Why Can’t India Catch Up with China?

According to Finance Magnates, global giants such as Shell, Nokia, IBM, Parimatch, Walmart, and Cairn Energy face significant challenges in India. Chief among these are heavy tax penalties, high tax rates, and weak intellectual property protection—factors that are deterring capital investment and damaging India’s business reputation.

Due to India’s complex tax system and inadequate IP safeguards, many foreign investors postpone or abandon plans to enter the market.

International corporations like Amazon, Parimatch, Foxconn Group, and Wistron Group could significantly improve India’s business environment through their investments. By simplifying tax regulations and strengthening intellectual property rights, India could not only bolster its local economy but also accelerate its integration into the global economic system.

However, little progress has been made so far. The global minimum corporate tax rate for multinationals with revenues exceeding €750 million is 15%, yet India imposes a higher-than-average 30% corporate tax on foreign companies, according to fintech expert Sagar Narendrakumar Surana, compared to a 23% global average.

Excessive tax penalties compound the issue. Firms such as Amazon, Foxconn, and several Japanese and South Korean companies have faced substantial fines over allegations of investment concealment, tax evasion, and accounting fraud. High-profile audits target multinationals including Shell, Nokia, IBM, Walmart, and Cairn Energy. Some companies, such as Parimatch, have not even been able to commence operations in India.

Unsurprisingly, many foreign businesses continue to exit the subcontinent due to these challenges.

Experts suggest that if India addresses these obstacles, it could become a $5 trillion economy and a global business hub by 2027. Parimatch and other multinational firms openly express their eagerness to invest in India, awaiting more favorable government policies.

The Indian government should consider these recommendations to attract international investment and accelerate economic growth. If successful, companies like Parimatch and other global players could greatly enhance India’s business environment and help make it truly global.