India Market Watch: Alibaba Consolidates B2B Commerce Platform in India and Russia Proposes Green Corridor with India

September 19, 2016 Posted by India Briefing Reading Time: 5 minutes

Alibaba Consolidates its B2B Commerce Platform in India

Alibaba, the Jack Ma-led Chinese e-commerce giant, is consolidating its existing business-to-business (B2B) online marketplace venture in India. The company has so far partnered with DHL and Delhivery to provide domestic and international logistics support to Indian sellers on its platform. Further, tie-ups with IDFC Bank, Kotak Mahindra Bank, and Aditya Birla Finance will provide financial support to its sellers. Online B2B commerce essentially supplies the goods that small-and medium-sized enterprises (SMEs) usually buy and sell in bulk. Other firms in this segment include India MART, Amazon Business, and startups like Moglix, mSupply.com, and Ofbusiness.

The Alibaba group is gradually looking to establish a robust buyer-seller ecosystem in India, a formula which ensured its success in China, where it began by linking local manufacturers and overseas buyers. A spokesperson for Alibaba has said that the company will include Chinese vendors on its site, taking advantage of its homegrown merchant ecosystem. The recent moves come as Alibaba have been unable to scale up their independent online commerce presence, and will be in addition to their investment in Snapdeal as a minor shareholder.

RELATED: Pre-Investment Services from Dezan Shira & Associates

Telecom Regulator Proposes New Norms to Map Radio Audience in India

The Telecom Regulatory Authority of India (TRAI) has submitted new guidelines for the development of a transparent and fair radio ratings system in the country to the Information and Broadcasting (I&B) ministry for approval. The proposed regulatory framework includes mandatory registration, eligibility norms, cross-holding restrictions, methodology of rating, complaint redressal, sale and use of ratings, audit, disclosure, reporting requirements, and penal provisions for radio rating agencies. The suggestions are part of a consultation paper that TRAI published back in March when it invited comments from all stakeholders, including AM and FM radio service operators, industry bodies, advertisers, and radio listeners.

Currently, radio listenership in India is mapped by a private, independent firm, TAM Media Research, through its unit, Radio Audio Measurement (RAM), which is a joint venture between research firms IMRB International and Nielsen Media Research. TRAI highlights that the present system of radio ratings in India is deficient as it measures only the top four markets – Delhi, Mumbai, Bengaluru, and Kolkata. Radio audience measurement or the process of mapping listenership of a radio station in a particular market is critical to the financial decisions of radio firms, advertisers, and ad agencies. This necessitates the establishment of a well-regulated performance rating system that has a wider coverage across India, and is independent. So far, feedback is largely circumspect although concerns about the government’s involvement in industry specific matters remain.

RELATED: India Market Watch: Economic Activity Indices Show Robust Growth in August and Retail Market Predicted to Double by 2020

Russia Proposes Flexible Trade Corridor with India

Russia’s Federal Customs Service has proposed that a ‘Green Corridor’ be established between India and Russia, wherein select companies will be allowed to trade their goods (on a reciprocal basis) without passing through customs inspections during border crossings. The idea was mooted last week during a meeting between the Russian Deputy Prime Minister Dmitry Rogozin and the Indian Foreign Minister Sushma Swaraj, ahead of the India-Russia Annual Summit in October. Currently, Russia is implementing the Green Corridor project with Finland and Turkey, with agreements for the same having been reached with China and Italy.

Only those entrepreneurs or companies that are characterized as “bona fide participants in foreign economic activities” can become beneficiaries of the Green Corridor. Further, this license would be granted only to those meeting the following criteria – no outstanding unpaid customs duties and absence of rulings on administrative violations in the countries of operation. Consequently, the arrangement would be as follows – an electronic pre-declaration will be issued for the cargo, which will be assigned a unique individual number identifying the firm/owner from the Green Corridor registry. There will also need to be a separate post created and a special inspector at the customs terminal in order to implement the system efficiently.

Russia hopes that the Green Corridor will expand the current scope of its bilateral trade with India that has been relatively weak despite close ties. Both countries agreed they must raise the current trade volume of US$ 10 billion to US$ 30 billion by 2025, and increase mutual investments from US$ 10 billion to US$ 15 billion. Meanwhile, Russia is also keen to be a part of the Make in India initiative, and is particularly interested in the mining, fertilizers, and civil aviation sectors.

About Us

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 india@dezshira.com 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 2016

Doing Business in India 2016 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 stay up-to-date with the most recent and relevant policy changes.

Pre-Investment Due Diligence in India
In this issue of India Briefing Magazine, we examine issues related to pre-investment due diligence in India. We highlight the different regulatory, tax, and socio-economic issues that a company should be aware of before entering the Indian market. We also detail some of the topics related to entry structures while investing in the Indian market, as well as cultural and HR due diligence, which may differ from state to state.

Strategies for Repatriating Funds from India
In this issue of India Briefing Magazine, we look at issues related to repatriating funds from India. We highlight the unique regulations for sending funds back from India, examine the various strategies companies can make use of while repatriating, and look at remittance procedures for different types of Indian entities. Finally, we give some tips on how expats can remit their Indian money to their home countries.