THE IMPACTS OF TAX INCENTIVES IN ATTRACTING FOREIGN DIRECT INVESTMENT IN INDIA

  • Unique Paper ID: 169475
  • Volume: 11
  • Issue: 6
  • PageNo: 1085-1090
  • Abstract:
  • This research paper examines the influence of tax incentives on FDI inflows into India. It looks at the ways through which tax incentives are derived, such as tax holidays, exemptions, and deductions, and their effectiveness in attracting FDI. Foreign Direct Investment has become one of the key growth and development drivers in India. The Indian government has widely used tax incentives in a bid to attract FDI and encourage investment in certain sectors. Through literature reviews and empirical data analysis, this paper unravels the level of effectiveness of different tax incentives - tax holidays, exemptions, and deductions-for the inflow of FDI into India. The findings are that tax incentives are significant to attract FDI, and the need is more specifically in high growth potential sectors. It should be ensured to be well-designed and implemented so that unintended consequences do not arise and they effectively serve their purpose. The paper concludes that the balanced approach combining tax incentives alongside other policy measures should be formulated for a conducive investment climate that attracts sustainable FDI.

Cite This Article

  • ISSN: 2349-6002
  • Volume: 11
  • Issue: 6
  • PageNo: 1085-1090

THE IMPACTS OF TAX INCENTIVES IN ATTRACTING FOREIGN DIRECT INVESTMENT IN INDIA

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