If ending Google Tax is quid, what is quo, for which quid is being given away?

Subscribe to enjoy similar stories. Whether giving up the Google Tax will get India reprieve in the tariff war that US President Donald Trump has promised to unleash on the world at large remains to be seen. The Google Tax, officially, an equalization levy on foreign service firms, does not generate much revenue.

The tax, levied at the rate of 6% on the gross digital advertising placed by Indian entities on platforms owned by the likes of Google, Meta, and Amazon, has yielded less than ₹3,500 crore so far this year, according to a news report. It eminently qualifies as an expendable pawn in a game of high-stakes chess you’re playing against a much more powerful opponent. Sacrifices are an integral part of the game, provided there is a strategic game plan that gives you advantage, after you give up carefully chosen pieces.

In all fairness, we cannot expect the government to disclose its negotiating strategy even as vital talks are underway with the US administration on avoiding the reciprocal tariffs the Trump administration has said it would levy on India, as well as on other countries, come 2 April. The public at large will get to know only later, if giving up the tax, which previous US administrations have objected to, as well, has been made in vain or not. India is not the only country levying the a Google Tax.

As many as 18 countries levy a so-called digital service tax on companies that generate revenue from a jurisdiction without necessarily being physically present in the jurisdiction. Most of such remote service providers are American tech giants, which create subsidiaries in low-cost jurisdictions to sell advertisement slots to companies around the world. These tech giants end up hoovering up revenue from a host