India’s ‘Google Tax’ move a sneak peek into tariff quagmire as it offers one sacrifice after another to appease White House's 'angry god'

Donald Trump’s “Liberation Day.” In India, which keeps getting pilloried by the US president as an exemplar of bad behavior in trade, the reciprocal tariff announcement of April 2 has acquired a fervent overtone. In preparation, New Delhi is offering one sacrifice after another, hoping that the angry god of the White House will let it go with nothing more serious than a slap on the wrist.

The latest peace offering is the decision to do away with a 6% tax on ads that local businesses place with foreign search engines, social media and e-commerce firms. This is Prime Minister Narendra Modi’s way of telling Trump, “Look, we aren’t China. Not only do we allow Alphabet Inc. and Meta Platforms Inc. to hog our digital-advertising pie, if you want us to make it cheaper for them to operate, that’s fine, too.”

Also Read: India open to clearing import duty hurdle for US auto parts
The sacrifice is a win for Trump, though it isn’t much of a loss for Modi. Known colloquially as the “Google Tax,” the levy was a bad idea when it was introduced in India’s 2016 budget. Since then, domestic advertisers have had to withhold 6 cents on the dollar when they get their bills from places like Ireland, where online platforms typically book their revenue.
Just like Trump’s tariffs will be mostly paid by American consumers, the burden of the so-called Indian equalization levy had to be absorbed not by the tech platforms, but by the advertisers. It pushed up costs for local businesses. Where would they advertise, if not on Google or Facebook?

Live Events

Trump announces reciprocal tariffs, says India has more tariffs than any other country

Big tech’s refusal to pay its fair share of taxes was — and continues to be — a