New Delhi: Finance Minister Nirmala Sitharaman on Tuesday introduced the ‘Taxation and other Laws (Amendment) Bill, 2026’ in the Lok Sabha to attract more foreign capital and promote domestic manufacturing by providing a “reliable policy and process certainty”.
The Bill proposes to make it easier for fund managers to relocate to India without the foreign fund being treated as doing business in India.
It also seeks to extend income tax exemption available to foreign companies that provide machinery and tools to an Indian factory that makes specified electronic goods on its behalf under contract manufacturing till 2040-41.
Specified electronic items mentioned in the bill include mobile phones, laptops, personal computers, tablets, servers and their key parts and accessories.
To support component supply for electronics factories, the Bill proposes I-T exemption for 15 years till 2040-41 to foreign companies that store components in customs warehouses to further supply them to a contract manufacturer in India.
The Bill also removes the approval requirements for foreign cloud companies that use Indian data centres.
It also proposes that Indian data centres be run on a leased basis rather than only under direct ownership.
The proposals in the Bill share a single purpose of making India a more attractive and predictable place for global capital, manufacturing and business to come and stay, Finance Ministry sources said.
“India wants global investment funds, cloud businesses and infrastructure investors to route more of their activity through the country. The common thread is to provide reliable policy and process certainty,” the ministry said.
The Bill also seeks to amend the Payment and Settlement Systems Act, 2007, to remove the existing legal provision that prevents banks and payment service providers from charging Merchant Discount Rate (MDR) on notified electronic payment modes.
