Indian Security Service India is a land of entertainment and Indians are obsessed with noise. Thanks to that, abundant concerts, programmes, shows and other public gatherings are organized throughout the country. But along with that, we also quite frequently hear about such events being cancelled. No prizes for guessing! Security of such huge mass of people is always an issue, sometimes solved and sometimes not. Terror threats, lack of security and subsequent chaos; is all it takes to turn a well planned event into a disaster. So much chaos and you expect a business opportunity here? No kidding! If you are a person who likes to network and has an impressive list of contacts, then this is the avenue for you. If you happen to know people in the entertainment industry, are on good terms with the police officials and are familiar with a slew of event organizers, then there you go! Relevant registrations and license is all you need and you can take it from there. What more? There are enticing prospects to expand to security guards services as well!

1. Industry of the Month
“Security Industry in
India”
eBizWire
Vol . I Issue. VII, August 2012
Insight
Biz India News 2
Biz Policy Updates 3
The Indian Security Industry 4
Business Idea of the Month 7
StartBizIndia Discussion Platform 8
Upcoming Business Summit 9
Contact us 10
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2. Biz India News Headlines
• Public sector miner Coal India Ltd has lined up an investment of Rs 7,500 Coal India to invest Rs 7,500
crore to develop railway tracks and related infrastructure to evacuate coal cr on rail infrastructure in 3
from Chhattisgarh, Jharkhand and Odisha. These would help the company to States
evacuate around 100 million Tonnes (mt) of additional coal from each of the
States on 16th July 2012.
• The Central Board of Secondary Education (CBSE) is likely to take the lead CBSE agrees to introduce
in introducing financial education in its post primary level curriculum after financial education in school
th
taking a leaf out of Reserve Bank of India's financial literacy goal on 17 July curriculum
2012 RBI recognises that basic knowledge about monetary aspects play a
key role in financial inclusion and inclusive growth. Imparting financial
education among the masses at the early stage of a life cycle can make a
real difference in a country where many do not get the opportunity to study
beyond school level.
•
th
On 18 July 2012, Ford India has expanded the diesel engine production Ford expands diesel engine
capacity at its plant in Maraimalainagar, near Chennai. This, the company capacity at Chennai plant
hopes, will help address the supply constraint it faced early this year. In the
first quarter of the year, Ford India’s Chennai plant was unable to meet the
demand for diesel power-trains. Customers had to wait for three months to
have their cars delivered.
•
th Mankind Pharma set to tap
On 19 July, 2012, Mankind Pharma planned for a major turnaround over the
next two to three years. The Rs 2,000-crore Company, best known for its core drugs market
consumer brands like Prega News, Manforce, Unwanted-72 and Kaloree-1,
is now eyeing the market for diabetes and cardiovascular drugs to record
growth in both turnover and profit.
•
th
On 20 July 2012, Onco Therapies, a wholly owned subsidiary of pharma Strides Arcolab unit gets
company Strides Arcolab, has received two US FDA (Food and Drug USFDA nod for anti-cancer
Administration) approvals for ‘Fluorouracil Injection USP’. Fluorouracil is part injection
of the oncology portfolio licensed to Pfizer for the US market and expected to
be launched shortly, a press statement said. Fluorouracil is a chemotherapy
drug which interferes with cells making DNA and RNA, and stops the growth
of cancer cells. It is used to treat several types of cancer including colon,
rectum, and head and neck cancers.
•
nd
On 22 July, 2012, Pranab Mukherjee was elected the 13th President of Pranab Mukherjee elected
India, capping the long innings of the veteran Congress leader and the 13th President of India
party's chief troubleshooter over the past eight years. The former finance
minister and the candidate of the ruling UPA, who garnered 69.3% votes,
defeated his rival PA Sangma, the candidate backed by AIADMK, BJD and
NDA (minus Shiv Sena and JD-U), by a bigger than expected margin.
• The Diamond business in India is growing at 20 % year on year. Globally the India to contribute 20% of
diamond market is seeing a single digit growth of 3-5 percent. “Forevermark Dee Beers’ diamond sales in
is growing at 50 percent worldwide –well above the global growth. But our 5 years
base is small since we launched only in 2009,” said Mr. Lussier, De Beers’
rd
ED, External and Corporate Affairs on 23 July, 2012.
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3. Legal Headlines
Biz Policy Updates
• New Investment Scheme for QFIs • New Investment Scheme
for QFIs
With a view to promoting further investment in India by Qualified Foreign
Investors (QFIs), Reserve Bank of India has come out with a Scheme for
Investment for QFIs in Indian corporate debt Securities vide its A. P. (DIR
Series) Circular No. 7 dated 16.07.2012. The Indian Corporate Debt
securities means listed Non-Convertible Debentures(NCDs), listed bonds
of Indian companies, listed units of Mutual Fund debt Schemes and “to be
listed” corporate bonds.
