By Naraway
In this article
On 31 March 2026, India's Central Board of Direct Taxes announced that it had signed 219 advance pricing agreements in the financial year, more than in any year since the programme began. Its later annual report counts 220. Either way, the total passed 1,000.
What Transfer Pricing Covers
Every payment between an Indian company and a foreign group company is a transfer price: the fee a GCC charges its parent, the royalty a subsidiary pays for a brand, interest on a parent loan, or the price of imported components. Indian law requires each to be at arm's length. When the tax department disagrees with the price, it adjusts the Indian company's profit upward.
What an APA Settles
Unilateral APA
Agreed with India's tax department only. 750 signed in total.
Bilateral APA
Agreed with both countries' tax authorities, removing double taxation risk. 284 signed in total; a record 84 in FY26.
FY26's bilateral agreements covered 13 countries, including India's first with France, Ireland, Indonesia and Sweden. The others: the US, the UK, Finland, Singapore, Japan, South Korea, Australia, Denmark and New Zealand.
The Pipeline
Source: CBDT annual APA report FY 2025-26, via A2Z Taxcorp and TaxScan.
The average unilateral agreement took 40.8 months, down from 42.94 the year before. That is the trade: more than three years of negotiation in exchange for certainty on pricing for the years the agreement covers. With 2,117 global capability centres in India, most of them billing a foreign parent, the demand is unlikely to fall.
Part of Naraway's research series India Market Entry in 2026.
In short
Transfer pricing rules require transactions between an Indian company and its foreign group companies, such as service fees, royalties, loans and goods, to be priced at arm's length, as if between unrelated parties. Companies can agree the method in advance with the tax department through an advance pricing agreement (APA). India's Central Board of Direct Taxes signed a record 219 APAs in FY 2025-26, taking the total past 1,000 (1,034 including 284 bilateral). Unilateral APAs took about 40.8 months on average to conclude.
- Record 219 APAs signed in FY26, up from 174 and 125 in the two years before.
- Total APAs: 1,034, including 750 unilateral and 284 bilateral.
- 84 bilateral APAs in FY26, with 13 countries; first ever with France, Ireland, Indonesia and Sweden.
- 215 new applications in FY26.
- Average time for a unilateral APA: about 40.8 months.
Sources
- CBDT signs 219 advance pricing agreements in FY 2025-26, Income Tax Department
- Income tax dept signs record 219 APAs in FY26, Outlook Business
- India crosses 1,000 APA milestone as CBDT signs record 219 agreements in FY 2025-26, TaxScan
- CBDT releases annual APA report for FY 2025-26, A2Z Taxcorp
Frequently Asked Questions
What is transfer pricing in India?
The rules requiring transactions between associated enterprises, such as an Indian subsidiary and its foreign parent, to be priced at arm's length, as if between independent parties.
What is an advance pricing agreement?
An agreement between a taxpayer and the tax department, and in bilateral cases the other country's tax authority, that fixes the transfer pricing method for future years.
How many APAs has India signed?
1,034 in total by FY 2025-26, including 750 unilateral and 284 bilateral, with a record 219 signed in FY26.
How long does an APA take in India?
Unilateral APAs took about 40.8 months on average in FY 2025-26, down from 42.94 months the year before.
Which countries has India signed bilateral APAs with?
In FY26 alone, 13 countries including the US, UK, Japan, Singapore, Finland, South Korea, Australia, Denmark, Sweden, France, Indonesia, Ireland and New Zealand.
