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    Gov’t Planning to Change Audit System

    May 7 – The Indian government is planning to change to a new accounting system for its annual financial statements in five years time to accrual-based accounting for transparency. The new system will allow the government to record transactions although cash will change hands later on. This will be more effective in showing the government’s[…..]

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    Tax on Sedans, SUVs May Be Removed

    May 6 – India’s Ministry of Heavy Industries is recommending that additional excise taxes on Sedans and SUVs like Ford Fiesta, Maruti SX4, Hyundai Verna, Honda Accord, Scorpio and Innova may be cut to boost demand in the auto industry. Last year, the government meted the additional excise duty of Rs 15,000 for vehicles above[…..]

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    Dezan Shira & Associates Reorganizes Mumbai Office

    Apr. 24 – The professional services firm Dezan Shira & Associates, taking advantage of recent regulatory changes, have registered an LLP in Mumbai, increased staff, and confirmed that the founder of the practice, Chris Devonshire-Ellis, will become the firm’s managing partner in India. Devonshire-Ellis, who resigned from the firm’s China practice in February, will formally[…..]

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    Largest Exchange to Enter Indian Market

    Apr. 15 – The largest exchange in the world, the Chicago Mercantile Exchange (CME), has held talks to possibly enter the Indian market through the purchase of equity stakes in the Indian exchanges. According to the Business Standard, CME has already talked with several Indian exchanges to purchase stakes. The group is also talking to[…..]

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    Foreign Investors in Realty Locked in for Three Years

    Mar. 25 – In a new ruling the Foreign Investment Promotion Board has said that foreign investors in real estate cannot sell their stake to another foreign investor before termination of the lock in period of three years, the Economic Times reported.

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    India Needs to Expedite Preparations for 2010 Commonwealth Games

    Feb. 26 – A parliamentary panel released a report on Wednesday stating that the Commonwealth Games scheduled to be held in New Delhi in October 2010 would need nothing short of a miracle to be completed on schedule. At a time when India and China are competing neck and neck for Asian dominance, India seems drastically under prepared for what the country hails as India’s Olympics. According to the report, only half of the 30,000 extra hotel rooms and most of the sporting venues needed would be completed by October.

    The panel blames the lackadaisical attitude on the poor coordination between the various government agencies. "The 2010 games are drawing near and so many projects are yet to be initiated, let alone being completed," the AFP quoted the report by the panel on transport and tourism headed by federal lawmaker Sitaram Yechury.

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    Regulation on Investing in Indian Equity Gains Clarity

    Feb. 23 – Foreign firms looking at investing in Indian companies on an installment basis now have more clarity. A Foreign Investment and Promotion Board official recently clarified regulations for FDI via partly paid up equity. According to the clarification, the FIPB will allow Indian companies to issue partly paid up capital to foreign companies if the foreign companies agree to fully pay the requisite equity within 18 months.

    The clarification means that there is no longer any disconnect between the Foreign Exchange Management Act and the Companies Act. Earlier, the FEMA didn’t allow issue of partly paid-up shares to non-residents while the Companies Act permitted it. This created ambiguity in the law leading FIPB officials to decide on partly paid up capital on a case by case basis.

    As the financial crisis grips India tighter, the country is opening its doors wider to FDI. The Cabinet Committee on Economic Affairs (CCEA) recently released a statement that equity investments routed through companies in which a majority ownership and control is in the hands of Indians would be treated as fully domestic equity. The move effectively made room for millions of dollars of FDI to pour into the country.

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    Obtaining Technology Collaborations with India

    Feb. 20 – India’s technology prowess and large consumer market is attracting transfers in both technology products and services. While India encourages both the transfer of technology and technical services it lays down certain ground rules for the import, sales and export of technology from Indian soil.

    Below are some of the rules and regulations governing technology collaborations for foreign firms in India:

    a. Technology Licensing

    Technology licensing to Indian companies is permitted and encouraged under Indian exchange control regulations. Payment of royalties up to certain limits is permitted without any prior regulatory approvals. These limits are lump-sum royalties of US$2 million, and recurring royalties of 5 percent on domestic sales and 8 percent on export sales, based on the net ex-factory sales price of the products.

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