Parimatch Highlights Tax Challenges Blocking India’s Investment Growth Compared to China
CEO Insights reports that while India aims to catch up with China in investment, numerous obstacles are holding back its full potential. High tax burdens, inadequate intellectual property protection, and over-regulation make it nearly impossible for companies to successfully enter the Indian market. Well-known firms such as Tesla, Nokia, Parimatch, Foxconn Group, and Wistron Group have all experienced these challenges firsthand.
Tax Challenges for Foreign Companies
India has the potential to become an economic powerhouse in Asia, rivaling both the United States and China in attracting investment. However, excessive taxation of foreign companies forces businesses like Parimatch to pause or withdraw their investments. Eliminating these barriers could help India become a highly attractive global business destination with a $5 trillion economy by 2027.
Unpredictable Tax Policies
The business environment in India is increasingly hostile toward both domestic and foreign capital. Companies like Tesla and Nokia have faced heavy tax burdens and scrutiny from authorities. The University of Paderborn and the World Bank rank India 53rd out of 100 for tax code complexity and 58th for tax system complexity.
Heavy Tax Burden on Non-Resident Companies
The global minimum corporate tax rate for multinationals with revenues over €750 million is 15%, but India imposes a 30% corporate tax rate on foreign companies—significantly higher than the 23% global average. Adopting electronic tax systems could streamline processes and attract more investment, something that companies like Parimatch are already eyeing closely.
Lack of Intellectual Property Protection
Counterfeiting remains a serious problem in the Indian market. Parimatch, an international betting company without an official office in India, faces active imitation by unauthorized operators. Despite its commitment to investing, paying taxes, and supporting the growth of India’s gaming industry, the lack of strong intellectual property safeguards hampers Parimatch’s efforts.
Exit of Major Players
Due to tax difficulties and weak legal protections, many firms have relocated operations from India to other emerging markets. Foxconn Group and Wistron Group have exited this promising market, while Tesla has delayed its plans due to high taxation.
Vietnam Attracts Diverted Investment
Although India urgently needs capital, foreign direct investment inflows remain below potential, with funds increasingly redirected to Vietnam. Nevertheless, both domestic and international companies—including Parimatch—are ready to invest millions in the Indian economy if the government fosters a more favorable environment for foreign capital.
