Doing business in India: What you need to know to operate a company in this high business opportunity environment

Despite India’s  high economic potential, the country remains a hard accessible business area due to the political instability and the numerous required procedures. Starting a business there represents a long and expansive process that demands  time and money

The Government has liberalized laws, terms and conditions that multinational companies have to follow to be in good standing with the law.

Getting construction permits, credits, electricity supply, paying taxes, registering property, enforcing contracts, trading across the borders or resolving insolvency are the issues that foreign companies have to deal with when trying to enter the Indian market. All these factors should be taken into considerations before thinking about settlement on the territory

• Getting electricity: Contrary to other south Asian countries, in India the cost of electricity is cheap, but there is a large number of procedures to follow. For example, it can take around one week to receive an external site inspection and three  to get externally connected, have a meter installed and conduct a test installation
•  Starting a Business: is facilitated thanks to the government initiative to merging the applications for the Permanent Account Number (PAN) and the Tax Account Number (TAN), and improving the online application system.
• Dealing with Construction Permits: the government has implemented an online system that has streamlined the process of obtaining a building permit, thereby reducing the number of procedures and time required to obtain a building permit in India.
• Getting Credit: Access to credit has been reinforced with the amendment of the rules on priority of secured creditors outside reorganization proceedings and the adoption of a new law on insolvency that provides a time limit and clear grounds for relief to the automatic stay for secured creditors during reorganization proceedings.
• Paying Taxes: Payment of EPF is henceforth mandatory electronically and administrative measures easing compliance with corporate income tax has been taken. Businesses that operating in India should make  33 tax payments a year
• Trading across Borders: It is difficult in India to import and export goods so, measures have been taken to improve infrastructure at the Nhava Sheva Port. Export and import border compliance cost was also reduced by eliminating merchant overtime fees and through the increased use of electronic and mobile platforms.
• Enforcing Contracts: Thanks to the implementation of the National Judicial Data Grid, which enable to generate case measurement reports on local courts, enforcing contracts became easier
•  Resolving Insolvency: it takes around 3-4 years to resolve insolvency in India, so a new insolvency and bankruptcy code has been adopted. It introduced a reorganization procedure for corporate debtors and facilitated continuation of the debtor’s business during insolvency proceedings

Once all the administrative procedures required are completed, it is now time to focus on the cultural process, In fact, to start a business in India, it is important to know about the business culture.The rules are not the same and as a foreign company owner there are some precautions to take for a successful development and this goes through some cultural usages. There are significant differences regarding business perception. In fact, business is more a question of relations than figures and results, that means a local knowledge is the key element to succeed in this complicated enterprise

In spite of the existence of many languages in the Republic of India ( official country name) English and Hindu are the official ones.English is used as official business language so it must be mastered to communicate with local population and associates

•  There are two types of companies in India. The first one is a traditional, family-run business, the second being a more modern hi-tech operation working with western business methodology. Most of the decisions are made by the top of the hierarchy and negotiating at the middle levels of a company is considered as a waste of time if top level did not give its approval
•   Normal business dress for men is suit and tie but because of its warm climate, a long sleeve shirt and a tie are accepted. It is also important to select neutral colors, which are subdued and not very bright. For women, skirts which do not cover the knees are inappropriate
•  Indians appreciate punctuality so it is advisable to make appointments at least one month in advance and confirm them when arriving in India. The use of Business cards is very common so make sure it is translated into English

     CHARBONNE Enrique