China-India Business Update: Apr. 27

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Apr. 27 – Welcome to our biweekly China-India round up in which we examine the latest bilateral news and commentary affecting foreign investment in the two countries.

India’s 12th Five Year Plan to Focus on ‘Inclusive Growth’
As India’s government prepares to submit its approach paper for its 12th five-year plan (a plan which covers years 2012 to 2017), the Planning Commission’s focus on instilling “inclusive growth” is making headway. The plan is expected to be one that encourages the development of India’s agriculture, education, health and social welfare through government spending. It is also expected to create employment through developing India’s manufacturing sector and move the nation higher up the value chain. Prime Minister Manmohan Singh, however, warned that maintaining fiscal discipline is important as well.

Newer, Faster Approval Procedure for Businesses in India Underway
India will soon have a system in place that will simplify the process of approval for business projects, according to a government official. It will not only encourage investors to invest in India but also young entrepreneurs to start up their own businesses. Currently, each and every business needs to go through a cumbersome series of approvals before it actually becomes a functioning firm.

How Corruption Hurts Investors in China and India
While both China and India are drawing global investors’ attention with their impressive economic performance, prevalent bureaucratic and political corruption has stood out as a negative factor that unfairly affects foreign enterprises and will potentially stifle economic development in the long term.

Doha Round ‘Doomed’ as WTO Talks on Brink of Failure
The 10-year-old Doha Round of the World Trade Organization (WTO) talks is faced with a “serious risk,” due to the fundamental disagreement between the United States and major emerging economies including China, India and Brazil on the tariff cut scale of manufacturing goods.

First Quarter PE Investment Soars in India
India saw private equity investments worth US$3.3 billion in the first three months of 2011 – most of which went in the infrastructure, IT and manufacturing sectors. Private equity investments in the January-March quarter were about 57 percent higher than the US$2.1 billion worth of PE investment recorded over the same period in 2010 and more than double the US$1.5 billion accrued over last three months of 2010.

India’s Free Trade Agreements
India looks at regional trading arrangements as “building blocks” towards the overall objective of trade liberalization. Therefore, it is participating in a number of RTAs which include structures such as free trade agreements, preferential trade agreements, and comprehensive economic cooperation agreements.

India Issues Tax Benefits for Garment Companies
India has emerged as the preferred destination for many foreign international enterprises due to constructive factors such as high economic growth, fast population growth, English speaking people, and lower costs for workers.

China, India Rising in World Economic Forum ICT Report
Information and communication technologies are most effectively utilized in industrialized nations, where the proliferation of Internet and mobile technology helps economies grow, but developing nations such as India and China are catching up sooner than expected, according to a report published by the World Economic Forum on Tuesday.

Cameron: Next IMF Director ‘Should be from China, India, or SE Asia’
In an interview on BBC Radio 4’s Today program on Tuesday morning, British Prime Minister David Cameron openly opposed his predecessor Gordon Brown’s campaign to be the next managing director of the International Monetary Fund, instead supporting a candidate from the emerging markets of “India, China, or Southeast Asia.”

BRICS Seek More International Influence in Emerging Countries
Members of the BRICS (Brazil, Russia, India, China and South Africa) group of developing economies joined the Third BRICS Summit today on China’s Hainan Island, discussing economic, financial and political cooperation issues among emerging markets and calling for a greater say in global affairs. This is also the first time South Africa joined the group at the summit.

India Contests Universal Ban on Endosulfan
India has earned support in the United Nations from countries such as Japan, South Korea, Bolivia, Oman and China in its efforts to cast aside a recommendation by the UN Environment Program to ban endosulfan, a chemical widely used around the world as an insecticide.

Dezan Shira & Associates provide foreign direct investment advice and services to clients in both China and India. The firm provides due diligence, incorporation, tax, accounting and other business services from ten China offices and five in India. Please contact the practice at or as appropriate, visit the firm’s web site here, or download the firm’s brochure here.

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