Op-Ed Commentary: Samuel Wrest
Over the weekend, Narendra Modi made his first major state visit to Japan’s former imperial city of Kyoto for summit talks with Prime Minister Shinzo Abe. The subject of the two leaders’ meeting was multifarious and included discussion on the strengthening of security ties, nuclear energy cooperation and the easing of restrictions on exports. Perhaps most important, however, was Tokyo’s pledge to help directly fund projects to improve India’s infrastructure.
Over the next five years, Japan has promised it will invest approximately US$35 billion into several next-generation infrastructure projects in India, including public transportation and smart cities. India’s poor infrastructure is commonly identified as a factor hindering greater foreign direct investment (FDI). This has allowed other Asian countries with existing infrastructure, such as Singapore and Malaysia, to become the preferred destinations for certain types of FDI. Japan’s funding will certainly go some way towards ending this disadvantage, and will help steer India in the right direction to maximize its vast investment potential.
By Chris Devonshire-Ellis, Founding Partner, Dezan Shira & Associates
While many foreign companies choose to access the Indian market through direct and indirect export rather than by establishing a local business presence, developing a joint venture (JV) with an Indian partner can sometimes be both the most strategic and affordable option for market entry. Although entering into a JV with a domestic partner is required for foreign companies seeking to operate in sectors that do not permit 100 percent FDI, a growing number of JVs with Indian firms are being established for strategic market advantage rather than legal necessity.
DELHI – Determining the best route for market entry or expansion into India requires careful consideration of a wide variety of factors, including the intended scope of investment, nature of business activities, tax implications, and legal liability. Foreign companies should carefully weigh the advantages and drawbacks of each route to market, which can range from direct and indirect export to establishing a local business presence or acquiring an existing company in India.
While many foreign companies choose to rely on direct export and third-party distributors to sell their products and services, establishing a local business presence is oftentimes a prerequisite to long-term profitability and success.
DELHI – On Tuesday, the Securities Laws (Amendment) Bill 2014 was passed by the Rajya Sabha, India’s upper house, after being passed by the Lok Sabha, the lower house, last week.
The bill is intended to give the country’s capital market regulator, the Securities and Exchange Board of India (SEBI), the power needed to crack down on fraudulent investment schemes and insider trading.
The Asian giant has recently been seeing a growing number of multi-level market schemes (effectively Ponzi schemes) disguised as Collective Investment Schemes (CIS).
DELHI – India’s thirst for whiskey continues to grow as its local firms charted some of the largest growths worldwide in 2013, according to a recent report.
Seven out of 10 of the fastest growing whisky brands in the world are Indian, Drinks International found in its annual Millionaire’s Club report, which looks at companies with at least one million in 9-liter case sales.
At the top, Radico Khaitan’s Crown whisky recorded a 75 percent growth in the last year, the highest in the world. It’s followed by Pernod Ricard’s Imperial Blue (40 percent), Allied Blenders & Distillers’ Officer’s Choice (31 percent) and United Spirits Ltd’s Haywards Fine (30 percent).
By Benedict Lynn
DELHI – On Sunday, during the first bilateral visit of an Indian Prime Minister to Nepal in 17 years, Navendra Modi also became the first foreign head of government to address the Himalayan nation’s parliament since 1990. In his 50-minute speech, the Indian Premier urged Nepal’s lawmakers to finish the country’s long delayed Constitution, and offered the impoverished nation a US$1 billion line of credit.
Since the signing of the 1950 Indo-Nepal Peace and Friendship treaty, both countries have shared an open border alongside special trade and security relations. Over time, however, leftist groups in Nepal grew uncomfortable with India’s involvement in the economy, culminating in a 10 year long Maoist insurgency that only ended in 2006.
DELHI – India’s 12 major ports are expected to double their annual cargo handling capacity to 1,600 million tonnes (MT) within the next five years, according to Union Shipping Minister Nitin Gadkari. Initial projects to increase capacity by 350 MT will commence during this financial year.
India’s 12 major ports – Chennai, Cochin, Ennore, JNPT, Kandla, Kolkata (including Haldia), Marmugao, Mumbai, New Mangalore, Paradip, V O Chidamnarmar and Visakhapatnam – handled a combined cargo of 555.50 MT during the 2013-14 fiscal year, a slight increase of 1.78 percent from the 545.79 MT handled in 2012-13. This figure represents approximately two-thirds of the country’s total cargo traffic.
Tax, Accounting, and Audit in India 2014-2015, which is out now and available for download in the Asia Briefing Bookstore, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in India as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in India in order to effectively manage and strategically plan their India-based operations.