India’s Advance Pricing Agreement (APA) program, introduced in 2012, has seen significant growth in recent years. In FY 2023-24, India signed a record 125 APAs, a 31% increase from the previous year, bringing the total to 641. This program helps multinational corporations (MNCs) by providing tax certainty and reducing disputes over transfer pricing, thus preventing revenue erosion. The majority of agreements were for IT, banking, insurance, and engineering sectors. India also achieved its highest number of bilateral APAs, signing agreements with countries like the US and UK. The program’s success is reflected in reduced compliance costs and assured revenue, underscoring its role in stabilizing the tax landscape for foreign investors.
