Legal & Regulatory

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.

India’s Legal System in Need of Overhaul


Feb. 13 – Even as the Indian economy races ahead to become bigger and stronger, the country’s legal system lags behind. According to the Chief Justice of India, A.P. Shah, it would take the Delhi High Court 466 years just to clear its backlog of criminal cases.

In a report released by the judiciary, the lax legal system is a result of three major factors – the low number of sitting judges per population, India’s high rate of corruption and the tedious process of registering a court case.

The associated press reported that although the Delhi High Court resolves cases at an average speed of four minutes and 55 seconds, it still has innumerable cases pending including 600+ cases that are more than 20 years old. The United Nations Development Program estimates that some 20 million legal cases are pending in India. As a result, its not uncommon to hear stories of court cases lasting longer than the average human lifespan.

Foreign Law Firms Can now Register in India


Feb. 10 – Under the newly released Limited Liability Partnership Act 2008, foreign law firms are allowed to register and offer consultation services in India but not practice law. The new enactment was enforced as multinational companies needed international law firms to represent them across borders in complex international deals. The law ministry also felt the introduction of foreign firms would infuse professionalism creating global law firms of Indian origin.

"Foreign law firms can register in India under Section 59 of the LLP Act, for which rules are being framed, and offer consultation. But they can't practice law as right to legal practice is controlled by the Advocates Act which permits only an Indian lawyer enrolled in Bar Council here to do so,'' Union law minister H R Bhardwaj told the Times of India.

The Limited Liability Partnership Bill, 2008 seeks to give companies the best of a partnership and corporation set up. Incorporated under the Indian Companies Act 1956, a partner of an LLP firm is not liable for another partner's misconduct or negligence – each partner’s liability is limited to their agreed contribution in the LLP. Further the partners have the right to manage the business directly, allowing businesses where all investors wish to take an active role in management to flourish. An LLP is seen to be best suited for the services industry and for small scale industries which do require flexibility in legal set up procedures.

India to Form a National Agency to Fight Terrorism


Dec. 17 – Following mass public outrage at the bureaucracy, lack of finances and poor national co-ordination Indian security agencies get entwined in post the Mumbai terror attacks, the Indian government passed a bill allowing the formation of a national agency to investigate major militant attacks.

Proposed by the new Home Minister – P. Chidambaram, the Central Industrial Security Force Act if passed into law would establish a National Investigations Agency, styled on the US Federal Bureau of Investigation (FBI) or the UK’s MI5.

The NIA will be governed by the Defence of India Rules, normally used in times of war, giving the agency overriding powers to take over the investigation of terror attacks without direct interference from the states. The agency was earlier opposed by India’s 29 states as they felt it would allow the national government to usurp local law enforcement powers.

Goa Tries to Prevent Foreigners from Buying Illegal land



Nov. 7 – Sun, sea and cheap land are attracting many westerners to buy illegal land from organised land mafia's along the golden beaches of Goa. Located just south of Mumbai, foreigners flock to the ideallic beaches of Goa, for a holiday, many later decide to stay on in what was formerly a portuguese colony.

According to Indian law, foreigners are free to buy real estate, but within limits: Any money invested in the country must stay in India, and for the first year, buyers must be in residence more than 182 days and file income tax.

Government Plans to Alter FDI Policy for JV’s



Sept. 5 – The Indian government is planning to rework the foreign direct investment (FDI) policy for holding companies. According to the regulations, joint venture companies with foreign equity will need to seek fresh approval from the Foreign Investment Promotion Board (FIPB) within 90 days while investing in downstream companies like subsidiaries.

The FIPB clearance will be mandatory to avoid imposition of penalty by the Reserve Bank of India (RBI). The government said detailed guidelines for downstream investments by joint ventures with foreign equity will be issued shortly. These companies will be given a three-month grace period for regularising downstream investments, according to the Economic Times.

Everybody’s Right To Information



July 16 – India's bringing the best of its legal and technology sectors together – the government is considering setting up a Right to Information call centre. After the success of the Right to Information Act enforced in 2005, which gives the citizens of India access to government information, empowering them to hold the state accountable, the call center will make the act more accessable.

If all goes well, the call center will allow applicants to seek information over the phone from any of the central government departments and organizations across the country, reported the Times of India.

The call centre will save citizens the trouble not only of writing and posting the RTI applications to different public authorities but also of buying postal orders or demand drafts for paying the nominal fee of Rs 10.

India’s First Climate Change Plan



July 4 – India has revealed its first climate change plan before the G8 summit in Japan next week. The plan outlines eight "missions" for sustainable development – solar energy, energy efficiency, creating a sustainable habitat, conserving water, preserving the Himalayan ecosystem, creating a green India, creating sustainable agriculture and establishing a platform of "strategic knowledge for climate change.

While the plan lacks a proper budget and plan of action, the government seems keen to implement their enviromental ideas. A story by cnet news says that of all the plans, the Indian government seems most keen to implement solar energy. Given the resource is abundant in India, they plan to invest heavily in factories manufacturing solar cells.

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