Wall Street Journal: “A group of international trade and industry associations claiming to represent some 250,000 companies have written to Prime Minister Manmohan Singh strongly criticizing the proposal, tucked away in the budget, to tax transactions potentially as far back as 1962.
“This is now prompting a widespread reconsideration of the costs and benefits of investing in India,” the letter said, adding that confidence in doing business here has been undermined. Hello China, Brazil, and Indonesia in other words.
The controversial proposal, which would impose tax on the exchange of an Indian asset by two companies outside India, already has sparked howls of protest among foreign companies. It would reverse a recent Supreme Court ruling on the issue in favor of Vodafone Group PLC of the U.K. and be retroactive in its impact. It would potentially affect hundreds of corporate acquisitions. Many foreign companies say they now feel singled out for financial punishment as the government seeks to narrow its troublingly high fiscal deficit.”
via Trade Groups: Foreign Firms Giving Up on India – India Real Time – WSJ.
It seems that India has acquired the habit of shooting itself in the foot now and then. This is one of these occasions.
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- India Foreign Trade Data (February 2012) (awardz.wordpress.com)
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