Indian Publishers Urge Equalisation Levy on Big Tech

Under Indian digital news publishers have called on the government to restore the 6 per cent Equalisation Levy on foreign technology providers, also known as the Big Tech (e.g., Google, Meta, Microsoft). They argue that the elimination of the tax earlier this year has created an unfair competitive advantage towards multinational services, at the expense of the sustainability of local news and the principle of equitable revenue distribution.

What was the Equalisation Levy, and What is 2025

The first step toward the inclusion of the Equalisation Levy (EL) as a tax on online advertising revenue of foreign parties that have no physical presence in India was introduced in 2016. The payment rate of the levy was 6% of the payments an Indian advertiser will make to a non-resident digital advertisement provider, digital advertisement space, or other personalized services.

Online Advertisement services The Indian government removed the 6% EL on online advertisements services in April 2025 as part of the Finance Bill 2025 26. The foreign technologic platforms that offer online advertisement services to the Indian audience will no longer have that levy (effective April 1, 2025).

This non-resident e commerce operator providing digital services to Indian users 2% EL had earlier been abolished in August 2024. Publishers Reason why they want the Levy Back.

Why Publishers Want the Levy Back

The digital news publishers, in their appeal, assert several arguments for reinstating the Equalisation Levy or introducing an equivalent regulatory/fiscal mechanism:

1. Level Playing Field: With the 6% levy removed, so much it favors foreign sites (receiving advertising income in India without such equivalent compliance or cost associated with domestic publishers). According to publishers, this will discourage fairness.
2. Sustainability of Journalism: It is too expensive to produce good news material (staff, infrastructure, editorial management). Another reason as it is stated by publishers is that it cripples their chances of monetizing and continuing in business because of the abolition of the levy. They argue that platforms pool and share news content (only marketing this content through links, snippets and, in some cases, unofficial means such as data scraping), but do not spend on production cost.
3. Anti‑competitive Concerns: Although multiple publishers objected to the unauthorized scraping of their content (particularly by large AI scrapers) and also objected to the dominant role of Big Tech in the online news advertising market. These people believe that these practices introduce unfair advantage and revenue leakage.
4. Policy & Global Precedent: The publishers note that many countries like France, the UK, Italy, and Spain still have in place so-called Digital Services Taxes or other interim taxes before the global tax regime based on the OECD / G20 Pillar One is implemented completely. They are of the view that the increment India has done by lifting the levy leaves domestic publishers in a treacherous position pleasurable to international sites.

Racial motive by government to be removed and Bigger Picture

The following are some of the reasons that the government has cited in repealing the Equalisation Levy:

• Trade and Diplomatic Pressures: Experts say that the removal is partly aimed at easing tensions with the United States over what had been viewed as discriminatory taxation of US tech firms. There had been concerns about retaliatory tariffs imposed by the US.
• Alignment with Global Tax Regimes: India is aligning its taxation with Global Tax Regime, such as the Pillar One solution of the OECD / G20. Unilateral digital taxes are becoming more frequently regarded as short-term until an international agreement is reached on the taxation of digital multi-nationals’ profits.
• Simplification and Reduced Compliance Burden: The However, by eliminating the levy it simplifies the billing processor parameters of the foreign vendors as well as management of the crossing of border transaction principles to the benefit of the advertisers and ad firms, in particularly those located in the smaller segments.
• Revenue Trade‑offs: According to estimations made by the government, the country would incur more than 3000 crores in the fiscal year 2025 in the government exchequer if and only when the 6 percent tax on adverts is currently abolished 26. In 2023, the collections of the levy were about 3,500 crore 24 and in 2024, it was 3,300 crores.

