The US-India strategic and partnership forum applauded the Union Budget -2024-25 for abolishing the Angel tax for all investor categories and cutting down the rate of taxes for the foreign companies up to 35 percent. It cheered the decision of Indian government by saying that this proposal remarks the landmark move in the landscape of Indian startups. 

By congratulating the decision of reducing tax rates for the foreign firms, USISPF states that this action generates a balance between the in-country and foreign players and will be an prominent fuel for international investors looking for shifting their global supply chains out from China. 

In the meantime, the duty tax cuts on vital imports including medical equipment, mobile phone and chargers, solar energy machinery will improve the local manufacturing competences and augment the efficiencies of supply chains which are important for industrial growth if India, USISPF added. 

Noticing that the Union Budget of Modi – 3.0 forays a fine parity among the comprehensive financial prudence and growth-resulting measures and initiatives nurtures both the consumers at home as well as foreign financial backers with phases to amplify the ease of doing business and trade in India.

It greeted the major measures to escalate the financial industry’s competence and transparency such as founding a vision and strategy for financial sector, taxonomy for ESG financing and interpretation of FDI regulations. 

The US India Strategic and Partnership Forum stated, “India has long been a country of engineering and tech talent, yet there have been gaps in the innovation ecosystem. The abolition of the angel tax across all investor classes marks a landmark reform benefiting India's startup ecosystem. This important reform will stimulate increased startup funding from both domestic and international sources”.

Further it added, “With regards to digital taxation, the removal of the equalization levy and ongoing reforms aimed at fair taxation practices for non-resident digital companies reflect India's proactive adaptation to the digital economy. Moreover, the budget introduced significant reforms in transfer pricing regulations, including streamlined assessment procedures and an expanded scope of safe harbors, which will enhance transparency and fairness in cross-border transactions. These reforms not only promote compliance but also reduce tax disputes, fostering a favorable environment for business operations in India”. 

Gunjan Agarwal, Co-founder of XYST says, “Abolishing Angel Tax will have a long-term impact on startup founders. This will not only motivate angel investors but also help to encourage entrepreneurial spirit in the Indian business domain. Additionally, the job generation push, coupled with the government’s financial assistance will help startups acquire more talented professionals, leading to cumulative growth in the long term. This Union Budget is full of opportunities for Indian startups pushing to become the next Unicorn, and governmental assistance is bolstering it to ensure success and growth”.

Similarly, Ratna Mehta - Managing Partner, Fundalogical Ventures states, "Abolition of angel tax will provide a boost to the budding Indian startup ecosystem. It will encourage the flow of capital without tax leakages, especially relevant at a time when the funding crunch is impacting startup liquidity. It is key to establish India as an innovation hub and leader vs follower for new and breakthrough ideas. Focus of the budget is on sustainable growth with employment generation, of continuity and stability. The changes on the capital gains tax structure was unexpected, especially during a time when the fiscal position of the economy seems to be in check.

The logistics and supply chain is the lifeline of India's growth story. The budget's identification of infrastructure, manufacturing, and skilling as key areas for long-term development and subsequent allocation is a step in making India the logistics and manufacturing powerhouse of the world. As a fund focused on investing in supply chain and logistics, we are bullish on backing innovative entrepreneurs building the support ecosystem of India's supply chain. The government's move to set up E-commerce export hubs to be set up for enabling MSMEs to export their local products is a huge step in the direction of driving growth through innovation and building on new-age trends to drive MSME growth.