China-India Business Update: Mar. 8

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Mar. 8 – Welcome to our China-India round up in which we examine the latest bilateral news and commentary affecting foreign investment in the two countries.

Here we provide a list of recent regional news of interest to China-based business individuals who may be considering doing business in, or with, India.

China 1992, India 2012
Investors able to look beyond perennial issues such as a lack of transparency and poor infrastructure in their search for growth should be able to add value to their global operations by investing now in India. Like China, India’s time has come, and global corporate strategies should declare them mutually inclusive.

Hedging China – Could Apple Manufacture the iPad in India?
The China hedge is going to become part of global supply chains – the question of where else to establish a network to hedge against things going wrong in China. In a case such as Apple’s, the obvious answer would be India.

Dragon & Tiger: Wealth Creation in China, GDP Growth in India
The French Chamber of Commerce in Hong Kong held a seminar this morning entitled “India – Past Performances and Present Challenges” at which Chris Devonshire-Ellis, principal of Dezan Shira & Associates, and Ross O’Brien, of the Economist Corporate Network, both presented.

Foreign Direct Investment in India’s Single and Multi-Brand Retail
As India has liberalized its single brand retail industry to permit 100 percent foreign investment, we take a look at the regulatory issues and legal structures pertinent to establishing operations in this new dynamic market.

India and China’s Retail Industries Compared
A comparison of India and China’s retail markets reveals some lessons for retailers in both markets. The key points? Second and third-tier cities.

Foreign Technology Transfer Fees and Royalties in India
An important issue that is beginning to crop up for foreign investors in India concerns royalty payments for licensed component parts, and technology transfer fees.

China and India Discuss Territorial Disputes
Officials from India met with their Chinese counterparts in Beijing earlier this week, successfully conducting the first meeting of the “Working Mechanism for Consultation and Coordination on India-China Border Affairs,” which the two countries established in New Delhi earlier this year.

Vodafone Wins Landmark US$2.5 Billion India Tax Case
India’s Supreme Court has ruled that the British telecom giant Vodafone does not have to pay taxes and penalties for the transaction in 2007 that saw the company acquire a 67 percent stake in Indian mobile phone operator Hutchison Essar. The deal was for US$11.5 billion, and absolves Vodafone from a potential tax liability of US$2.5 billion.

Reporting Activities of Liaison Offices in India
Non-resident entities having liaison offices in India are obligated to submit a prescribed annual statement to the tax authorities in respect to their activities within 60 days from the end of the financial year.

India Sees Record FII Investment
Foreign institutional investors invested Rs. 7,598 crore net into India’s equity markets on February 24, 2012 – making it the largest ever fund flow on a single day in rupee terms.

India FDI Investment Good to Go for MNCs at Davos Forum
A report issued by Ernst & Young at the World Economic Forum in Davos says that foreign direct investment in India is set to swell in the coming years as investors look beyond perennial issues such as a lack of transparency, poor infrastructure and government policy paralysis in their search for growth.

China, India and Japan to Reduce Iranian Oil Imports
China, India and Japan are planning to reduce imports of crude oil from Iran by at least 10 percent in response to mounting pressure from the United States and its Western allies. The three countries together purchase nearly half of Iran’s crude oil exports.

Report: 2012 CFO Outlook Asia
Bank of America Merrill Lynch has conducted a survey of chief financial officers (CFOs) from mid-to-large sized Asian companies for the first time in the annual survey’s 14-year history.

Boeing’s Growth Potential in Emerging Asia
The global demand for aircraft is expected to balloon over the next two decades, according to forecasts made by major industry player, Boeing. The U.S. aerospace giant predicts global airlines will require 33,500 new aircraft worth about US$4 trillion by 2030 – 60 percent of which will be to feed market growth.

India’s Top Six Cities – Complimentary City Guides!
Asia Briefing takes a closer look at India’s top six cities (by GDP) in the newly released Indian city guides for Mumbai, New Delhi, Kolkata, Bangalore, Chennai and Hyderabad.

Dezan Shira & Associates provides foreign direct investment advice and services to clients in both China and India. The firm specializes in due diligence, incorporation, tax, accounting and other business services and operates out of its offices in China, Hong Kong, India, Singapore and Vietnam. 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.

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