Potential Impacts and Risks

Although lifting of the levy seems to have some advantages, it already creates various threats- particularly to the local digital news publishing sector:

• Revenue Erosion for Indian Publishers: News of Revenue Erosion: In the absence of taxes, Indian publishers worry that many of the small and medium ones will suffer falling advertisement revenues, as Big Tech platforms will be able to lower the prices they pay or control the ad fund deal. The publishers state that these changes may decrease the percentage of advertisement money that is raised by local content creators.
• Competitive Disadvantage: Domestic publishers will face a challenge in competing with international sites that do not just enjoy the benefits of scale but also enjoy the benefits of lower cost structure. The platforms can also use their large user-base and improved ad targeting as well as economies of scale to squeeze local players.
• Dependence on Alternative Mechanisms: The digital publishers seek new regulatory or fiscal intervention – either in EL reinstatement, digital Services tax or in the mandatory sharing of revenues where foreign sites are hosting local content. Otherwise, they risk chronic underprivilege.
• Governance, Legal & Implementation Complexity: In the event of reinstatement, there would need to be explicit regulations of what is meant by using content, the way revenue is computed, the way compliance is achieved. Anti scraping laws, publisher-platform contracting, and disclosure of ad revenues become essential.
• International Trade Risks: Reinstatements may increase the unrest between the government and its domestic stakeholders, especially the US. This can affect the trade negotiations (particularly, those that are to lead to bilateral deals or even WTO or OECD frameworks). Revenge risks could appear once again.

What the Publishers Are Clamoring

The online news publisher community has explicit requests to the government in their representation:

1. Reintroduction of the Equalisation Levy (6%): In their opinion, it would be more just to reintroduce the old levy until global tax reforms are completed.
2. Legislative / Regulatory Mechanisms for Revenue Sharing: Not only direct tax, but also legislation that secures that foreign websites pay to utilize news and use or steal news by means of artificial intelligence, scraping, or links. Probably some requirements to compensate producers of domestic content.
3. Stronger Protection Against Content Misuse: Flash lighting of the illegality of scraping the news by big sites or by AI to use or copy the news without obtaining the appropriate compensation. Publisher would like tougher legal restrictions in case of intellectual property theft.
4. Interim Measures until Pillar One / global tax framework fully operational: Global tax reform has yet to be fully implemented and publishers need some sort of buffer measures or levies to even the playing field during the interim.

Professional Observation and Insider Analysis

1. Ad Agencies & Digital Strategy Experts: Most industry pundits are happy with the exoneration of the levy on simplification of cross border advertising and eradication of pains. They believe that most of the ad expenditure in these systems such as Google, Meta, X etc. will rise since rates will become relatively low.
2. Tax Policy Analysts: There are those that are alarmed by the possibility of government revenue loss due to poor taxation system construction. They view the elimination to be in tandem with ending of trade tensions and implementation of global taxes by India. Nevertheless, they also warn, domestic content producers cannot be left behind.
3. Publishers: It is important to underscore that journalism is a civic commodity and ongoing investment (e.g., fact checking, field reporting) requires stable sources of income. Many people see the elimination of EL as elimination of one of such income streams unless alternatives are offered.

The implication of this in the future

1. Policy Watch: The government can revisit or refurbished versions of tax/levy that focus on content utilization, including/extracting revenue, versus only spending on advertisements. Definite explanations of what can be regarded as platform liability will be very essential.
2. Regulation of Big Tech: In addition to taxation, regulation of the behavior of foreign platforms, particularly in terms of contents aggregation, scraping, AI generated contents, is also likely to increase. Publishing houses will advance tougher IP and licensing laws.
3. Global Agreements: Since the Pillar One / Pillar Two of OECD BEPS (Base Erosion and Profit Shifting) framework come into work, there is a possibility that India will hardly change its tax regulations to prevent the frustrating taxation and international commerce. Publishers then will insist that international accords should contain content creator friendly clauses.
4. Revenue Models for Publishers: To lessen reliance on the revenue collected through advertising, digital news media might need to consider alternatives to traditional speed cash cycle models (such as subscription, paywalls, memberships, direct reader) revenue models and licensing to be distributed to company collaborators.

Conclusion

These tensions are less apparent in the content creators versus aggregators, local versus global, scale versus fairness, content creators versus scale dichotomies, which the Indian digital news publishers call on Big Tech to pay Equalisation Levy. Although ads and worldwide companies receive a transitional respite when the 6% equalisation levy is removed, it creates a loophole that publishing companies feel must be bridged to save the sustainability of journalism.

This gap might be filled within the next few months with policy innovations, either legislative, fiscal or regulatory, that seeks to reconcile global tax norms with domestic media sector realities.