India, US Turn Corner, Resolve to Close Old Tax Disputes Worth USD 751 Million

Despite the hype of close Indo-US ties, both countries squabble on commercial disputes. Their pendency creates hindrance in making investments and doing business in India. The two countries have now decided to close 100 disputes but there is no word about which side will emerge as the ultimate gainer.

New Delhi (Sputnik) — India and the US have agreed to close more than 100 tax disputes pending since 1999. India's Ministry of Finance says that both countries have resolved the disputes through Mutual Agreement Procedure (MAP) that can be availed by foreign investors. The freshest dispute is five years old.

"66 MAP cases relating to transfer pricing and 42 MAP cases relating to treaty interpretation were agreed to be resolved successfully. The total amount that was locked-up in dispute in these cases is approximately $ 751 million," India's Finance Ministry said in a statement.

Most of the cases involved private companies entangles in transfer pricing, payment of management fees, cost contribution arrangements, engineering design services, contract R&D services, investment advisory, software development and, IT enabled services.

India received $ 17.95 billion in Foreign Direct Investment from the US between April 2000 and March 2016.

India is very cautious about US President-elect Donald Trump approach towards trade relations due to his protectionist promise made during the presidential campaign.