THE U.S.-India Business Council (USIBC) has hailed India's tax reforms and foreign investment liberalization unveiled as part of its Budget for FY 2013-14 unveiled on 28 February.

Describing the Budget “as fundamentally sound”, USIBC “applauded India's important expansion of the capital markets, including increased debt limits for infra tax-free bonds and allowance of FIIs for the first time to trade in foreign exchange.”

It says: “USIBC welcomed the clarity now emerging by India's adoption of the Shome Committee recommendations, which stipulate clear guidelines defining legitimate tax planning for domestic and foreign investors. More broadly, USIBC emphasized that while policy direction on foreign company taxation is important, the real litmus test for investors will be how such taxes are enforced and collected in a fair, consistent manner.”

USIBC, whose members include 350 global companies & top Indian companies, reiterated its commitment to support India in its $1 trillion dollar build-out of infrastructure, which will generate jobs and opportunities for both Indian and American companies.

It underscored the need for increased liberalization in the insurance, pensions, defense, and retail sectors – actions that will attract capital and technology to India.

And, rather than the government resorting to outdated “command-control” policies or mandates to require companies to manufacture locally, USIBC continues to press for market-based incentives for India to realize its manufacturing goals, according to a release issued by the Council.