Rules of transfer pricing

Endowed with the advantages of low-cost base and a large, growing English- speaking workforce, India has emerged as a globally preferred outsourcing destination. The growth achieved by India’s information technology (IT) services and information technology enabled services (ITeS) sectors stand testimony to this. Indian transfer pricing regulations require captive units having international transactions with its associated enterprises to be remunerated on an “arm’s-length” basis, leading to the often vexed question of what constitutes an arm’s-length remuneration for a captive unit