FATCA is rapidly becoming the global standard in the effort to curtail offshore tax evasion. The US has signed agreements with more than 110 jurisdictions and is engaged in related discussions with many other nations.
The deal will be useful in combating tax evasion and avoidance and would be mutually beneficial for both countries. For India the deal comes at a time when the government is implementing its new black money law.
FATCA was introduced by the US Government in October 2009, but became law as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. FATCA is aimed at ensuring that US nationals with financial assets outside the US pay tax in that country.