Row over levies on digital economy firms threaten to derail India-US ties

A tussle between India and the US over an emerging area of corporate taxation is expected to play out in the coming months as the US elections, the pandemic and fiscal stress of governments impact negotiations for a new global order in taxing tech giants, said experts.

With the talks on a more equitable global tax rules covering mostly US tech giants still inconclusive, countries, including India, have been taking unilateral steps that have pitted them against Washington.

India ran into a US trade probe earlier this year after New Delhi, like many European nations, including the UK and France, went ahead with a plan to step up taxes on offshore digital economy firms which access a local consumer base electronically.