Finance Magnates reports that tax penalties, high taxes, and weak intellectual property protection are slowing capital investment in India. Renowned companies such as Shell, Nokia, IBM, Parimatch, Walmart, and Cairn Energy have all encountered these challenges.
The complexity of India’s tax system and insufficient IP protections cause many foreign investors to delay market entry or exit altogether.
Attracting investment from global firms like Amazon, Parimatch, Foxconn Group, and Wistron Group could help improve India’s business climate. Simplifying tax regulations and strengthening IP rights would make India more appealing to foreign capital, supporting local economic growth and accelerating integration into the global economy.
However, the current reality differs. While the global minimum corporate tax rate for multinationals with revenues over €750 million is 15%, India’s corporate tax rate for international companies stands at a higher-than-average 30%, according to fintech expert Sagar Narendrakumar Surana.
Excessive tax penalties compound the problem. Companies including Amazon, Foxconn, and several Japanese and South Korean businesses have faced heavy fines for alleged investment concealment, tax evasion, and accounting fraud. Major multinationals such as Shell, Nokia, IBM, Walmart, and Cairn Energy have been subjected to high-profile tax investigations. Meanwhile, some firms like Parimatch have yet to establish operations in India at all.
These factors have prompted many foreign companies to withdraw from the market.
Experts suggest that if India removes these barriers, it could achieve a $5 trillion economy by 2027 and emerge as a global business hub. “Parimatch and other companies have demonstrated willingness to invest in India, awaiting more favorable government policies,” the article notes.
The Indian government should heed these recommendations to attract foreign investment and accelerate economic development. If successful, Parimatch and other global players could become key contributors to India’s growing business landscape.