4 days ago
How not to keep secrets: India's real estate, trusts and partnerships tell the story
Synopsis Tax Justice Network's Financial Secrecy Index ranks India 24th globally, highlighting both progress and persistent opacity. While India shows transparency in corporate ownership, weaknesses remain in areas like beneficial ownership and international cooperation. The index underscores the need for global fairness and transparency, urging countries to prioritize it for economic stability and trust. Tax Justice Network's latest Financial Secrecy Index (FSI), released on June 3, ranks India 24th globally, an eight-place jump from its last position. The country's overall secrecy score remains at 56 out of 100.
ADVERTISEMENT The index ranks countries by how much they enable individuals to hide their finances from the law. A secrecy score reflects how permissive a country's laws are, while the 'Global Scale Weight' measures the financial services it offers to non- residents. Together, they form 'FSI Value' - a measure of a country's role in global financial secrecy.
Key highlights of India's secrecy indicators (scores in brackets):
Banking secrecy (34) indicates moderate transparency in banking practices.
Beneficial ownership of trusts (100) suggests a lack of transparency, allowing trusts to potentially conceal the identities of true owners.
Beneficial ownership of foundations and companies (0) reflects strong transparency measures requiring disclosure of beneficial owners.
Free ports ownership (100) points to opacity in the ownership of assets stored in free ports.
Real estate ownership (100) indicates a high level of secrecy in real estate ownership records.
Transparency of partnerships with limited liability (100) reflects a lack of transparency in the ownership and financial reporting of such partnerships.
Transparency of company ownership and accounts (100) suggests company ownership and financial statements are not transparent.
Public country-by-country reporting (100) implies that MNCs are not required to report financial data on a country-by-country basis publicly.
Legal entity identifier (50) indicates partial implementation of unique identifiers for legal entities to enhance transparency.
Tax compliance focus (65) reflects moderate efforts in targeting tax compliance, especially among high-risk entities.
Foreign investment income (70) suggests that foreign investment income may not be fully taxed or reported, leading to potential tax base erosion.
Public statistics (10) indicate limited availability of public data on financial and economic activities.
Anti-money laundering (16) suggests weaknesses in anti-money laundering frameworks.
Automatic exchange of information (AEOI; 26) reflects limited participation in international agreements for the same.
Exchange of information upon request (0) indicates non-participation or ineffective implementation of info exchange upon request.
International legal cooperation (16) indicates limited engagement in international legal cooperation on financial matters. India has built a strong legal and administrative framework for information exchange, particularly excelling in bilateral Exchange of Information on Request (EOIR) and is an early adopter of AEOI. However, in the 2025 FSI, India scored a low 26/100 on AEOI, reflecting concerns around: Limited coverage of asset types (e.g., crypto, digital platforms).
Delays in updating commitments to newer agreements like the Crypto-Asset Reporting Framework (CARF) and platform reporting rules (DPI MCAA). India scored well on transparency in corporate ownership and public financial reporting. However, this progress is undercut by opacity in other high-risk areas. India's limited participation in automatic information exchange and low compliance with international anti- money laundering and legal cooperation standards further highlight systemic weaknesses.
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The index underscores that financial secrecy is no longer a fringe issue. It is now driven by some of the world's largest and most influential economies. This should concern anyone who values global secrecy corrodes institutions, and it weakens the social contract. It makes citizens question why they should pay taxes when billionaires and MNCs do not. When governments can't collect taxes, they cannot fund essential services. When services fail, trust erodes.
ADVERTISEMENT The index highlights a troubling trend: despite their pro-transparency stance, over half of EU countries are reportedly exploiting a loophole to block tax cooperation with many non-EU, often lower-income, nations. This loophole stems from OECD's tax convention, which allows countries to deny assistance or automatic data exchange with jurisdictions deemed 'non-reciprocal' or 'technically unprepared'.In practice, this means developing countries' tax authorities - those most in need of cooperation to combat illicit financial flows - are denied critical assistance. Meanwhile, wealth siphoned from their economies finds quiet refuge in EU financial institutions. This disparity undermines global efforts to tackle tax evasion, deepens global financial inequality and stifles economic development.
ADVERTISEMENT This year's index offers not just a diagnosis but also hope. Countries like Spain, Denmark and Britain have shown that it is possible to improve transparency while remaining competitive in international finance. Their secrecy scores went down, their share of clean financial services went up - and their rankings fell (a positive outcome in this index). In other words, transparency isn't economic suicide. It's good the EU wants to be taken seriously, it must close its backdoor and begin treating transparency as a democratic obligation, not a geopolitical privilege. Taxation is not merely about revenue - it is about fairness.
ADVERTISEMENT In a world where wealth moves globally but justice remains local, failing to act now could lead to a far steeper cost - not in euros or dollars, but in trust, stability and democratic legitimacy.
The writer is former principal DG, income-tax (administration), New Delhi
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of
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