labour laws and legal environment in India


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labour laws and legal environment in India

  1. 1. LABOUR LAWS AND LEGAL ENVIRONMENT IN INDIA FOR EUROPEAN INVESTORS<br />09/05/2011<br />PARIS STAR BUSINESS SCHOOL<br />Muppala Sekhar reddy<br />Saha Rajkumar<br />Rachakonda raghavendra rao<br />
  2. 2. Introduction<br />This project explains about the foreign direct investments and legal environments in India. It also focuses on the policy of the Indian government and European Union which attracts the companies of either sides to start and run business in Europe and India vise-versa. It also contains the progress of Free Trade Agreement between India and European Union and point out the obstacles of this agreement .<br />
  3. 3. What is it about <br /><ul><li>Labour Laws and Social Security System
  4. 4. Legal Environments
  5. 5. Business Regulations
  6. 6. FDI Policy
  7. 7. India for European Investors
  8. 8. Free Trade Agreement between EU and India</li></li></ul><li>Labour Laws and Social Security System<br />Labour Laws – For the sake of the employees interest,India has several acts which are applicable in all sectors.Labour Laws fall under the following acts:<br />Trade Unions Act<br />Wages Regulation Act<br />Act for Payments<br />Working Conditions Acts<br />Temporary,Permanent and Contract Employees <br />
  9. 9. Legal Environment in India<br />The legal environment in India is as follows the rules of WTO –TRIPS(trade related aspects of intellectual property rights). <br />Intellectual property protection follow under the following <br /><ul><li>Patents
  10. 10. Trade Marks
  11. 11. Copy rights</li></li></ul><li>Business Regulation<br />The business regulatory environment covers all aspects of trade, industrial activity, taxes, foreign exchange, intellectual property and social security.<br />Business regulation broadly applies to the following aspects:<br /><ul><li>Foreign exchange regulations
  12. 12. Industrial licensing regulations
  13. 13. Trade regulations
  14. 14. Import restrictions
  15. 15. Export restriction</li></li></ul><li>FDI Policy<br />Why invest in India<br /><ul><li>Impressive growth rate: 8 % p.a.
  16. 16. Competitive manufacturing hubs
  17. 17. Emerging knowledge industries – </li></ul> IT, Pharma, Biotech, R&D<br /><ul><li>Improving infrastructure – an area of opportunity
  18. 18. Good Banking & Financial Infrastructure.</li></li></ul><li>FDI Policy<br /><ul><li>Progressive Trade and investment policy
  19. 19. Strong democratic set up
  20. 20. Independent judiciary
  21. 21. Technical education and infrastructure
  22. 22. Good law & order
  23. 23. English widely understood</li></li></ul><li>FDI Policy<br />Investing in India<br />Prior Permission<br />Automatic Route<br />By exception<br />Approval of Foreign Investment Promotion Board needed.<br />Decision generally within 4-6 weeks<br /><ul><li>General rule</li></ul> Inform RBI within 30 days of inflow/issue of shares<br /><ul><li> Pricing: FEMA Regulations</li></ul> Unlisted – CCI<br /> Listed – SEBI<br /><ul><li>Cap of Rs. 1200 Crore </li></ul>(Approx : USD $268 million)<br />
  24. 24. FDI Policy<br />Liaison Office <br /><ul><li>Promotion of business interest; spreading awareness of company’s products; explore opportunities; work as channel of communication etc.
  25. 25. Cannot carry on any commercial, trading or industrial activity or earn any income in India Is required to maintain itself out of inward remittances received from abroad through normal banking channels.</li></li></ul><li>FDI Policy<br />Branch office<br /><ul><li>Represent the business interest of foreign company
  26. 26. For the purpose of execution of the Project</li></ul>Permissible activities for a Branch Office<br /><ul><li>Export/Import of goods
  27. 27. Professional or Consultancy Services
  28. 28. Carrying out research work in which the parent company is engaged
  29. 29. Promoting technical or financial collaborations between Indian Companies and parent or overseas group companies</li></li></ul><li>FDI Policy<br />Foreign investment is not permitted in the following areas:<br /><ul><li>Atomic energy
  30. 30. Agriculture
  31. 31. Postal services
  32. 32. Plantation
  33. 33. Retail trading (except single brand)
  34. 34. Mining services
  35. 35. Real estate business</li></li></ul><li>FDI Policy<br /> Exit issues<br /><ul><li>Transfer of shares from non-resident to non-resident does not require RBI approval for pricing
  36. 36. Transfer of shares from non-resident to resident does not require any FIPB Approval, though RBI approval is required for pricing
  37. 37. Pricing as per FEMA – listed and unlisted securities
  38. 38. RBI permission not required if sale through Stock Exchange
  39. 39. Mauritius Route: Capital Gain Advantage</li></li></ul><li>European Investors in India<br /><ul><li>India is the 9th largest import partner of EU and 8th largest partner of export and trade partner.
  40. 40. EU is the largest trade partner of India with 20% of it’s trade with world.
  41. 41. Europe exported €26 billions euro of goods and services in 2009. and imports were €25 billions euro.</li></li></ul><li>Top European Investors in India<br />
  42. 42. EU and India – Free Trade Agreement<br /> Why is it necessary?<br /><ul><li>Increase in bilateral trade
  43. 43. Enhance the Investment
  44. 44. Eliminate the tariffs
  45. 45. Provide opportunities for potential exporters
  46. 46. Promote sustainable development
  47. 47. Bringing people together</li></li></ul><li>EU and India – Free Trade Agreement<br /> Facts & Figures :<br /><ul><li>EU-India Summit launched a High Level</li></ul> Trade Group (HLTG) in 2005<br /><ul><li>Start Negotiation in 2007
  48. 48. Biggest Indian Partner(20% shares)
  49. 49. Big Indian Investor(10.9 bn €)
  50. 50. FDI Flows to India ( About 65% of all)
  51. 51. FDI Flows to EU (9.5 bn €)</li></li></ul><li>EU and India – Free Trade Agreement<br /> Main Obstacles in FTA between EU and India :<br /><ul><li>Intellectual Property Rights
  52. 52. DATA Exclusivity in Pharamaceutical Sector
  53. 53. Domestic Political Hassles
  54. 54. Unbridgeable Expectation Gap
  55. 55. Challenges in area of comparative advantages</li></li></ul><li>Conclusion<br /> Efforts should be made by both side:<br /><ul><li>Better bilateral & strategic relation with EU &</li></ul> India<br /><ul><li>Should remove obstacles as soon as possible
  56. 56. Allow strategic partnership in infrastructure from both sides
  57. 57. Liberalize more Financial policy
  58. 58. Review FDI Policy towards Agricultural & </li></ul> Industrial sector<br />
  59. 59. Conclusion<br /><ul><li>Need to conduct internal consultations
  60. 60. Negotiations should be based on trade & financial </li></ul> matter<br /><ul><li>More focus on sustainable development</li></li></ul><li>Thank you<br />