CBDT signs record 219 advance pricing agreements in FY 2025-26
Key points
- CBDT signed 219 advance pricing agreements in FY 2025-26, including a record 84 bilateral APAs, taking the total since inception to 1,034.
- Bilateral APAs covered 13 treaty partners, with India's first-ever bilateral APAs signed with France, Ireland, Indonesia and Sweden.
- Companies with cross-border group transactions can use APAs to fix their transfer pricing for up to five years; the release is dated 31 March 2026.
The Central Board of Direct Taxes (CBDT) signed a record 219 Advance Pricing Agreements (APAs) with Indian taxpayers in FY 2025-26, according to a Ministry of Finance release of 31 March 2026. The total since the APA programme began has crossed the 1,000 mark and stands at 1,034. The 84 bilateral APAs (BAPAs) signed during the year are also the highest for any single year.
What has changed
The release gives these figures:
| Measure | Figure |
|---|---|
| APAs signed in FY 2025-26 | 219 |
| Bilateral APAs signed in FY 2025-26 | 84 |
| Bilateral APAs signed in FY 2024-25 | 65 |
| APAs signed in FY 2024-25 | 174 |
| APAs signed in FY 2023-24 | 125 |
| Total APAs since inception | 1,034 (750 unilateral, 284 bilateral) |
The bilateral APAs followed mutual agreements with 13 of India’s treaty partners: the US, Finland, the UK, Singapore, Japan, South Korea, Australia, Denmark, Sweden, France, Indonesia, Ireland and New Zealand. India signed its first-ever bilateral APAs with France, Ireland, Indonesia and Sweden during the year.
The release also describes the Safe Harbour Rules as a faster, lower-cost alternative to an APA. Introduced in 2013, they prescribe fixed margins for specified categories of international transactions and now span twelve categories, including IT and software services, IT-enabled services, KPO, contract R&D, intra-group financing, guarantees, auto components, low value-adding services and certain diamond industry transactions. According to the release, the Finance Act 2026 consolidated several technology service segments into a single “Information Technology Services” category with a uniform 15.5% margin, raised the eligibility threshold from Rs. 300 crore to Rs. 2,000 crore, and introduced a more system-driven, automated framework.
Who is affected
The figures matter to Indian companies that have international transactions with associated enterprises: subsidiaries of foreign groups, Indian companies with overseas subsidiaries, and startups whose Indian entity provides services to, or receives services from, a foreign parent. Bilateral APAs involve the tax authority of the other country, so they are relevant where the group entity is in one of India’s treaty partners.
What this means for businesses
According to the release, the APA Scheme, together with the Safe Harbour Rules, aims to give certainty by specifying pricing methods and determining the arm’s length price of international transactions in advance for up to five years. Bilateral APAs also protect against potential or actual double taxation.
In practice, the rising numbers (125, then 174, then 219 agreements a year) show that more cases are reaching a conclusion, including more bilateral cases that need agreement with another country’s tax authority. For a group with large, recurring cross-border transactions, such as service fees or intra-group financing, an APA can replace year-by-year transfer pricing disputes with an agreed method. Smaller entities with routine transactions may find safe harbour quicker and cheaper.
The release does not give the time taken to conclude APAs, the number of pending applications or a breakdown by sector, so it says little about how long a new application may take. Companies weighing an APA against safe harbour or annual benchmarking should consider the cost, time and documentation involved with an adviser.
This update was written with AI from the official source above and automatically fact-checked against it before publishing. It is general information, not professional advice. Check the source, or talk to a Chartered Accountant, before acting on it.