QFIs can invest in these securities subject to certain terms and conditions
enumerated below:
• QFIs are required to open a single non-interest bearing Rupee Account
for routing the receipt and payment for transactions relating to purchase
and sale of securities.
• The funds in this account shall be utilized for purchase of eligible
securities for QFIs or for remittance (net of taxes) outside India.
• Sale of eligible debt securities can also be done through a registered
stock broker on a recognized stock exchange in India.
• QFIs would be allowed to open a single DEMAT account with a QDP in
India for investment in all eligible debt securities
• Total overall ceiling of investment is USD 1 billion. This limit shall be
over and above USD 20 billion for FII investment in corporate debt.
• Foreign inward remittance shall be through normal banking channel in
any permitted currency (freely convertible) directly into the single non-
interest bearing Rupee account.
• QDPs will ensure KYC of the QFIs as per the norms prescribed by
SEBI. AD Category-I banks will also ensure KYC of the QFIs for
opening and maintenance of the single non- interest bearing Rupee
accounts as per the extant norms.
• The pricing of all eligible transactions and investment in all eligible
securities by QFIs under this scheme shall be in accordance with the
relevant and applicable guidelines issued from time to time
• In addition to the reporting to SEBI as may be prescribed by them,
QDPs and AD Category-I banks (maintaining QFI accounts) will also
ensure reporting to the Reserve Bank of India in a manner and format
as prescribed by the Reserve Bank of India from time to time.
Relaxation:-
No more requirements for opening and maintenance of a single rupee
pool bank account by the QDP and QFIs can henceforth invest in all
‘eligible securities for QFIs’ through a single non- interest bearing
Rupee Account.
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4. Indian Security Market
The Indian Security Industry
With 28 states, 7 union territories and a population of 1.22 Billion; India
Investigation
sure is a huge country. With the huge size comes a huge list of needs. Services
You would say Food security, Education, Infrastructure, Transport, Good
Sanitary conditions, Social welfare et al. Did you say Security? Manned Security
Maslow, a world famous psychologist known for his hierarchy of needs;
brought to paper the thought which people generally fail to realize. The
second most important need after food & shelter is the need for protection Security Systems
& security. That comes even before the need for love, social esteem and
self-growth. Believe it or not; ask yourself and you’ll know it’s true.
Security
Though we hardly notice it, security finds a place in the country as a full- Assessment
blown security industry which is growing steadily year after year. In fact,
it’s true that there are more security guards than the number of
policemen. Fire Detection
“The private security industry is growing rapidly around the globe and
employs twice as many people as governments have police officers”
REUTERS
The security Industry can broadly be categorized into 2 parts;
Security
Particulars Services Sector Systems Sector Industry
Classification Private manned Security through
guarding (i.e. security devices (i.e. Bank
guards) & Investigation alarms, system Services Systems
Services integrators, CCTV,
Access Controls)
Statistics
G4S, SIS, Tops, SDB, Honeywell, GE, • Globally, US$150
Major Players Cisco, Peregrine, Bosch, Tyco, billion industry, which
Checkmate, Premier, Siemens, HID, etc is quite huge
GI Security among • Growth rate of 20%
others over past 10 years and
would achieve a rate of
25% annually in future
•
rd
1/3 spend on airport
Services Sector:-
security
• Number of Security
This sector by and large comprises of the manned guarding services and
Companies: 15000
it dominates the Security industry in India. It has some giant players which
operate nationwide through their regional and city offices. • Number of Private
Guards: 5.5 million
approx.
They even provide in-house training facilities and job orientation
programmes. There are smaller companies as well but owing to the less (Source: Security Report in
funds available; the quality of their services cannot be compared. ASSOCHAM in 2011)
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5. The Indian Security Industry Security Equipments Market
Around 15000 security companies employing about 55 Lakh security
guards, the Indian security services industry is touted to grow at a very
high rate as per the report on Security Industry by Assocham. Not only
this, the industry happens to be the country’s largest corporate tax payer
as per the Central Association of Private Security Industry (CAPSI). The
change in the growth rate is a substantial development because just
before the barbarian terrorist attacks in Mumbai that shook the whole
country; the security sector was witnessing a growth of 20% per year.
The government is the major player in ensuring security. A number of
innovative projects like Crime and Criminal Tracking Network and
Systems (CCTNS), Immigration, Visa and Foreigners Registration &
Tracking (IVFRT), National Intelligence Grid (NATGRID, etc. are being
implemented where tremendous opportunities exists for the private sector.
