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India to Scrap 6% Digital Ad Tax, Easing U.S. Trade Tensions

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India has decided to remove the 6% digital advertising tax, known as the equalization levy, easing concerns for U.S. tech giants like Google, Meta, and Amazon. The finance minister’s announcement on Tuesday comes in response to trade concerns raised by the U.S., particularly after President Trump threatened reciprocal tariffs from April 2.

The change will take effect from April 1, as part of amendments to the 2025 Finance Bill, which were approved by the Indian parliament. The 6% levy targeted online advertising services provided by foreign companies, requiring them to withhold and remit taxes to the Indian government. The U.S. Trade Representative (USTR) had criticized this tax as discriminatory, noting that domestic companies were exempt from it.

The decision follows a trade agreement made during Prime Minister Narendra Modi’s visit to the U.S. last month, aiming for $500 billion in two-way trade by 2030. India previously abolished a 2% levy on non-resident e-commerce firms for online services in 2024.

This move is seen as an effort by India to ease trade tensions with the U.S., signaling a possible shift in diplomatic relations, although analysts remain cautious about whether it will lead to a softening of the U.S. stance.

OpenAI and Meta in Talks with Reliance for AI Partnerships

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OpenAI and Meta Platforms have reportedly held separate discussions with India’s Reliance Industries regarding potential partnerships to expand their artificial intelligence offerings in the country, according to a report from The Information on Saturday.

One possibility under consideration involves a partnership between Reliance Jio and OpenAI to distribute ChatGPT in India. Additionally, OpenAI has reportedly discussed lowering the subscription price of ChatGPT to a few dollars per month, although it is unclear if this price reduction is part of the talks with Reliance.

Reliance Industries is also exploring selling OpenAI’s models to its enterprise customers via an application programming interface (API) and has discussed hosting and running OpenAI models locally to ensure data from Indian customers remains within the country. The conglomerate has expressed interest in using a planned three-gigawatt data center, which would be the largest in the world, located in Jamnagar, Gujarat, to run both OpenAI and Meta’s AI models.

Meta has declined to comment on the report, and neither OpenAI nor Reliance have provided immediate responses.

Reliance Industries, led by Mukesh Ambani, is one of India’s largest conglomerates, with operations spanning petrochemicals, refining, telecommunications, retail, and green energy.

X (Formerly Twitter) Sues Indian Government Over Expanded Censorship Powers

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In a new escalation of its legal dispute with India’s government, X, the social media platform formerly known as Twitter, has filed a lawsuit against the Indian Ministry of Information Technology (IT). The platform argues that the government’s expansion of censorship powers has unlawfully facilitated easier content removal, giving “countless” officials the authority to block online content without adequate legal safeguards.

The lawsuit, filed on March 5, claims that the Indian government has launched a new website through the Ministry of Home Affairs that allows government departments to issue content-blocking orders without stringent oversight. X argues that this mechanism bypasses the legal protections previously in place, which required content removal orders to be made only in cases of harm to national sovereignty or public order and were subject to the scrutiny of senior officials.

X’s legal team contends that the new website has created an “impermissible parallel mechanism” for censorship, allowing for “unrestrained censorship of information” within India. The platform is seeking to have the directive quashed in court.

This filing is the latest chapter in the ongoing conflict between X and Prime Minister Narendra Modi’s administration. In 2021, the platform was involved in a standoff with the Indian government over its refusal to comply with orders to block tweets related to a farmers’ protest against government policies. Though X eventually complied with these requests after facing public criticism, the legal challenge surrounding these decisions continues.

The case was briefly heard by a judge in the High Court of Karnataka state earlier this week, but no final ruling was made. The court is scheduled to hear the case again on March 27.