Amending the retroactive tax law sends a message to traders, says PM Modi

The government’s move to abolish retrospective taxation has given all investors a clear message of determination, Prime Minister Narendra Modi said when urging New Delhi’s overseas envoy to focus on creating new markets for exports from India.

The Prime Minister stressed the importance of business stability. He said the decision to abolish retrospective taxation shows a consistent policy and gives a clear message to all investors that India is not only opening the doors to new opportunities, but that the crucial Indian government has the will to deliver on its promises.

His comment came on a day that Lok Sabha was passing a bill amending the Income Tax Act 1961 that would end the retrospective taxation of capital gains from the sale of assets in India. It was one of the promises the Bharatiya Janata Party made for the 2014 Lok Sabha election when Modi led the party to a landslide victory and assumed the post of prime minister. His government kept the promise seven years later.

The Prime Minister had a virtual interaction with the heads of India’s overseas missions and trade and commerce sector stakeholders. Trade Minister Piyush Goyal and Foreign Minister S. Jaishankar also took part in the interaction. The interaction also included secretaries from more than 20 departments, country government officials, members of export promotion councils and chambers of commerce.

The Prime Minister named four factors that are very important for increasing exports. Production in the country has increased many times over and that must be qualitatively competitive. Second, the problems of transport and logistics for this center should be eliminated, states and private actors must work continuously. Third, the government should stand side by side with exporters, and finally, the international market for Indian products needs to be expanded. He said that only when these four factors work together will India be better able to achieve the goal of Make in India for the world.

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