India will assess the implications of the United States’ decision to withdraw from the global tax deal, Tuhin Kanta Pandey, Finance and Revenue Secretary, Ministry of Finance, said on Tuesday. 

Speaking at a post-budget meeting organized by industry body Assocham, Pandey emphasized the uncertainty surrounding the deal’s future following the US exit.

“If the US is not into it, it doesn’t work. We have to evaluate,” Pandey said responding to a question from industry on what India proposes to do on the recent Trump Administration’s Global Tax deal exit decision. 

The global tax deal, spearheaded by the Organisation for Economic Co-operation and Development (OECD), is built on two key components—Pillar One, which seeks to reallocate taxing rights for large multinational corporations, and Pillar Two, which establishes a global minimum tax rate of 15 percent. The US withdrawal has raised concerns about the viability of the second pillar, as several jurisdictions had already enacted supporting legislation.

“Now that they (the US) are walking out of it, it will be impractical to implement it,” Pandey noted. 

While India had aligned with the broad global consensus, it had not yet enacted any legislative measures related to the agreement. The country had maintained certain reservations about the deal’s structure and implementation.

“We had some reservations, although we had broadly gone with the consensus. We had not enacted any legislative measures, although some countries had done it. Now that the US has decided to withdraw from the global tax deal, we will have to evaluate what benefits (it brings for India),” he told after the interactive session. 

However, Pandey declined to comment on whether this issue would be part of the agenda during Prime Minister Narendra Modi’s upcoming visit to the U.S. to meet President Donald Trump this month.

The US decision to pull out of the multilateral tax agreement has injected fresh uncertainty into the global tax landscape. Pillar Two was designed to ensure that large multinational companies pay a minimum level of tax regardless of where they operate. However, without US participation, the effectiveness of the framework is in question.

For India, the evaluation process will likely consider the competitive impact of the US withdrawal, potential changes in global investment flows, and the feasibility of implementing the minimum tax in an environment where major economies may not be fully committed.

The Indian government’s cautious approach indicates that it will weigh the advantages and disadvantages before taking any legislative steps. 

Given that some countries have already passed laws in alignment with the global tax framework, the next phase of discussions could determine whether the initiative retains its global relevance or loses momentum, economy watchers sa