US' corporate sector has lauded Indian government for substantially slashing income tax rate to 25.17 per cent,. It said  move will reverse ecomic slowdown and will allow global companies a "good option" for growing ir manufacturing base in country. government on Friday slashed income tax rate for companies by almost 10 percent points to 25.17 percent and offered a lower rate to 17.01 percent for new manufacturing firms to boost ecomic growth rate from a six-year low by incentivising investments to help create jobs. Finance Minister Nirmala Sitharaman said reduction in tax rates was done by promulgating an ordinance to an amendment to Income Tax Act.

RE | Corporate tax slashed down to 25.17 pc for domestic companies

US corporate sector hails corporate tax cut

"We laud Government for dressing our longstanding demand for lowering corporate tax rates. move will make Indian companies globally competitive and allow global companies a good option for growing ir manufacturing base in country," Mukesh Aghi, president of US India Strategic and Partnership Forum (USISPF) told PTI. He ded, "This is a welcome step to reverse ecomic slowdown."Aghi said ditional anuncements pertaining to lowering of MAT rate to 15 per cent, n-applicability of buy-back tax on select listed companies and limiting applicability of higher surcharge by making it n-applicable on capital gains on sale of security, including derivatives held by FPIs, will help in re-assuring investors from global ecomies including United States. "USISPF continues to be at forefront in partnering with Government of India towards initiatives like se which enhance ease of doing business in India," he said.

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Indo-US tre relations is mature

Aghi exuded confidence that tre disputes between India and US will be resolved by time Prime Minister Narendra Modi and President Donald Trump meet in New York for second time in three days' time on September 24. "Absolutely", he said when asked if some of tre issues would be resolved. " gap is t that big. I am confident that by time when Prime Minister Modi and President Trump meeting New York, a lot of issues would have been sorted out," he said. Responding to a question, Aghi said sentiment about India among US companies was w more mature and more calculated. "What we are saying is that investment process in India from US companies is t slowing down. In fact, y're looking at how do we have a backup strategy, especially for manufacturing, China plus one strategy. And India becomes one of options," he said. ting that bilateral tre w is USD 142 billion, he said it was experiencing a double digit growth, despite all disputes.

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FDI in India

"US companies are gaining market share in India. Companies such as Google, Facebook, Amazon, WhatsApp, Uber have been shut out of China. So market is open for US companies. US is one of largest FDI investor in India," he said. That momentum will continue especially in light of extremely positive reforms anunced by India today to cut corporate tax rates, Aghi said. "It sends a mess that India is open for business, welcoming to foreign investment and this is a long-term opportunity to continue engment with industry," Aghi said. As India US tre grows and relationship deepens, re will be friction points, re will be disagreements, he ted. But, re is eugh maturity on both sides to sort this out and keep bigger picture in mind to move forward, Aghi said. Applauding Sitharaman for decision, USA India Chamber of Commerce president Karun Rishi said it was a bold, progressive and historic move.

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CSR scope extension

"It signals Indian government's commitment to ecomic growth and its goal of a USD 5 trillion ecomy by 2025," he said. Cutting tax on new manufacturing companies from 25 percent to 15 percent will make India competitive and incentivise setting up manufacturing units in India. This will firmly revive growth and create much needed new jobs, Rishi said. Allowing corporate social responsibility (CSR) spending on incubators or research grants to institutes engd in promoting science research can accelerate invation in India, Rishi said. He hoped Indian corporate sector will use CSR to support basic and early BioPharma research for benefit of 1.3 billion Indians and rest of world.