In a bid to support the Indian economy hit hard by the novel coronavirus pandemic, the government is planning to offer tax exemptions to companies bringing in fresh investments.
The trade ministry has reportedly proposed a 10-year full tax exemption to companies investing upwards of $500 million. The proposal is being evaluated by the finance ministry, sources told Bloomberg.
To avail the tax exemption, companies must commence operations within three years from June 1. The plan will cover sectors including medical devices, electronics, telecom equipment and capital goods.
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Another variant of the plan proposes a four-year tax holiday for companies that invest $100 million or more in labour-rich sectors like textiles, food processing, leather and footwear. Moreover, a lower tax rate of 10 percent has been proposed for the next six years. The benefits would be in addition to the existing incentives offered by the government.
The Bharatiya Janata Party-led central government is offering multiple benefits to woo investors to India. From offering easily accessible lands to tax breaks, the government is trying hard to lure investors leaving China.
Also read: Coronavirus pandemic | Govt working on several initiatives to attract investors
The trade ministry has identified top 50 industry clusters to upgrade their existing infrastructure, testing labs and R&D facilities, the article quotes sources as saying.
Due to the COVID-19 crisis, many companies are looking to reduce their dependency on China and set up manufacturing facilities in other countries.
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