End retrospective tax to attract foreign investment: Amitabh Kant
What's the story
Former NITI Aayog CEO Amitabh Kant has stressed the need for India to end its retrospective tax policy, saying it heavily impacts global investor sentiment. He made the remarks in an interview with Moneycontrol, where he said that "we need policy stability - the tax policy has to be set right." Kant is now a senior adviser at Canadian investment firm Fairfax Financial Holdings.
Foreign investment
Kant calls for 'tax stability' for foreign investments
Kant stressed the importance of attracting foreign capital to India, given that domestic savings aren't enough.
He said the investment-to-GDP ratio needs to be increased to 40% from the current 30% for India to grow at a rate of 9% over the next three decades.
"Attracting FDI needs tax stability," he said, suggesting a time limit of 60 days for advance rulings on specific transactions yet to be taken by businesses.
Legal precedent
SC's Flipkart-Walmart case ruling impacted investor sentiment
In January, the Supreme Court ruled that the capital gains from US investment firm Tiger Global's $1.6 billion stake sale in Flipkart to Walmart in 2018 were taxable in India.
The court said that the transactions were "impermissible tax-avoidance arrangements" and didn't qualify as lawful.
Kant said this case has impacted investor sentiment and stressed on the need to end retrospective tax as a mission for India.
Strategic partnership
Kant on India-China ties
On India's relationship with China, Kant said both countries need to work together in some areas.
He suggested that India should partner with China for component and machinery manufacturing, including critical components like batteries and solar items.
However, he also warned about the potential risks of such collaborations if China were to weaponize these areas.