India is emerging as a key player in the upcoming overhaul of international tax rules under the UN, advocating for a shift towards a more inclusive and equitable system that grants developing nations greater taxing rights and influences global tax governance.
India is positioning itself at the centre of a major rewrite of international tax rules as negotiations advance on a United Nations Framework Convention on International Tax Cooperation. The process marks a possible shift away from a system long shaped by the OECD, giving developing countries a bigger role in deciding how multinational profits should be taxed and where those rights should sit.
The UN says the talks are moving into a critical phase, with an upcoming session in February 2026 due to review draft materials developed during the intersessional period and feed into a Zero Draft, a key step towards a final convention targeted for 2027. The General Assembly backed the initiative in 2023, saying the new framework should reflect the sovereignty, priorities and capacity of all countries.
India has emerged as one of the most active supporters of the UN track. It backed the 2023 resolution that set the process in motion and has continued to argue that current rules still tilt in favour of developed economies. New Delhi’s case is that large market jurisdictions, especially fast-growing ones with major digital and services sectors, should have stronger taxing rights when value is created within their borders, even if firms have little physical presence there.
That argument has gained force as digital business models have exposed the limits of older tax concepts built around bricks-and-mortar operations. In the current negotiations, one of the main disputes concerns Article 5, which in draft form would recognise taxing rights for jurisdictions where value is created, markets are located, revenue is generated or economic activity takes place. For India, that approach aligns with its push for a fairer share of tax revenue from multinational groups operating in its economy.
The stakes extend beyond technical tax design. Indian policymakers have linked the talks to broader goals such as stronger domestic revenue collection, infrastructure spending, healthcare, education, climate action and sustainable development. They also see the process as a chance to backstop efforts against profit shifting, tax avoidance and illicit financial flows, while drawing on India’s own experience in strengthening tax administration.
India’s influence also lies in its ability to bridge the gap between rich and poor nations. It has remained engaged with OECD-led efforts such as the Base Erosion and Profit Shifting project and the Two-Pillar Solution, while arguing that the UN process can be more inclusive without breaking the existing system. As a member of the UN negotiating committee, India has a chance to shape not just the convention itself but the protocols and governance rules that follow.
For New Delhi, the wider diplomatic value is clear. The talks fit with India’s ambition to speak for the Global South and to press for global institutions that better reflect today’s economic realities. If the UN convention advances as intended, India will be among the countries most likely to shape how fairness, transparency and taxing rights are defined in the next era of international tax co-operation.
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