India APA Annual Report for FY 2025-26 Draws Transfer Pricing Focus
The Central Board of Direct Taxes (CBDT) has released the eighth annual report of India's Advance Pricing Agreement (APA) programme, covering FY 2025-26. The APA Programme of India Annual Report 2025-26, dated July 2026, records 220 APAs signed during the year, the highest in any single year, and a cumulative total of 1,035 agreements up to 31 March 2026. For taxpayers with cross-border related-party transactions, the report is the most complete public data on how long APAs take, which transactions they cover and which methods the CBDT accepts.
Signings and applications
| Item | FY 2025-26 | Cumulative to 31 March 2026 |
|---|---|---|
| APAs signed | 220 (136 unilateral, 84 bilateral) | 1,035 (751 unilateral, 284 bilateral) |
| Applications filed | 215 (112 unilateral, 103 bilateral) | 2,277 (1,557 unilateral, 721 bilateral) |
| Applications under processing | Not applicable | 841 |
| Applications disposed for other reasons | Not applicable | 401 |
The CBDT's press release of 31 March 2026 had put the year's count at 219 APAs, including 84 bilateral APAs, with a cumulative 1,034. The annual report, prepared after year-end, gives the final figures of 220 and 1,035. The press release also noted first-ever bilateral APAs with France, Ireland, Indonesia and Sweden.
How long an APA takes
The median time to conclude a unilateral APA in FY 2025-26 was 36 months (average 40.8 months). For bilateral APAs the median was 38 months (average 41.47 months). About 45% of unilateral APAs were concluded within 24 months and 65% within 36 months. Renewals were faster: 86 of the 136 unilateral APAs were renewals, concluded in 29 months on average, and 22 of the 84 bilateral APAs were renewals, concluded in 23.5 months on average.
Who is using APAs
- Sectors: information technology led with 55 unilateral APAs. By business type, 98 of the unilateral APAs were with service companies.
- Transactions: the most common were IT-enabled services (60), export or sale of goods (36), management and corporate support services (34), royalty and licence fees (33) and software development (31).
- Methods: the transactional net margin method was used for 239 transactions in unilateral APAs and 265 in bilateral APAs; the comparable uncontrolled price method and profit split method were rarely used.
- Treaty partners: bilateral APAs in FY 2025-26 were signed with the USA (39), Finland (9), Singapore (8), the UK (7), Japan (6), Denmark, South Korea and Australia (3 each), France and Sweden (2 each), and Ireland and Indonesia (1 each).
Rollback and tax certainty
The APAs signed in FY 2025-26 cover 1,093 APA years plus 239 rollback years. Rollback was included in 46 unilateral and 32 bilateral APAs. Cumulatively, the programme now covers 4,559 APA years and 1,173 rollback years. The report estimates that the 1,035 APAs bring finality to income of about ₹51,000 crore and roughly ₹15,000 crore of tax without litigation.
Changes linked to the Income-tax Act, 2025
With the Income-tax Act, 2025 in force from 1 April 2026, the CBDT has revised the model APA template so that it works under both the 1961 Act and the 2025 Act, with references to the new provisions on modified returns, annual compliance reports, compliance audit, secondary adjustment, revision and cancellation. Under an office memorandum dated 24 March 2026, a critical assumption will be added to unilateral APAs so that a taxpayer can opt for safe harbour in future years even after entering into an APA. The PIB release also noted that the safe harbour eligibility threshold has been raised from ₹300 crore to ₹2,000 crore, with IT services placed in a single category at a 15.5% margin.
What taxpayers should consider
Groups with recurring transactions such as IT-enabled services, support services or royalties can use the report to judge realistic timelines, which now run close to three years for a first APA. Those with an APA expiring soon can note that renewals are concluded faster. Taxpayers eligible for safe harbour under the higher threshold should compare it with an APA before filing, since the new critical assumption keeps the safe harbour option open for later years.
Updated on 27 September 2026: Replaced the secondary-source summary with figures from the CBDT's APA Annual Report 2025-26 and the PIB release of 31 March 2026, including signings, timelines, sectors, rollback and changes under the Income-tax Act, 2025.
