India to Ease Digital Trade Curbs in US Talks

February 10, 2026February 10, 2026

India’s digital trade stance is set for a reset under the interim US-India trade framework. As part of the agreement, India has agreed to ease digital tax measures. Additionally, it will negotiate bilateral rules to reduce barriers for American technology companies, according to a White House fact sheet.

The release stated that India will remove its digital services taxes and work towards a robust digital trade framework. This framework will address discriminatory or burdensome practices. This also includes discussions on prohibiting customs duties on electronic transmissions.

One of the biggest concerns for US Big Tech firms had been India’s 6% Digital Services Tax, also known as the Equalisation Levy. This tax was imposed on payments made by Indian companies to foreign digital service providers. This levy was removed in April 2025 in the previous Budget.

Another contentious measure was the 2% Equalisation Levy on foreign e-commerce companies such as Amazon. It was introduced in 2020 on sales to Indian residents. This levy was repealed in August 2024.

The White House release signals a broad consensus on preventing similar digital taxes in the future.

Customs Duty on Digital Goods

India has also agreed to negotiate its long-standing position at the World Trade Organisation (WTO) regarding customs duties on digital goods.

Currently, a WTO moratorium prevents countries from imposing customs duties on electronic transmissions. India had earlier supported the idea of imposing such duties on products such as movies, music, e-books, software, and digital subscriptions. However, under the new framework, India has agreed to hold talks on rules that would prohibit such customs levies on digital goods.

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