The Indian government has proposed a series of tax concessions through the Taxation and Other Laws (Amendment) Bill, 2026 to attract more foreign investment and strengthen India’s position as a global business destination.

The proposed measures cover sectors such as electronics, data centres, fund management and diamond trading.

One of the biggest proposals is to simplify tax rules for offshore investment funds. Under the draft amendments, overseas funds will be able to appoint India-based fund managers without automatically becoming liable for Indian taxes, provided they meet certain safeguards. The move is expected to encourage more global asset managers to operate from India.

The Bill also proposes extending tax exemptions for foreign companies supplying machinery to electronics contract manufacturers until 2041. The change is expected to benefit companies involved in manufacturing mobile phones, laptops, tablets, wearables and other electronic devices, while supporting India’s ambition to become a global electronics manufacturing hub.

In another key proposal, the government plans to provide a 15-year tax exemption for eligible foreign diamond traders operating in notified trading zones. It has also suggested easing tax conditions for foreign companies involved in data centre infrastructure, making it easier for global firms to participate in India’s fast-growing digital economy.

The proposed reforms come at a time when India is looking to attract stable long-term foreign capital amid global economic uncertainty. By simplifying tax rules and offering sector-specific incentives, the government aims to improve the ease of doing business and encourage fresh investment across high-growth industries.

If approved by Parliament, the amendments could strengthen India’s appeal as an investment destination while supporting manufacturing, exports and employment over the long term.

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