China-India Business Update: Apr. 12

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Apr. 12 – Welcome to our biweekly China-India round up in which we examine the latest bilateral news and commentary affecting foreign investment in the two countries.

Mumbai and Shanghai Properties Face Decline
A number of analysts and economists believe Mumbai’s property market will see an oversupply between 2012 and 2013, and predict that real estate prices will go down in the near future, but whether Shanghai’s property market will finally become more affordable to people still remains a question.

New Issue of India Briefing: India Market Entry – The Establishment Legalities Explained
In this new issue of India Briefing we give the why and how for market entry into India. Specifically, we walk you through the eligibility requirements, tax liability, application and wind-up processes for liaison offices, project offices, branch offices, and private limited companies. For the latter, we also point out advantages over other types of offices and how these advantages may or may not apply to you.

India Allows 100% FDI in Several Key Sectors
India’s Department of Industrial Policy and Promotion has released the “Consolidated FDI Policy – Circular 1 of 2011,” that will allow 100 percent FDI in the development and production of seeds and planting material, floriculture, horticulture, and cultivation of vegetables and mushrooms under controlled conditions.

India’s FDI Trends and Analysis
India has emerged as the preferred destination for many foreign international enterprises due to constructive factors such as high economic growth, fast population growth, English speaking people, and lower costs for workers.

India Behind Only China in FDI Inflows
Despite a recent downturn in FDI inflows, India has remained the second most popular investment destination in the world, riding closely on China’s heels, according to Nomura India. Attributing the temporary decline primarily to global factors, Nomura India Vice-President and economist Sonal Varma said other emerging markets also experienced a noticeably sharp fall in FDI inflows in the wake of the 2008 Global Financial Crisis. Unlike India, however, they were quick to recover.

India Releases Third Consolidated FDI Policy
In an updated foreign direct investment policy, the government of India stated a simplification of joint venture norms and opened up new areas for overseas funds. In the milestone decision, the government eased regulations for investment by foreign companies that are present in India through joint ventures or technical collaboration.

Census: India Grows by 181 Million in Last Decade
For fans of Bollywood cinema and the country’s famous culinary prowess, India’s latest census should bring cheers of joy. The figures, released on Thursday, revealed that the country had added 181 million new citizens over the last decade – roughly the number of people in Brazil, the fifth most populous country in the world. And that figure doesn’t even consider the fairly large number of Indians born abroad.

Starbucks, Café Coffee Day Favorites to Conquer India’s Emerging Coffee Market
As India’s domestic demand for coffee rises, Starbucks has set a course for entry into a young market bound for rapid concentration by partnering with India’s Tata Coffee – the largest coffee plantation in India and parent company of Eight O’Clock Coffee Co.

Virtual World Providing Developing Countries with Real Opportunities
Who says that online gaming isn’t constructive? According to a report by the World Bank, online currencies and work done in the digital world is worth a staggering US$3 billion, and is providing real-world opportunities to people in developing countries such as India and China. Over 100,000 people in the developing world earn their living through online games and web sites that provide micro-tasks.

Dezan Shira & Associates provide foreign direct investment advice and services to clients in both China and India. The firm provides due diligence, incorporation, tax, accounting and other business services from ten China offices and five in India. Please contact the practice at china@dezshira.com or india@dezshira.com as appropriate, visit the firm’s web site here, or download the firm’s brochure here.

With a focus on the business opportunities in two of the world’s fastest growing economies, Chris Devonshire-Ellis – founder of Dezan Shira & Associates and China Briefing – will be hosting an event at the Royal Overseas League in London on April 14th discussing the differences and similarities for foreign investors in the China and India markets. As the event’s key speaker, Chris will address the following topics:

  • China-India market demographics
  • Investment environments and infrastructure
  • Operational and logistics
  • Comparisons of legal establishment structures
  • Tax regimes and investment incentives

To RSVP and to find out more information on the event, please click here.

Related Reading
Doing Business in China
Our 156-page definitive guide to the fastest growing economy in the world, providing a thorough and in-depth analysis of China, its history, key demographics and overviews of the major cities, provinces and autonomous regions highlighting business opportunities and infrastructure in place in each region. A comprehensive guide to investing in China is also included with information on FDI trends, business establishment procedures, economic zone information, and labor and tax considerations. Priced at US$40 (PDF)

Doing Business in India
Our recently published, 156-page business introduction to India, the second fastest growing economy in the world, providing a thorough and in-depth analysis of India, its history, key demographics and overviews of the states and union territories highlighting business opportunities and infrastructure in place in each region. A comprehensive guide to investing in India is also included with information on FDI trends, business establishment procedures, economic zone information, labor and tax considerations, as well as an analysis of Indian business etiquette and culture. Priced at US$40 (PDF).