Enterprises to invest in India’s preliminary investigation should be done

India’s finance minister said on Friday that India will deepen reforms to attract more foreign investment. Data show that India last fiscal year to attract foreign direct investment fell 38 percent. Sino-Indian Chamber of Commerce, the Secretary-General Li Jian, “Global Times” reporter, said, “Many Chinese companies did not do adequate pre-market research or no research, just that there are profits to be made the Indian market, do not understand the Indian market or the case of the investment environment, directly over, the results often make themselves into a passive position, a dilemma. “reporter has learned that Chinese companies investing in India, do not understand the local laws and regulations and the investment environment, it is dogged because of” less tax “and received huge fines and even sued, or less calculating duties on completion sudden cost increases, as well as good with local stakeholders benefit-sharing is difficult to fight for more rights and other crises .
In recent years, India’s fast-growing domestic market to attract more and more Chinese enterprises stationed. According to the reporter, currently in India Chinese enterprises covering infrastructure, electricity, machinery, minerals, pharmaceuticals, services and other industries to medium-sized enterprises, a subsidiary, representative or project office based. Li Jian said that in the past six months, have been held more than 20 Chinese enterprises to find associations on issues related to consultation, involving manufacturing, electronics, infrastructure, services and other industries.
“Investing in India, to understand local policies and regulations is necessary, otherwise we may therefore lose”, Heilongjiang Long Jian Road and Bridge Corporation of India project leader Liu Shujun, “Global Times” reporter, said that if India a land tax, in addition to the Land Tuchang owners pay fees, the need for earth or stone to the local government to pay resource tax. 2005, the company received a project in Gujarat, India, because they do not know this requirement, the payment of fees Tuchang commence directly after excavation, the results of local land management department and the police seized equipment jointly mobilized and asked to pay the amount of tax payable 100 times the fine. “Our first reaction was deliberately making things difficult for local government officials, find a lawyer to understand before they understand that it is our fault, so owners of the Indian National Roads Authority request to the local government to explain the situation, said that lack of knowledge of Indian tax regulations make such an error, and no intention of tax evasion and later through various efforts, the local government decided to immediately return all the equipment, pay the tax payable and pay the minimum fine. ”
It is understood that the Indian tax law complexity, taxes and more for Chinese companies more cumbersome tricky. A home in the Indian domestic tax as a result of the negligence of the company and subject to withholding tax investigations, and received millions of dollars a ticket, and is currently working on this in the Indian court. Again, India in 1995 a decree construction companies need to 1% of the total project labor welfare taxes turned over, the implementation of different states. Many Chinese enterprises in the tender do not understand this, the end result works sudden increase in costs, which caused a lot of economic disputes.
Of course, problems encountered by enterprises should also be adept at using local legal weapons to protect their interests. A Chinese infrastructure company in 2009 to undertake a particular project, in 2011 the requirements of owners with some changes to the contract and promised to pay for projects to change later in the project is nearing completion, the owners’ representative changes, the new representatives that change the contract is invalid, refused to pay the change for projects, and has been removed from the original representative said posts, have no say. This gives the company resulting in the loss of about 20 million yuan. In many communication ineffective negotiations, the company finally decided to take legal action.
Li Jian said, “Chinese companies in India encountered another problem is not with stakeholders benefit-sharing, most of the time focused on the customer, the short term yes, but the long term, there are flaws, they do not know with the government, parliamentarians, trade associations, media and other communication and coordination, so as to strive greater benefits. “