In 2014, exports from Virginia to India were worth a total of US $229.97 billion, or 1.06 percent of total U.S. Exports to India. Over the past decade, exports from Virginia have increased a total of 284.6 percent. Virginia’s top exports include defense and military equipment, tobacco, soybeans, circuit boards and printer parts, while its top imports include printer parts, tricycles & toys, coffee, rubber and vehicle parts.
Virginia is home to two of the Washington DC Metro area’s key airports (Dulles and Reagan) as well as an international airport in Richmond. Virginia also has the fifth busiest port in the United States at Hampton Roads near the cities of Norfolk, Hampton and Virginia Beach.
Virginia is well known as the home of Altria Group (formerly known at Philip Morris Industries), one of the world’s largest tobacco corporations. The group contracts many local farmers that are involved in the tobacco industry. India still remains one of the world’s largest tobacco markets with 34.6 percent of its population daily users. In addition to conventional cigarettes and bidis (Indian unfiltered cigarettes), tobacco in India is often consumed orally through paan leaves and small packages of chewing tobacco often mixed with areca nut and other flavorings.
Although globally the tobacco industry has shrunk, the industry remains quite strong and profitable in India. Furthermore, as India’s population continues to grow, long-term investment in tobacco products can continue to provide incentives, especially as a vast portion of its population reaches teenage years, when many begin to use such products. While Western tobacco usage has declined, India still remains a relatively safe and lucrative location for tobacco investment.
Northern Virginia is home to both the Pentagon and the Central Intelligence industry. Many local companies in the region, such as Northrop Grumman and Booz Allen Hamilton, serve primarily as defense contractors. Under the current administration, the Indian government has been far more aggressive in the acquisition of military weaponry from external sources.
In the 2014-2015 FY, India will spend 11 percent of total government expenditure on defense. High-level defense technologies and strategies will continue to be of necessity to the Indian economy. In order to compete with the rest of the globe, India will undoubtedly continue to increase spending its military sector and therefore provide more opportunities to defense-industry based investors.
Tax Treaty – U.S. Trade with India
The U.S. has signed a Double Tax Treaty with India. This can reduce tax burdens under certain circumstances in both trade and any India legal establishment. Please seek professional advice for specific India investment requirements.
Further Support from Dezan Shira & Associates
Dezan Shira & Associates can service Virginia-based companies that are looking to develop their Asia operations. The firm can help companies establish a direct office in the region and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact our U.S. office at email@example.com.
For further Virginia-Asia trade data, please see our related article on trade with China.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
An Introduction to Doing Business in India 2015 (Second Edition)
Doing Business in India 2015 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes. We discuss a range of pertinent issues for foreign businesses, including India’s most recent FDI caps and restrictions, the key taxes applicable to foreign companies, how to conduct a successful audit, and the procedures for obtaining an employment visa.
Using India’s Free Trade & Double Tax Agreements
In this issue of India Briefing magazine, we take a look at the bilateral and multilateral trade agreements that India currently has in place and highlight the deals that are still in negotiation. We analyze the country’s double tax agreements, and conclude by discussing how foreign businesses can establish a presence in Singapore to access both the Indian and ASEAN markets.
Passage to India: Selling to India’s Consumer Market In this issue of India Briefing magazine, we outline the fundamentals of India’s import policies and procedures, as well as provide an introduction to engaging in direct and indirect export, acquiring an Indian company, selling to the government and establishing a local presence in the form of a liaison office, branch office, or wholly owned subsidiary. We conclude by taking a closer look at the strategic potential of joint ventures and the advantages they can provide companies at all stages of market entry and expansion.