India Implements Strategic Measures to Boost Technology Sector Growth

In a series of initiatives aimed at bolstering its technology sector, India has introduced significant policy changes and witnessed notable corporate developments.

Elimination of Digital Advertisement Tax

The Indian government has announced the removal of a 6% tax on digital advertisements, a move that primarily impacts U.S. tech giants such as Google, Meta, and Amazon. This decision, part of amendments to the Finance Bill 2025, is expected to be approved by Parliament this week and will take effect from April 1. The tax had previously drawn criticism from the United States, which viewed it as disproportionately affecting foreign companies. The abolition of this levy is anticipated to ease trade tensions and foster better relations between the two nations.

Import Duty Exemptions to Encourage Local Manufacturing

In a bid to support domestic production and enhance export competitiveness, India has removed import duties on various goods essential for manufacturing electric vehicle (EV) batteries and mobile phones. Finance Minister Nirmala Sitharaman announced that 35 items related to EV batteries and 28 items pertinent to mobile phone manufacturing would be exempt from import duties. This initiative aims to assist local producers in mitigating the impact of reciprocal tariffs from the United States, set to be implemented on April 2, and is expected to stimulate growth in the technology manufacturing sector.

Wipro Secures Major Contract with British Insurer

Indian IT services firm Wipro has clinched a 10-year contract valued at approximately £500 million ($645.4 million) with British insurer Phoenix Group. This agreement underscores Wipro's expanding footprint in the global technology services market and highlights India's growing prominence in the IT sector.

X Corp Challenges Indian Government's Content Removal Policies

X Corp, formerly known as Twitter, has filed a lawsuit against the Indian government, alleging that the Ministry of Electronics and Information Technology has unlawfully broadened its censorship powers. The company contends that the government's new directives enable officials to order content removal without adequate legal safeguards, potentially leading to unchecked censorship. The case is scheduled for a hearing in the Karnataka High Court on March 27.

OpenAI and Meta Explore AI Collaborations with Reliance Industries

OpenAI and Meta Platforms are reportedly in separate discussions with India's Reliance Industries to establish artificial intelligence (AI) partnerships. The talks include potential collaborations such as integrating OpenAI's ChatGPT into Reliance Jio's services and exploring local hosting of AI models to ensure data residency within India. These initiatives reflect the technology sector's focus on AI and the strategic importance of the Indian market.

Source: Reuters