New Delhi:
US President Donald Trump’s “US First” policy is once again in the news. Trump is taking decisions one after the other. The latest case is about digital service tax. Trump has said that we will impose counter -fees soon. He said that retaliation means that they charge us, we will pay for them. This is very simple. Any company or country, such as India or China or any other … whatever they charge, as much as they charge. We want to be fair.
What is digital tax?
The Government of India implemented the Digital Services Tax in the year 2020. Under this, foreign tech companies, such as Google, Facebook and Amazon, have to pay 2% tax on income from their digital services in India. This rule applies to companies whose global income is more than Rs 2 crore. Its purpose is to collect proper tax from digital companies doing business in India. But Trump considers it to be “discrimination” against American companies and is demanding to eliminate it.
What is the statement of Trump?
Donald Trump has announced to tighten business policies with many countries after becoming President again. He has warned countries including India which tax American companies. Trump says that if these countries continue tax then America can impose counter -tariffs on Indian goods. Even in his first term, the US trade representative started an investigation into tax on American companies in the rest of the countries.
What will be the impact of Trump’s policies on India?
- Business relations will have an impact: America has been the largest business partner in India. If Trump increases the tariff, drugs, clothes and software like Indian exports can be expensive.
- IT sector of India can be damaged: India’s IT industry is dependent on the American market. The people have been getting employment in this sector. If Trump takes such steps, then India can suffer a big loss.
- Economy will affect the economy: The pressure on the rupee may increase and the Indo-US trade balance may deteriorate. India’s economy may be shocked.
- Strategic relations will also affect: Despite the partnership against China, Trump’s profit-focused policies can become a challenge for India. This is going to affect India and America relations in other areas including defense.
What do experts say?
Some experts believe that Trump’s threats can harm both countries, because America is also dependent on imports from India. In such a situation, diplomacy can be the way. It is not easy for any country of the world to ignore a big market like India or to run on its own terms.
What is the way in front of India?
India’s hopes are on the strong relationship between Trump and PM Modi. The question before the Government of India is now the question whether the digital tax should be continued or it should be changed under the pressure of Trump. However, it will not be easy for America to take any big step in the place where India and America have reached the relationship in the last 2 decades. At the moment, the eyes of the country are based on the strategy of both the leaders- Trump and PM Modi.
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