India and the U.S. have reached an agreement to resolve more than 100 pending transfer pricing cases, one of the biggest deterrents for foreign investors planning an India foray, according to a government statement.

Some more are expected to be resolved soon. Transfer pricing refers to the setting of the price of goods or services sold between entities within an enterprise. For example, if a subsidiary sells good or services to its parent company, then the price set for this sale is the transfer price.

“This agreement was finalised under the Mutual Agreement Procedure (MAP) provision contained in the India-USA Double Taxation Avoidance Convention (DTAC). The agreement seeks to resolve about 200 past transfer pricing disputes between the two countries in the Information Technology (Software Development) Services [ITS] and Information Technology enabled Services [ITeS] segments,” according to a Finance Ministry statement.

“More than 100 cases have already been resolved and some more are expected to be resolved before the end of this fiscal.”

“Transfer pricing is one of the biggest tax issues is the world today. Pending cases and issues are also one of the biggest factors keeping foreign investors wary of India. These resolutions to the cases will help,” Sanjay Tolia, transfer pricing leader at PwC told The Hindu.

“This will lead to a positive environment and will bring greater certainty. This greater certainty will lead to more investments flowing into India. All these companies (embroiled in transfer pricing issues) are off-shoring companies. With these resolutions, more US companies will offshore work into India, have manufacturing in India, which will mean more employment here,” Girish Vanvari, Co-Head of Tax at KPMG said.

Many cases have been pending for between four and five years, according to experts. The real headway in resolving them was made after the Framework Agreement between the Central Board of Direct Taxes and the revenue authorities in the US in January 2015.

“You have to find a way to remove the pain of the past cases, to get a proper GST regime, to get transfer pricing agreed to so that more new cases don’t come up,” US-India Business Council Chairman Ajay Banga had said last year.