Fresh thrust: Tax incentives for global electronics majors

In a bid to position India as a global hub for digital infrastructure, advanced manufacturing and high-end talent, the Union Budget has unveiled a raft of tax incentives aimed at foreign companies.

Manufacturing, particularly electronics, has also received a targeted push. The government has proposed a five-year tax exemption for foreign companies supplying capital goods, equipment and tooling to toll manufacturers operating in bonded zones and engaged in electronic goods manufacturing. The incentive will apply for five tax years beginning April 1, 2026, and is aimed at deepening global value chain integration under India’s electronics manufacturing push.

In a significant move to attract global expertise, the Budget proposes exemption of global income — other than Indian-sourced income — for foreign experts who stay in India for up to five years. The benefit will apply to experts who were non-residents in the preceding five years and are working under notified government schemes, offering long-term tax certainty to high-skilled professionals.

The government has also proposed to extend exemption from Minimum Alternate Tax (MAT) to all non-residents who opt for presumptive taxation, aligning tax treatment across categories and easing compliance for foreign taxpayers.

Complementing these tax measures, Finance Minister Nirmala Sitharaman announced a sweeping shift towards trust-based, low-intervention customs processes, underlining that India’s share in global trade was poised for a “major leap” as part of the Viksit Bharat journey.

On the trade front, Sitharaman announced duty-free treatment for fish caught by Indian vessels in the Exclusive Economic Zone and on the high seas, with landings at foreign ports to be treated as exports. The Budget also removed the Rs 10 lakh per consignment cap on courier exports, a move aimed at boosting e-commerce exports by small businesses and startups.