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LABOUR LAWS AND LEGALENVIRONMENT IN INDIA FOR
EUROPEAN INVESTORS
09/05/2011
PARIS STAR BUSINESS SCHOOL
Muppala Sekhar reddySaha Rajkumar
Rachakonda raghavendra rao
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Introduction
This project explains about the foreign direct
investments and legal environments in India. It
also focuses on the policy of the Indiangovernment and European Union which attracts
the companies of either sides to start and run
business in Europe and India vise-versa. It also
contains the progress of Free Trade Agreement
between India and European Union and point out
the obstacles of this agreement .
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What is it about
Labour Laws and Social Security System
Legal Environments
Business Regulations
FDI Policy
India for European Investors
Free Trade Agreement between EU and India
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Labour Laws and Social Security
System
Labour Laws For the sake of the employees
interest,India has several acts which are applicable in
all sectors.Labour Laws fall under the following acts:
1. Trade Unions Act
2. Wages Regulation Act
3. Act for Payments4. Working Conditions Acts
5. Temporary,Permanent and Contract Employees
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Legal Environment in India
The legal environment in India is as follows the rules of
WTO TRIPS(trade related aspects of intellectual property
rights).
Intellectual property protection follow under the following
Patents
Trade Marks
Copy rights
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Business Regulation
The business regulatory environment covers all aspects of
trade, industrial activity, taxes, foreign exchange, intellectual
property and social security.Business regulation broadly applies to the following aspects:
Foreign exchange regulations
Industrial licensing regulations
Trade regulationsImport restrictions
Export restriction
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FDI Policy
Why invest in India
Impressive growth rate: 8 % p.a.
Competitive manufacturing hubs Emerging knowledge industries
IT, Pharma, Biotech, R&D
Improving infrastructure an area of opportunity
Good Banking & Financial Infrastructure.
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FDI Policy
Progressive Trade and investment policy
Strong democratic set up
Independent judiciary
Technical education and infrastructure
Good law & order
English widely understood
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FDI Policy
Investing in India
Automatic Route Prior Permission
General ruleInform RBI within 30 days of
inflow/issue of shares Pricing: FEMA Regulations
Unlisted ± CCIListed ± SEBI
Cap of Rs. 1200 Crore(Approx : USD $268 million)
By exception
Approval of ForeignInvestment Promotion
Board needed.Decision generally within4-6 weeks
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FDI Policy
Liaison OfficePromotion of business interest; spreadingawareness of companys products; exploreopportunities; work as channel of communicationetc.
Cannot carry on any commercial, trading orindustrial activity or earn any income in India Is
required to maintain itself out of inwardremittances received from abroad through normalbanking channels.
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FDI Policy
Branch officeRepresent the business interest of foreign company
For the purpose of execution of the Project
Permissible activities for a Branch OfficeExport/Import of goodsProfessional or Consultancy ServicesCarrying out research work in which the parentcompany is engaged
Promoting technical or financial collaborationsbetween Indian Companies and parent or overseas groupcompanies
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FDI PolicyForeign investment is not permitted in the following areas:
Atomic energy
Agriculture
Postal services
Plantation
Retail trading (except single brand)
Mining services
Real estate business
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FDI PolicyExit issues
Transfer of shares from non-resident to non-residentdoes not require RBI approval for pricing
Transfer of shares from non-resident to resident doesnot require any FIPB Approval, though RBI approval isrequired for pricing
Pricing as per FEMA listed and unlisted securities
RBI permission not required if sale through StockExchange
�Mauritius Route: Capital Gain Advantage
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European Investors in India
India is the 9th largest import partner of EU and 8th
largest partner of export and trade partner.
EU is the largest trade partner of India with 20% of
its trade with world.
Europe exported 26 billions euro of goods andservices in 2009. and imports were 25 billions euro.
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0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
Amount (in USD)
Amount (in USD)
Top European Investors in India
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EU and India Free Trade Agreement
Why is it necessary?
�Increase in bilateral trade
�Enhance the Investment
�Eliminate the tariffs
�Provide opportunities for potential exporters
�Promote sustainable development
�Bringing people together
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EU and India Free Trade Agreement
Facts & Figures :
�EU-India Summit launched a High Level
Trade Group (HLTG) in 2005�Start Negotiation in 2007
�Biggest Indian Partner(20% shares)
�Big Indian Investor(10.9 bn )�FDI Flows to India ( About 65% of all)
�FDI Flows to EU (9.5 bn )
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EU and India Free Trade Agreement
Main Obstacles in FTA between EU and India :
�Intellectual Property Rights
�DATA Exclusivity in Pharamaceutical Sector
�Domestic Political Hassles
�Unbridgeable Expectation Gap
�Challenges in area of comparative advantages
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Conclusion
Efforts should be made by both side:
�Better bilateral & strategic relation with EU &
India
�Should remove obstacles as soon as possible�Allow strategic partnership in infrastructurefrom both sides
�Liberalize more Financial policy�Review FDI Policy towards Agricultural &
Industrial sector
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Conclusion
�Need to conduct internal consultations
�Negotiations should be based on trade & financial
matter
�More focus on sustainable development
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Thank you