Nov. 29 – Because of the current market situation, it has been decided by the government of India that interest rates on non-resident external (NRE) rupee term deposits for one to three years maturity should not go above the LIBOR/SWAP rates plus 275 basis points, as on the last working day of the previous month, for U.S. dollar of corresponding maturities. The interest rates will also be valid to deposits with the maturity period beyond three years and to deposits renewed after their present maturity period.

The interest rate on NRE deposits had been LIBOR/SWAP rates plus 175 basis points since November 15, 2008. Continue Reading

Nov. 28 – India has accepted overseas companies to own as much as 51 percent of retailers selling more than one brand, paving the way for global companies such as Wal-Mart and Tesco to own stores in the country. Foreign organizations must invest at least US$100 million, half of which has to be spent on developing back-end infrastructure.

India’s Cabinet cleared retail ownership rules, including permitting 100 percent foreign holding in single brand stores. According to the government, India’s decision to permit overseas ownership in retail will create up to 10 million jobs and give farmers better prices. It will be mandatory for foreign retailers to purchase at least 30 percent of the goods sold in the ventures from small industries. Furthermore, stores will only be allowed to operate in 53 cities with populations of 1 million or more, and the government will preserve the first right to buy farm products. Continue Reading

Nov. 24 – The Indian government has indicated that it will move speedily to save the country’s deteriorating aviation industry by liberalizing rules on foreign investment. A draft cabinet note on foreign direct investment has put the FDI cap for foreign airlines at 26 percent against 24 percent planned originally by the Civil Aviation Ministry to the Department of Industrial Policy and Promotion.

Presently, foreign direct investment up to 49 percent is permissible in the aviation sector, but foreign airlines are not permissible to invest in a domestic airline company. The cabinet note said that the existing restrictions need to be removed. Continue Reading

Nov. 23 – India’s Provident Fund (PF) is a clear payment arrangement – where each employee contributes 12 percent of their pay on a monthly basis and the individual’s employer is accountable for an equal contribution – out of which a part is remitted towards the pension fund.

The employee may choose to submit an additional voluntary contribution. Though, the total worker input may not exceed 20 percent of pay. The employee may also request the employer to limit the amount of “pay” for computations of PF to 6,500 per month. This type of planning will be done at the early stages of employment. Continue Reading

Nov. 15 – The main purposes of India’s Industrial Policy of the Government are to maintain a sustained growth in productivity, to enhance gainful employment, to achieve optimal utilization of human resources, to attain international competitiveness, and to transform India into a major partner and player in the global arena.

The Policy focus is on deregulating Indian industry, giving the industry freedom and flexibility in responding to market forces and providing a policy regime that facilitates and fosters growth within the country’s industry. Continue Reading

Nov. 14 – The government of Maharashtra has decided to make amendments to the rules and regulations in the Value Added Tax Rules (2005), to dispense with the condition of the previous publication thereof under the proviso to sub-section (4) of section 83 of the Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005).

Therefore, in exercise of the powers presented by sub-sections (1), (2) and (3) read with the proviso to sub-section (4) of section 83 of the said Act, and of all other powers enabling it in this behalf, the Government of Maharashtra has made the following amendments. Continue Reading

Nov. 10 – The government of India has already allowed 100 percent FDI into the pharmaceuticals industry. Recently, the government has reviewed its policy in the particular sector. Below are the specific points:

• FDI, up to 100 percent, under the automatic route, would continue to be permitted for greenfield investments in the pharmaceuticals sector.
• FDI, up to 100 percent, would be permitted for brown field investments (i.e. investments in existing companies), in the pharmaceuticals sector, under the government approval route. Continue Reading

Nov. 9 – India’s exports have recorded development of 10.8 percent during October 2011 at US$19.9 billion, while imports were at US$39.5 billion over the same period for a growth rate of 21.7 percent. As such, the trade deficit for the particular period was US$19.6 billion.

Collective export figures for the tenure of April to October 2011 stand at US$179.8 billion recording a growth of 46 percent and imports for the same period stand at US$273.5 billion registering a growth of 31 percent. Balance of trade for the period stands at negative US$93.7 billion. Continue Reading