Multinational Corporations Doing
Business in India, US Companies Doing Business in India
What Every
Multinational Corporation or a USA Corporation Needs to Know
About Investing in India or Doing Business with India?
India, the world's fastest growing free-market
democracy, presents lucrative opportunities for all types of
businesses - especially U.S.A. companies.
In 2005, U.S. merchandise exports to India were
almost $8 billion, doubled since 2002. The Indian market and its
one billion plus population, presents lucrative and diverse
opportunities for U.S. exporters with the right products,
services, and commitment.
India’s infrastructure, transportation, energy,
environmental, health care, high-tech, and defense sector
requirements for equipment and services will exceed tens of
billions of dollars in the mid-term as the Indian economy
globalizes and expands. India’s GDP, currently growing at around
7 percent, makes it one of the fastest growing economies in the
world. Construction of nearly everything from airports to
container ports to teleports is setting the stage to remake
India.
Does your company have an India strategy? Does your company have
a plan about how to do business with India?
Steps for Foreign Investors Doing Business with
India
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Entry Options
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Tax Strusctutring
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Multinational Corporations
A multinational corporation (MNC)
or transnational corporation (TNC) or
multinational enterprise (MNE) or multinational
organization (MNO) is a corporation/business
entity/enterprise that manages production establishments or
delivers services in at least two countries.
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Multinationals
have played an important role in globalization. Given their international
reach and mobility, many countries, and sometimes regions within countries,
sometimes compete with each other to have MNCs locate their facilities (and
subsequent tax revenue, employment, and economic activity) within.
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Multinational corporations (MNC) are often
divided into three broad groups:
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Horizontally integrated multinational
corporations manage production establishments located in
different countries to produce the same or similar products.
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Vertically integrated multinational
corporations manage production establishment in certain
country/countries to produce products that serve as input to
its production establishments in other country/countries.
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Diversified multinational corporations
manage production establishments located in different
countries that are neither horizontally or vertically
integrated
.
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There is a
dispute as to which was the first MNC. Some have argued that the Knights
Templar, founded in 1118, became a multinational when it stumbled into banking
in 1135. However, others claim that the Dutch East India Company was, which
first appeared in 1602.
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Multinationals have played an
important role in globalization. Given their international reach
and mobility, prospective countries, and sometimes regions
within countries, must compete with each other to have MNCs
locate their facilities (and subsequent tax revenue, employment,
and economic activity) within. To compete, countries and
regional political districts offer incentives to MNCs such as
tax breaks, pledges of governmental assistance or improved
infrastructure, or lax environmental and labor standards
US and
Indian Corporate Compliance Programs
The US Companies or American
Companies who do business overseas have to comply with the US
laws regarding foreign investment including US Foreign Corrupt
Practices Act.
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IT
is mandatory to set up corporate compliance programs including cyber law
compliance program. If you company does not have the compliance program,
then contact us to help you set up one for you.
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In addition, all the
Multinational Companies Doing Business in India have to comply
with the corporate and other laws of India including cyber
law compliance.
The cyber law mandates all
companies to have an information technology security policy.
This documents the architecture of the network, the roles and
responsibility of employees, security parameters and
authorization required for data access, among other things.
Other compliances that are required include relate to retention
and authentication of electronic records and security of data.
Some of the companies doing
business in India are setting up voluntarily affirmative action programs.
Not complying with the US and
Indian laws may result in sanctions against the company.
Best Prospects
LEADING SECTORS FOR US EXPORTS AND INVESTMENTS
The following are the 14 best prospect sectors for India in
terms of imports from U.S. ranked in alphabetical order for the
year 2005.
| INDUSTRY SECTOR |
IMPORTS (in U.S. $ million) |
| Airport & Ground Handling |
60 |
| Computers & Peripherals |
900 |
| Education Services |
1,703 |
| Electric power generation, transmission and distribution
equipment |
370 |
| Food Processing & Cold Storage Equipment |
39 |
| Machine Tools |
96 |
| Medical Equipment |
237 |
| Mining & Mineral Processing Equipment |
330 |
| Oil & Gas Field Machinery |
350 |
| Pollution Control Equipment |
508 |
| Safety & Security Equipment |
70 |
| Telecom Equipment |
550 |
| Textile Machinery |
50 |
| Water |
11 |
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