Regulatory Update

Bombay Stock Exchange Launches Shariah Index

May 9 – Last week, the Bombay Stock Exchange (BSE) became India’s first stock exchange to launch an Islamic-focused Index, calling it the S&P BSE 500 Shariah Index. The Shariah Index will be the first index launched since S&P Dow Jones and BSE announced their strategic partnership in February, joining a long list of well-known indices around the globe.

Its main differentiating feature will be its compliance with Islamic canonical law in choosing investments. This will allow for further inclusion of India’s estimated 170+ million Muslims in India’s markets, providing them with certainty in not violating religious law with their investments.

The index will specifically exclude firms dealing with pork or tobacco products, newspapers and other media firms, any businesses dealing in alcohol or pornography, and other firms dealing in products incompatible with Islamic standards. Most notably, since Islamic law forbids gambling, derivatives, futures, and other similar financial products will not be eligible for this index. Continue reading →

Posted in Business, Finance, Tax and Accounting, Regulatory Update | Tagged Bombay Stock Exchange, India, Shariah Index | Leave a comment

India Expands Visa On Arrival Service

Entering India is now easier than it is in China

May 8 – The Indian government has recently enacted a slew of measures that will seek to further liberalize the visa regime in the country and to boost the number of arriving foreign tourists and businessmen.

The government has approved the introduction of the Visa on Arrival (VoA) facility for individuals in five additional airports. In conjunction with airports in Delhi, Mumbai, Chennai and Kolkata, VoAs will now also be accepted at airports in Hyderabad, Bangalore, Kochi, Trivandrum and Goa.

Furthermore, the government has also extended the VoA option to include groups of four or more tourists. This group VoA facility has been granted to all countries except Afghanistan, China, Iran, Iraq, Sudan and Pakistan and foreigners of Pakistani origin. Continue reading →

Posted in Legal and Regulatory, Regulatory Update | Tagged India, Travel, Visa, Visa On Arrival | Leave a comment

Report: India Creativity Index Released, Delhi Among Top

May 6 – Delhi took the top spot this year in the recently released annual report from Martin Prosperity Institute measuring Global Creativity Index, called “Understanding the Creative Economy in India”.

Chandigarh, Punjab, Kerala, Goa, Mizoram, Andaman & Nicobar Islands, Puducherry and Maharashtra round out the top 9, while Haryana and Manipur tied for 10th.

The report measures India’s creativity levels throughout various regions with regard to Technology, Talent, and Tolerance (the “3Ts”).The 3Ts function as a leading indicator to measure regional potential for the 28 Indian states and 7 union territories. The report also presents both the component sub-indices of the Creativity Index and other related measures related to regional technology, talent, and tolerance. Continue reading →

Posted in Business, Markets, Regulatory Update | Tagged India Creativity | Leave a comment

India Passes Tax Cuts for Foreign Investors

By Sondre Ulvund Solstad

May. 3 – India will cut the tax rate on income earned by non-residents from investments in corporate and government debt. The cut is part of India’s Finance Bill which was passed by the lower house of the Indian parliament on Tuesday. Several other key changes were also announced during the session, including changes to tax on income from infrastructure bonds and loan agreements, tax residency procedures, and a clarification regarding the applicability of the wealth tax on agricultural land.

The tax cut will lower the withholding tax rate on interest earned by foreign investors on government securities and rupee-denominated corporate bonds from 20 percent to 5 percent. Taking effect from June 1, the cut will be in effect for two years. It is seen as part of Finance Minister Chidambaram’s efforts to reduce the current Indian account deficit in the short term and spur growth in the long term by increasing foreign investment. Continue reading →

Posted in Business, FDI and Foreign Trade, Finance, Tax and Accounting, Regulatory Update | Tagged India, Investment, Tax | Leave a comment

Indian Gov’t Boosts Export Incentives

Apr. 23 – Last week, the Indian government announced a variety of measures to boost India’s exports, including added benefits to special economic zones (SEZs), and a slew of incentives for exporters.

In regards to India’s SEZ scheme, the new rules will allow information technology (IT) firms to claim tax breaks by moving offshore work to “duty-free enclaves” and reducing their minimum land area requirements.

“We have taken note of the fact that there are acute difficulties in aggregating large tracks of uncultivable land which is vacant and contiguous and we have decided to reduce the minimum land area requirement by half for different categories of SEZs,” said Anand Sharma, India’s Minister of Commerce and Industry. Continue reading →

Posted in Business, FDI and Foreign Trade, Regulatory Update | Tagged Economy, Exports, FDI, Incentives, India SEZ, SEZ | Leave a comment

Government Raises FDI Limit in Asset Reconstruction Companies

By Gunjan Sinha, Senior Associate, Dezan Shira & Associates

Apr. 16 – With the advent of asset reconstruction companies (ARCs) in India, banks and other financial institutions have been given greater conditions in which they can concentrate on their core area of business, and are no longer being forced to manage the recovery of their Non Performing Assets (NPA). Instead, companies specialized in asset reconstruction can acquire NPAs from their originators to then attempt to manage and recover these assets.

Due to the increasing demand for these companies’ services and to certain macroeconomic trends, the foreign direct investment (FDI) limit in ARCs has been increased to 74 percent. The government previously limited FDI in ARCs to 49 percent. It is hoped that this revision will bring greater foreign expertise into the segment. Continue reading →

Posted in Business, FDI and Foreign Trade, Regulatory Update | Tagged Asset Reconstruction Companies, FDI, India | Leave a comment

India Increases Customs Duties on Luxury Items

Apr. 3 – The Indian government has made some key changes in its 2013 Budget that will primarily affect the super-rich, with customs duties on imported luxury items, including high-end motor vehicles, motorcycles, yachts and other similar vehicles, being increased. A further 10 percent surcharge, in addition to normal tax rates, has also been applied to people earning more than Rs. 10 million a year. This surcharge will affect approximately 42,800 people in India.

The duty hike will increase rates for motorcycles with a 800cc engine capacity or higher from 60 percent to 75 percent. The duty on yachts and similar vessels has been increased from 10 percent to 25 percent. Motor vehicles will see a 70 percent to 100 percent increase. Sports Utility Vehicles (SUVs) have been given an additional 3 percent levy. Continue reading →

Posted in Business, Finance, Tax and Accounting, Regulatory Update | Tagged India Tax, Luxury Items | Leave a comment

India Set to Release GAAR Final Draft

GAAR likely to be postponed to April 2016 in effort to restore investor confidence in the market

Nov. 20 – The Indian government is likely to announce the final draft of the General Anti-Avoidance Rules (GAAR) within the next 10 days, according to the country’s Finance Minister P. Chidambaram.

“A decision has been taken on GAAR,” Chidambaram said. “The draft has been sent to the Prime Minister. Hopefully, the decision will be made public in the next 7-10 days.” Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Leave a comment