Systems Sector: - Gadgets used:
Started with very basic devices like bank alarms, this sector has rapidly • CCTVs
grown to include devices made with the state-of-art technology like • Access Control
CCTVs, Access Controls, Intrusion Detectors, Door intercoms, etc. It is Systems
majorly an import based sector with more and more foreign players • Metal Detectors
coming to India and collaborating with the domestic businesses, • Security Doors
appointing distributors and offering sales & after sales support. • Door Intercoms
The security equipment is largely imported from USA, UK, Germany, Gadgets imported from different
Singapore, Italy, Hong Kong, Israel, Japan, Korea, China and Taiwan. countries like Israel, China,
Korea, UK and US
The framework regulating the Security Agencies:-
Steps to start Security
To improve the benchmarks for private security in the country and Business in India:
regulating the industry through a licensing process, Private Security
• Register Business Entity
Agencies Regulation Act was enacted in 2005. The act therefore sets
forth various standards and requirements which need to be fulfilled if a (Company/LLP)
Private security agency wishes to get licensed. Some of them are: • Obtain Basic Tax
Numbers PAN & TAN
• 160 hours of training before deployment.
• Owners and major shareholders of the agency to be citizens of • Register under Labour
India. (Foreign firms are however allowed to enter into a laws
relationship with domestic ones)
• Register under Shops &
• Verification of antecedents of the person wishing to start a
business in private security. Establishment Act
• Maintenance of registers containing details of security officials, • Get PSRA license
managers, supervisors, clients and other such particulars as may
be prescribed.
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6. The Indian Security Industry
How to get registered as a Private Security Agency:-
The following simple steps need to be followed to get registered as a
Private Security Agency:
• Registering your business venture after checking the availability of the
desired name.
• Registering for Income Tax and other Statutory Authorities i.e. applying
Companies in Security
for basic tax numbers;
Industry in India
i. PAN
ii. TAN
iii. Service Tax
• Registering your Domain Name
• Opening a Current Account with the Bank
• Obtain License under Private Security Agencies (Regulations) Act,
2005 (PSRA)
• Registration under various Labour Laws
• Registration under Shops & Establishments Act, 1948
• Arranging for guards and security equipments
Challenges faced by the Security Services Sector:
Though the industry is flourishing, some bottlenecks which are mentioned
below continue to plague the sector.
• A typical security guard in the country generally lacks proper training;
is often under-screened, not properly supervised and not paid
satisfactorily.
• The industry still hasn’t bloomed properly. The quality of officers is
improving but only gradually; and hence that difference in the quality of
services offered is not very prominent in spite of the increasing
investments in this sector.
• Though guards are trained in areas like firefighting, fitness, reading & Security Service
writing in English, the training needs to be more rigorous.
Business in India:
• Lack of uniformity in adoption of the Private Security Agencies
(Regulations) Act 2005 has caused inconsistency in the security of one
• Guarding Service
state and the other. Only 10 states out of the 28 have adopted the Act
so far. Soon, 3 more states are expected to follow the suit. • ATM Security
• Some business groups are at loggerheads with the State Governments
which is a cause for delayed implementation of the law in those states. • Background Screening
• Some states have their own regulations as far as the security is
concerned which makes it unclear as to which law is given precedence • Manpower Consultancy
over the other. Especially after the Mumbai attacks, the government is
facing a lot of pressure to grant license to security guards to carry • Event Security
weapons
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7. The Foreign Comrades
The Indian Security Industry
A big positive for the sector is
that players in the foreign
Foreign Direct Investment
market are coming forward to
The FDI in the private security sector is limited to 49%. It seems to be the collaborate with the domestic
perfect proportion which this industry can expect because of the following agencies. Such partnerships
advantages: can do a world of good for the
Indian security industry.
• It allows the indigenous security firms like SIS to gain a strong Interest has been shown by
foot-hold in this fast growing sector. foreign entities in the following
way:
• Foreign players bring along expertise through their tie-ups; which
is genuinely important for the security of our country.  Joint venture between
ARES Group (Israel)
and APS Group (India),
Source: FDI policy with the Israel firm
providing consultancy
Business IDEA OF THE Month and training to the Indian
partner.
 Israel Military Institute
offers training courses
for Indian Security
Executives.
 American consultancy,
Events Security Service AFI International has
offered to provide
India is a land of entertainment and Indians are obsessed with training to third-party
noise. Thanks to that, abundant concerts, programmes, shows private security officials
and other public gatherings are organized throughout the of its clients. It first
country. But along with that, we also quite frequently hear about conducts an audit to
such events being cancelled. No prizes for guessing! Security of figure out the weak
such huge mass of people is always an issue, sometimes areas in the training
solved and sometimes not. Terror threats, lack of security and protocols of the client
subsequent chaos; is all it takes to turn a well planned event and then works on
into a disaster. addressing the
problems.
