India to Abolish 6% Digital Ad Tax to Ease U.S. Trade Tensions

India plans to remove a 6% digital advertisement tax affecting U.S. tech giants, hoping to smooth trade relations with the U.S. and advance a trade deal. The digital tax, seen as discriminatory by the U.S., will end, pending parliamentary approval of the Finance Bill 2025.

India is set to eliminate a contentious 6% tax on digital advertisements, which mainly impacts U.S. tech companies like Google and Meta, in a bid to alleviate trade tensions with the United States.

The Indian government plans to abolish this equalisation levy on online services through amendments to the Finance Bill 2025, with parliamentary approval expected soon. The move comes as part of broader efforts to finalize a trade agreement aiming for $500 billion in trade by 2030.

The decision is expected to provide relief to U.S. tech firms and ease concerns over what has been called a 'discriminatory' tax by the United States Trade Representative. Meanwhile, ongoing diplomatic discussions between the two nations continue, reflecting hopes of reduced trade friction.

(With inputs from agencies.)