Jul. 29 – U.S. auto giant Ford said yesterday it would invest US$1 billion to build a vehicle assembly and engine plant in Gujarat as it increases production to exploit the country’s burgeoning car market. The new factory will employ around 5,000 workers and will be the firm’s second in India.
“Ford has very aggressive expansion plans in India and in Asia Pacific and Africa,” stated Joe Hinrichs, president of Ford Asia Pacific and Africa. Continue reading
Jul. 28 – Limited liability partnerships (LLPs) in India are a cross structure of a business venture which is an amalgamation of a business firm and a company. A LLP is considered as a mutual structure like any other company, enjoys tax dealings like a partnership firm, limits the liability of the partners to the degree of payment as in cases of the company, and entry or exit of partners is simpler. LLPs are easier to form and close with lesser authoritarian compliance, thus making them a flourishing investment and business medium. The LLP has lesser compliance requirements than a company and also lesser liability than a partnership firm. Continue reading
Jul. 26 – India’s Committee of Secretaries (CoS) voiced its approval for 51 percent FDI in multi-brand retail and the nodal Department of Industrial Policy and Promotion (DIPP) is expected to prepare a Cabinet proposal on this subject matter. The Cabinet Secretary has asked the DIPP to proceed rapidly on the issue and act fast for Cabinet approval, but clearance depends primarily on the recommendations of the CoS.
According to the long-awaited proposal, overseas retail giants such as Wal-Mart, Carrefour and Tesco would be allowed to own as much as a 51 percent of stores if they invest a minimum US$100 million. Although the multi-brand retail proposal does not need parliamentary approval, it would need a broad-based political approval. Continue reading
Jul. 21 – India’s Union Minister of Corporate Affairs released the “National Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business” this week, highlighting the subject of ethical responsibility in India’s corporate culture.
The Minister of Corporate Affairs believes these new guidelines will strengthen India’s corporate sector and enable it to evolve into a global leader in responsible business. He said the beginning of industrialization in India marked the transition from merchant charity to industrial philanthropy, which is more secular, more inclusive in terms of caste, creed and community and more oriented towards bringing progress to society through modern, western-style institutions. Continue reading
Jul. 18 – The Commerce Secretary of India informed that during the first quarter of this fiscal year, from April-June 2011, exports achieved a level of US$79 billion at a growth of 45.7 percent. Imports over the same time-frame were US$110.6 billion with a growth of 36 percent resulting in a trade deficit of US$31.6 billion.
The Commerce Secretary also announced that India’s exports recorded a growth of 46.4 percent during June 2011, at US$29.2 billion, while imports were US$36.9 billion registering a growth rate of 42.4 percent. The balance of trade for the month of June 2011 stood at a deficit of US$7.7 billion. Continue reading
Jul. 15 –In this new issue of India Briefing, we take a look at the Indian tax environment generally, including types of taxes, fees and key dates, and continue on to focus specifically on requirements for foreign companies. Next, we look closer at the generous tax benefits available in Special Economic Zones, contingent on sector and operating dates, and finally expand our focus to India’s international trade agreements.
Although an increasing number of investors and managers are looking seriously at investing in India, the technical expertise of how to bring international investments into fruition is not always easy to acquire. Adequate due diligence will include appropriate attention to opportunity and potential in a new market but no form of analysis would be complete without an understanding of the dry, but necessary, tax environment. Continue reading
Jul. 13 – The Canadian credit rating company Dominion Bond Rating Services (DBRS) has upgraded the inclination of India’s Long Term foreign and local currency debt ratings for the first time from BBB Negative to a stable outlook. DBRS has been rating India since June 2007 and, according to the agency, the Indian government’s efforts to reduce the fiscal deficit for 2011-12 are very appreciable.
“Government is addressing the country’s infrastructure deficit by spending US$514 billion, or 9 percent of GDP, on infrastructure between 2007-2012, and an additional US$1 trillion from 2013-2017, approximately one-half of which may come from the private sector and public-private partnerships,” DBRS stated. Continue reading
By Vivian Ni
Jul. 11 – The Indian government recently proposed to establish a new law in order to better regulate the country’s microfinance industry that is faced with complaints of aggressive lending practices and high interest rates. Aiming to bring various microfinance institutions (MFIs) under the regulation of the Reserve Bank of India (RBI), the proposed law is expected to strongly impact smaller players who look for large profit through their lending businesses.
According to reports, the draft bill proposed that all entities involved in micro-finance activity should obtain a registration certificate from the country’s central bank: the RBI. Non-bank micro-lending companies that have provided a minimum of Rs.500,000 in net owned funds can get registered within three months when the law takes effect. Continue reading