India's technology sector calls for fairness in global tax and AI regulations

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Technology sector tax and AI regulations

Highlights

Finance Minister Nirmala Sitharaman said at the 7th Global Fintech Fest 2026 that technology companies cannot avoid tax obligations in foreign markets and that the technology sector needs fairness in regulation.
Sitharaman proposed the idea of a federated industry forum that would help Indian tech companies reduce cross-border regulatory burdens, commercialize intellectual property and enter new global markets with confidence.
India's first tokenized corporate bond pilot was completed under the SEBI Regulatory Sandbox, with REC Limited settling the bond using the digital rupee, alongside a call for the RBI to advance its wholesale and retail CBDC pilots.

This article was translated from the original. Read the original version by our correspondent here.

Focus on cross-border regulations and tax obligations

According to Forbes India, Sitharaman said at the 7th Global Fintech Fest 2026 that technology companies cannot pay taxes in one place and avoid obligations in other markets, and must treat the jurisdictions where they earn profits fairly. She said companies should treat customers well, meet local tax obligations and give something back to the social framework that enabled their growth.

The finance minister said India's rapidly globalizing tech sector is now facing structural challenges, where products built in Bengaluru run on overseas infrastructure, use AI models developed in the U.S., serve customers in Singapore and record revenue elsewhere. According to her, technology moves instantly across borders, but regulation does not, forcing emerging companies to navigate the complex patchwork of rules in different countries on their own.

To reduce this burden, Sitharaman proposed the idea of a federated industry forum that could give India's technology ecosystem a collective voice internationally. According to her, such a forum could engage with foreign governments and regulators before rules become barriers, promote interoperable standards, share cybersecurity best practices, and help Indian companies commercialize intellectual property and enter new markets with greater confidence.

AI safety, the fintech framework and the digital rupee

Sitharaman also issued a broader warning on artificial intelligence, saying it is unsustainable to leave the risks of AI development to society. Referring to growing concerns this week over global security issues, such as the use of agentic AI in attacks on countries and the electoral influence potential of large language models, she asked who would take responsibility for reassuring the public in the global AI industry.

She said institutions should not treat AI solely as a matter for technology teams; boards and senior management must understand where AI is being used, what data it is based on and where failures may occur. She stressed that AI can support decision-making, but accountability must remain human and institutional, while higher-risk uses require stronger review, explanation and appeal mechanisms.

On fintech regulation, she referred to the RBI's light-touch regulatory approach that should not impair innovation capacity. In this regard, the RBI on Thursday recognized the Unified Fintech Forum as an additional self-regulatory organization for the fintech sector under its SRO-FT framework, while the FinTech Association for Consumer Empowerment is already part of the framework.

On financial market infrastructure, Sitharaman said REC Limited's pilot of India's first tokenized corporate bond was completed this week under the SEBI Regulatory Sandbox, with the bond and digital rupee settled simultaneously. She urged the RBI to continue building on its wholesale and retail CBDC pilots and further strengthen the capabilities of the digital rupee as tokenization gains momentum globally.

The Nifty AI Catalysts Index launched by NSE Indices Limited is designed to track the performance of companies providing infrastructure and services that enable India's AI economy. Our previous report discussed its composition—free-float market-cap-based weighting, a maximum stock weighting of 3%, and semiannual reconstitution and quarterly rebalancing—as well as its potential benchmark role for passive investment products such as ETFs and index funds.

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