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US accidentally added 'Google tax' to its India trade deal factsheet, then deleted it
The 'Google tax' refers to the equalisation levy India introduced in 2016 on payments made to non-resident digital companies for online advertising services.
India had already abolished its 6% equalisation levy on digital advertising, popularly known as the “Google tax”, well before the India–US trade framework was announced, even as an earlier White House fact sheet suggested the move was part of the bilateral deal.
The levy on digital advertising services provided by foreign technology firms was removed through amendments in the Finance Bill 2025, with effect from April 1, 2025. The rollback came nearly 10 months before the trade framework between New Delhi and Washington was unveiled.
The development gained fresh attention after the White House revised its fact sheet on the trade framework, deleting language that said India “will remove its digital services taxes.” The updated version instead says India committed only to negotiate bilateral digital trade rules addressing barriers to digital trade.
Also read: Key revisions made in White House factsheet on US-India deal | What's changed
What is digital levy or Google tax?
The 'Google tax' refers to India's equalisation levy, a tax introduced in 2016 on payments made to non-resident digital companies for online advertising services. Set at 6%, the levy applied to foreign technology platforms earning advertising revenue from Indian businesses even if they did not have a physical presence in the country.
Officials at the time said the withdrawal was aimed partly at easing trade frictions with the United States, which had repeatedly criticised the tax as discriminatory against American tech firms. Industry feedback had also indicated that companies such as Google and Meta were passing on the tax burden to Indian advertisers, raising digital marketing costs.
India had earlier also removed the 2% equalisation levy on non-resident e-commerce operators through the Finance Act, 2024. US negotiators had pushed for assurances that similar digital taxes would not be reintroduced, but Indian advisers cautioned against binding future tax policy in trade agreements, calling it a sovereign prerogative.
