Cover:Serum Institute Burj Khalifa - Elevator World India

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ELEVATOR WORLD India • 4th Quarter 2010 •
Readers’ Platform Continued
agreements and other such commercial/business ventures.
Acquiring an existing Indian company or partnering with
an Indian commercial entity aids the foreign entity in
having a good representative in India to establish its business
activities for the benefit of all the parties concerned.
Foreign Direct Investment (FDI)
The FDI policy permits investment in India in almost all
sectors under the automatic route, which means no prior
approval of the government of India or any statutory
authority is required. However, both under the provisions of
FEMA and regulations of the RBI, investment by foreign
entities in corporate entities of India is subject to sectoral
caps ranging from 24% to 100% and is industry relevant.
Post liberalization in 1991, most sectors have gradually
opened up to FDI and 100% foreign investment permitted
without any prior approval; i.e., under the automatic route.
Royalties
Although the provisions of FEMA permit establishment
of business in any of the forms above, payment of royalties
for technology transfers, collaboration fees, consultation
fees, etc. are subject to the rules and regulations of the
RBI as revised/notified from time to time. All outgoing
royalties from India (in whatever form) are also subject
to further taxation laws of India and the country of the
foreign entity.
Repatriation of Profits
Repatriation of all profits earned in India through business
activities is also permitted by the government of
India for the benefit of the foreign entities establishing
their business activities (subject to withholding and other
taxes, as applicable).
Advantage of India
Given the myriad opportunities provided and value
proposition offered by India (especially in the form of
technically qualified personnel, cheap labor, liberalized
regulations, an expanding market, a robust banking sector,
a mature business scenario and the like), the Indian
market cannot be ignored by any foreign entity planning
diversification, expansion and other means of improvement
of its business activities.
Professional Advice
Although the provisions of FEMA and the rules and
regulations are comprehensive, the assistance of a wellestablished
professional in the field is essential prior to
proceeding with the implementation of establishing any
commercial/business enterprise in India. The laws, rules
and regulations relating to FDI are dynamic and undergo
constant revisions and amendments. Bearing this in
mind, it is advisable to seek the assistance of a wellestablished
professional in the field even prior to commencement
of negotiations with the Indian counterpart,
or even in the event of implementing the proposal to
enter India on a standalone basis. �