While many obstacles to foreign currency have been removed, there still stay formidable challenges for a foreign investor conducting business in India. Understanding and preparing to get these challenges is that the key to success in India. We discuss a number of that the key challenges in that the paragraphs which follow. Foreign Investment – Foreign investors are now able to invest directly in most businesses in India without getting the prior approval of the Indian authorities. Regardless, you might still find several sectors where a foreign investor can’t directly invest or must first get the approval of the Indian authorities.
Convincing the authorities about the viability and effectiveness of a project might end up being a challenge for foreign investors. Prior approval of the Indian government can be required in cases where a foreign exchange trader plans to begin a brand-new venture that’s in the same field as a present joint venture. The Indian authorities will grant consent only if both the foreign exchange trader and its present Indian joint venture partner can convince the authorities that the new venture the foreign investor proposes to start will not undermine the interests of the present Indian joint venture partner alongside other stakeholders of the existing venture.
Real Estate – Australian companies investing at real estate at India ought to be educated concerning the following limitations! The minimum capitalization requirement, when the currency is routed via a fully owned subsidiary of an overseas company, is U.S. $10 million, and U.S. $5 million, when the currency is routed via a JV established with an Indian joint venture partner. Money invested at real estate at India can’t Be repatriated to get a period of 3 years without first getting the approval of the Indian government. Investors have to adhere to certain minimum land development requirements. For example, in case of construction projects, an exchange trader has to develop a minimum construction area of 50, 000 sq meters.
At least 50 percent of the job has to be developed within a period of five years from the date of getting the necessary statutory approvals. Investors are prohibited from selling undeveloped land. Labor & Employment – Negative covenants in employment contracts in the form of non compete clauses are unenforceable beyond the term of the contract. While terminating employment contracts, investors must be cautious to adhere to relevant laws like Industrial Disputes Act, Shops and Establishments Act and state specific employment orders. These laws lay down specific rules to get employment and termination. Intellectual Property – India still lags behind many developed nations in its own execution and enforcement of IP laws. Foreign investors must take adequate steps to defend their IP rights from infringement and misappropriation. Indian patent law requires the proprietor of a patent to get that the consent of that the joint owner of that the patent prior to such person or entity licenses, assigns or sells that the invention covered under that the patent. In an action by which an owner of a patent seeks to enjoin a 3rd party from infring that the patent involving a life saving drug, Indian courts have frequently balanced the public good involved with making that the drug freely available to that the public with which of the rights of the patent holder