diversity of tax incentive systems implies that the impact of the Pillar Two reform will fall unevenly across countries and MNEs. Hence, India will have to analyse the impact of Pillar Two implementation individually, desist from relying entirely on the collective global studies and refrain from guesstimates.