So much chaos and you expect a business opportunity here?
No kidding! If you are a person who likes to network and has an
impressive list of contacts, then this is the avenue for you.
If you happen to know people in the entertainment industry, are
on good terms with the police officials and are familiar with a
slew of event organizers, then there you go! Relevant
registrations and license is all you need and you can take it
from there. What more? There are enticing prospects to expand
to security guards services as well!
For more info on Business setup visit www.startbizindia.in
Page |7 For Business setup queries email at
neha@indiacp.com or call at 011 40622239

8. StartBizIndia Discussion Platform
NRI wants to open a Garment Manufacturing Unit in Free Zone in India.
He wants to manufacture or import the raw materials from outside
India and export the finished goods back. Please advice for suitable
location. What is the minimum investment required to set up the
project? Can he apply for PAN Card in the capacity of NRI?
Free Zone covers SEZ (Special Economic Zone) and EOU (Export
Oriented Unit). Since, you want to manufacture garments in India and
export it to outside India, so, it is recommended to choose setting up of
EOU (Export Oriented Unit). The biggest advantage of setting up EOU is
that the unit can import capital goods, raw materials, consumables,
packing material, spares etc. without payment of customs duty. Similarly,
these can be procured indigenously without payment of excise duty.
Second hand capital goods can also be imported.
The incentives are as follows:-
a. Exemption from customs/excise duties.
b. Income Tax exemption on income derived from the business of
development of the EOU in a block of 10 years in 15 years under Section
80-IAB of the Income Tax Act.
c. Exemption from minimum alternate tax under Section 115 JB of the
Income Tax Act.
d. Exemption from dividend distribution tax under Section 115O of the
Income Tax Act.
e. Exemption from Central Sales Tax (CST)
f. Exemption from Service Tax
100% FDI investment is permitted through Automatic Route. The suitable
location is Noida, Uttar Pradesh in North India.
Minimum investment in plant and machinery and building is Rs 100 lakhs
(INR) for EOU. This should be before commencement of commercial
production. In case of SEZ, there is no minimum requirement in terms of
investment. The minimum capital requirements of forming a Private Limited
Company are Rs. 1 Lakh (INR). In addition to this, the other costs will
depend upon number of factors such as size of the business, location, land
cost, etc.
As far as applying for PAN card is concerned, NRI can apply for PAN in
India by submitting certain documents to Income Tax Department
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9. Upcoming Business Summit National
 Positioning Bengal Partnering for Growth, Development and
Sustainable Security • Positioning Bengal
Partnering for Growth,
The tremendous growth potential of West Bengal has drawn ASSOCHAM’s Development and
Sustainable Security
attention towards it and has given us a sturdy reason to come up with this
Seminar. The prime objective of the seminar is to review current policies of
the State Government for promoting investment in diversified sectors,
besides exploring new investment opportunities in various booming sectors
of the State.
th
Date: 22 August, 2012
Venue: Hotel ITC Sonar, Kolkata
 Social Entrepreneurship: Sustaining Business for Society
Indian School of Business is organising Social Entrepreneurship: Sustaining
Business for Society programme. In this programme, cases of social
ventures at different stages of development will be studied.
th th
Date: 27 August 2012 to 29 August 2012
Venue: Indian School of Business, Gachibowli, Hyderabad
• Social Entrepreneurship:
 SME ICT SUMMIT Sustaining Business for
The Summit aims to equip SMEs with the tools, resources and information Society
they need for business readiness and staying ahead of market trends with
the use of different ICT solutions.The Summit will bring together the
distinguished speakers from information technology sector to exchange
latest information on various IT solutions available for SMEs, various IT • SME ICT SUMMIT
strategies SMEs can use in order to enhance their growth, challenges faced
by SMEs for IT implementation.
th
Date: 7 September 2012
Venue: Hotel Sofitel BKC, Mumbai
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10. Contact Us
Neha Seth Visit us at
E: neha@indiacp.com
D: +91.11.40622239
A Venture of
Shipra Paul D- 38, Ist Floor, South Extn. Part I New Delhi –
E: shipra@indiacp.com 110049
T: 40622200 F: 91.40622201
D: +91.11.40622246
E: info@startbizindia.com
Disclaimer:
This paper is a copyright of Corporate Professionals (India) Private Limited. The entire content of this paper have
been developed for the new startups. The author and the Company expressly disclaim all and any liability to any
person who has read this paper, or otherwise, in respect of anything, and of consequences of anything done, or
omitted to be done by any such person in reliance upon the contents of this paper.
For more info on Business setup visit www.startbizindia.in
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