APA Trends in India 2026: Rollback Provisions, MAP, and Domestic Pricing Agreements
CA Amit Bansal
CA Amit Bansal is a Fellow Chartered Accountant with over a decade of experience in accounting, auditing, and advisory. As Partner at GMCS & Co. and Founder of ABVS Management Consultancy, he leads key assurance and compliance projects across industries. He holds ICAI certifications in Forensic Accounting (FAFD), Concurrent Audit of Banks, ADR, and IND AS, and is a certified Peer Reviewer, known for his commitment to audit quality and integrity.
Introduction: A Decade of APA Evolution in India
In the dynamic landscape of international taxation, India’s Advance Pricing Agreement (APA) programme has undergone significant growth over the past decade. Launched in 2012, the APA regime was designed to bring certainty and predictability to transfer pricing by reducing disputes between taxpayers and the tax authority over the arm’s length pricing of cross-border related-party transactions. Over the years, the programme has matured from a nascent policy tool to a core part of India’s dispute prevention and resolution architecture. Its evolution reflects broader trends in global tax administration, where effective dispute mitigation mechanisms have become increasingly vital for multinational enterprises (MNEs).
What Is an APA, and Why Does It Matter?
At its core, an APA is an agreement between a taxpayer and the Central Board of Direct Taxes (CBDT) that establishes, in advance, the method for determining the arm’s length price (ALP) for international transactions between associated enterprises. An APA may either specify the pricing methodology alone or determine the ALP itself, and it generally applies for a period of up to five years. Crucially, under Indian rules, taxpayers can elect to roll back the agreed pricing and methodology to cover up to four years before the APA period, thereby securing up to nine years of pricing certainty at a time.
There are three main types of APAs:
a. Unilateral APAs (UAPAs):Agreements between the taxpayer and Indian tax authorities only;
b. Bilateral APAs (BAPAs):Agreements involving both Indian and foreign tax authorities;
c. Multilateral APAs (MAPAs):Involving India and multiple treaty partners for comprehensive pricing certainty across jurisdictions.
This framework is complemented by the Mutual Agreement Procedure (MAP) under India’s tax treaties, which provides another avenue for resolving cross-border tax disputes. Combined, these mechanisms reduce litigation, enhance compliance certainty, and promote stable cross-border investment flows.
APA Decade Report: Key Trends & Growth Patterns
As of March 31, 2025, the CBDT has signed 815 APAs since the programme’s inception—comprising 615 unilateral APAs, 199 bilateral APAs, and one multilateral APA. This cumulative total reflects a clear upward trajectory in taxpayer participation and government engagement.
In FY 2024–25 alone, the CBDT concluded 174 APAs, representing the highest annual tally in the programme’s history. This growth was driven by a surge in both unilateral and bilateral signings, including a record 65 BAPAs—the highest number to date—as well as India’s first MAPA, signalling deeper integration into global tax dispute resolution mechanisms.
A year-by-year breakdown highlights the notable progression of the APA programme:
Fiscal Year | Total APAs Signed | Unilateral | Bilateral / MAP |
2016-17 | 88 | 80 | 8 |
2017-18 | 67 | 58 | 9 |
2018-19 | 52 | 41 | 11 |
2019-20 | 57 | 50 | 7 |
2020-21 | 31 | 18 | 13 |
2021-22 | 62 | 49 | 13 |
2022-23 | 95 | 63 | 32 |
2023-24 | 125 | 86 | 39 |
2024-25 | 174 | 109 | 65 (incl. 1 MAPA) |
This pattern highlights steady annual growth, punctuated by strong performance in recent years, as procedural efficiencies, global treaty collaborations, and taxpayer trust have increased.
Rollbacks: Extending Certainty Beyond Forward Years
One of the key features of India’s APA framework is the rollback mechanism, which enables the agreed transfer pricing method, and in some cases the ALP, to be applied retrospectively. This rollback can extend up to four years before the first year covered by the APA, meaning taxpayers can secure pricing certainty for up to nine consecutive years.
This provision has been particularly valuable for MNEs with a long history of operations in India, as it helps resolve pending disputes and align past assessments with future certainty. Operationally, however, the availability of rollback is subject to statutory conditions; for instance, taxpayers must have duly filed returns for the relevant years, and the nature of the international transactions must remain consistent across the covered period.
In practice, while rollback has not been exercised in every case, its existence has been a strategic lever for taxpayers seeking a comprehensive resolution of long-running issues without resorting to prolonged litigation.
MAPs & Bilateral Cooperation: India’s Growing Global Footprint
The introduction of Multilateral APAs (MAPAs) and the expansion of BAPAs reflect India’s commitment to deepening tax cooperation with treaty partners. By involving foreign tax authorities in the APA process, BAPAs and MAPAs help prevent double taxation and streamline compliance across jurisdictions, which is particularly beneficial for multinational enterprises.
In FY 2024-25, the high number of BAPAs concluded underscores a maturing network of international cooperation and demonstrates India’s willingness to engage proactively with partner tax administrations on complex transfer pricing issues.
Simultaneously, the Mutual Agreement Procedure (MAP) continues to play an important role in resolving cross-border disputes that fall outside the scope of APAs. While detailed MAP data is not always publicly disclosed, available analytics suggest that MAP resolutions have increased steadily, resulting in reduced inventories of unresolved cases in several years.
Success Rates & Sectoral Adoption
Although precise official “success rates” for APAs are not typically published, the upward trend in concluded agreements—along with reported high renewal rates—suggests that both taxpayers and the CBDT consider the mechanism effective. The growing use of bilateral and multilateral agreements reflects increased confidence in achieving mutually acceptable outcomes.
Sectorally, APAs have been particularly prominent among industries with extensive cross-border operations and complex transfer pricing challenges. These sectors include:
a. Information Technology and Software Services
b. Banking, Financial Services & Insurance
c. Engineering and Telecommunications
d. Power & Energy
e. Pharmaceuticals and Life Sciences
These industries often operate large international value chains, generate significant intellectual property assets, and engage in services or royalty-related transactions—areas where transfer pricing disputes can be both intricate and high-risk. As a result, APAs have become a key tool for firms in these sectors to secure long-term pricing certainty.
Conclusion: India’s APA Programme in 2026 and Beyond
As of 2026, India’s Advance Pricing Agreement programme stands as a pillar of the transfer pricing landscape, with a decade’s worth of data and experience demonstrating its value in fostering tax certainty and reducing disputes. The sustained growth in APA signings, the increasing prevalence of bilateral and multilateral agreements, and the availability of rollback provisions have all contributed to shaping a dispute prevention regime that aligns with global best practices.
Looking forward, the focus for India will likely include reducing processing times, expanding treaty partner networks for MAP and MAPA engagements, and integrating broader data-driven analytics to refine transfer pricing outcomes. For taxpayers, maintaining proactive engagement with the APA process—especially in complex industry contexts—will remain a strategic necessity in navigating the evolving global tax environment.
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