Synopsis With the emergence of multinational enterprises (MNEs) as a primary which for international trade, transfer pricing (TP) has emerged as a critical issue in the arena of international taxation. Tax authorities all over the world perceive TP as a convenient tool used by MNEs for shifting profits from one tax justification toanother calling for legislation to counter malpractices. The need for comprehensive legislation on TP has been felt in India too. The Finance Act 2001 sought to meet this need. This publication analyses various aspects of TP in general and the earlier provisions in the Indian law bearing on TP in particular with a view to evolving a TP tax regulatory framework for India. It was written prior to the recent changes in the Indian tax laws pertaining to TP. However, the legislative framework suggested here should serve as a model against which the new law may be evaluated.