Prashant Shukra - Doing Business In India

Doing Business in India
Prashant Shukla
Director: Ireland-India Council
&
Partner: East West Commercial Enterprises Limited
22 March, 2010
Dublin City University

Doing Business in India
India
Indian Market Overview
Understanding the Legal Framework
Manpower Excellence
Priority Sectors Opportunities in Indian Market
IIC Connecting to Irish & Indian Companies for Expert Advise & Services

INDIA
India is a union of states and union territories
Governance: Parliamentary
Land Area: 3.29 Million Sq. KM
Capital: New Delhi
Time Zone: + 5 & 1/ 2 Hrs GMT
Population 1.15 Billion
Climate: Mainly Tropical
Language: Mainly Hindi & English
Religions: Hindu, Islam, Christian, Buddhism, Jainism, Sikh, Jews etc.
Currency: Rupee (INR)
(1 Rupee=100 Paisa)

INDIA
Key Facts
7.5 % Average Annual Growth Rate
Exports from India 14.6 billion in December 2009, 9.4 % higher from November 2009 .
Overseas Investors induced $ 816.69 million into stock market in the first trading week of 2010.
Net capital inflow into India in the current fiscal year will be $ 50 billion according to Dr C Rangarajan, Chairman of Prime Minister’s Economic Advisory Council.
After purchasing 200 tons gold from IMF, India has now the highest gold reserve as a percentage of total forex reserves, among the BRIC countries.
Indian pharmaceutical retail market grew by 29.24 percent in 2009
E-Commerce is growing at 30% annually
Rural Market grew 40% annually

Main Economic Drivers
High Consumption
Skilled Work force
High Tech Capital Intensive Industry
Entrepreneurism
Remittances from Indian Diaspora
Growing Middle Class
Linked with Global Economy
Stable Banking

Indian Middle Class
1% of the people have been crossing poverty line each year for 20 years = 200 million
Poverty Declining
Rapidly growing middle class – fuelling domestic production

Priority Sector & Opportunities
Education
Energy & Power Equipments
Oil & Gas
Aerospace
Information & communication
Beverage and Food Processing
Service Sector
Transportation
Environment

Potential Growth Projections
Automotive Component Industry would touch $ 40 billion by 2015-16
Passenger Car Market will grow by 12 % annually over the next 5 years (from the present figure of 1.89 million units to 3.75 million units by 2014
SME’s are expected to contribute 22 % to India’s GDP by 2012
The Health Care Industry is projected to grow 23 % per annum to touch $ 77 billion in 2012 from current size $ 35 billion
India’s domestic business processing outsourcing (BPO) market, that is close to 500 companies, would grow at a compound annual growth rate of 33% to reach $ 6.82 billion by 2013, up from $ 1.62 billion in 2008
India targeting FDI $ 50 billion by 2012 and would double the inflows by 2017
As per study by Council for Research on International Economic Relations the retail sector is expected to contribute 22 % India’s GDP by this year

Challenges for Economic Growth
Fiscal stress from populist policies
Match the demand in the infrastructure
Unionist environment
Bureaucracy and slow justice
Boost up the productivity in agriculture sector
Maintain the pace of growth in challenging external environment
Reinforcement in human resource development
Meet the energy demand

As per data available from 2009 bilateral trade between Ireland and India was € 500 Million
In 2008 13% growth was recorded and it was expected that further it will increase 25% % annually.
Irish – Indian Trade

Understanding the Legal Framework
India follow common law system, the Supreme Court of India is the highest court, each state has a High Courts and each district has District Courts
Special courts and tribunals have also been setup to deal with issues like tax, consumer’s dispute etc.
For reconciliation and commercial disputes resolution arbitration is quite common, it is important that with all agreements/MOU’s companies have a clear clause to specify dispute resolution mechanism.

Understanding the Legal Framework- Tax
Taxes are levied by Union Government, State Governments and Local Authorities.
Revenue on foreign companies including royalty, technical services to industries like petroleum or natural gas is subject to maximum tax on a deemed profit of 10 % gross revenue.
Big projects approved by the Union Government related to power sector is subject to 10% maximum tax.
Income tax for foreign companies is 45% .
There is personal income tax and professional tax also levied on the professional earnings.
Some countries also have reciprocal tax treaties with India.

Manpower Excellence
As per 2007 data India has 18,064 Colleges and 379 Universities
India produce 400.00 engineers
175 National Research laboratories
40 research laboratories run by the Council for Scientific and Industrial Research (CSIR)
15 Indian Institute of Technologies (IIT)
Over thousands Polytechnics and State run Colleges
India has excellent education institutions for higher education but cannot meet the growing demand.

IIC Connecting to Irish & Indian Companies for Expert Advise & Services
IIC provide following services to its corporate members:
Networking in desirable business sectors both in India and in Ireland
Assist its members in setting and operating their business in India and vice versa
Provide travel assistance to its members
Organize workshop and conferences to its members
Provide cultural familiarization and training to the companies staff and executives
For further information please contact
info@irelandindiacouncil.ie
www.irelandindiacouncil.ie

Thank you
prashant@irelandindiacouncil.ie
www.irelandindiacouncil.ie

Prashant Shukra - Doing Business In India

by DCU Business School on Mar 24, 2010

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