Category — Economy

India Extends Benefits to Startups

The Government of India has broadened the definition of a startup by saying that a business not older than seven years will qualify for benefits such as reduction in patent application fee and a tax holiday, under the startup India program. In the case of startups in the biotechnology sector, the period shall be up to 10 years, the Ministry of Commerce and Industry said in a notification. “An entity shall cease to be a startup on completion of seven years from the date of its incorporation/registration, or if its turnover for any previous year exceeds $3.5 million.”

In order for a startup to avail of tax benefits it should be “working towards innovation, development or improvement of products or processes or services, or should be following a scalable business model with a high potential of employment generation or wealth creation.” Any entity formed by splitting up or by the reconstruction of a business already in existence will not be considered a startup, reports VCCircle.

Planning in a startup

“The changes are an effort to ensure ease of starting up new businesses to promote the startup ecosystem and build a nation of job creators instead of job seekers,” the government said.

The process of recognition as a startup will be through an online application made over the mobile app/portal set up by the Department of Industrial Policy and Promotion. Startups will no longer require a letter of recommendation from an incubator or an industry association for either recognition or tax benefits.

May 26, 2017   No Comments

Swedes Consider Business Climate in India as Favorable

The embassy of Sweden in India and the Swedish Chamber of Commerce released the 9th edition of their Business Climate Survey report for India, wherein 65 percent (a massive jump from the only 15 percent in 2013) of Swedish multinationals put India as a favorable destination to do business. This survey reflects the views of some of the biggest Swedish companies such as  Ericsson, IKEA, Volvo,  Scania, and Electrolux .•

NDTV reports that among the 160 of the 170 companies in India that took part in the survey, 64 percent of them claimed to be satisfied to be doing business in India; 80 per cent of the companies claimed they would be going ahead with their India investment plan as usual. “There are some challenges as well like the bureaucracy. Companies find it difficult to get licenses easily,” Anne Linde, Minister for EU Affairs and Trade, told the publication.

Part of a questionnaire for surveying the business climate in India

The Economic Times says that the key findings in the Business Climate Survey 2016/17 include:

  • The direct and indirect jobs created across the country by Swedish companies in India shows an increase of 20% since 2014
  • Goods and Services Tax matters: 3 out of 4 companies say the reform contributed positively to the business climate in India
  • 45 Swedish companies are a part of “Make in India”
  • 8 out of 10 companies invested as per plans or more last year
  • 8 out of 10 say they will increase their investments in the coming years
  • 7 out of 10 companies are involved in skills development, either through business operations or community development programs

 

May 25, 2017   No Comments

U.S.’s Ebix Acquires Majority Stake in India’s ItzCash

Atlanta, GA-based Ebix Inc., a maker of software for the insurance and financial services industry, acquired a majority stake in Indian payments services firm ItzCash for approximately $124 million. ItzCash’s earlier investors, Matrix Partners, Intel Capital and Lightspeed Venture Partners, exited the company for returns between 3X – 5X, leaving Essel Group with a 20% stake.

Founded in 2006, ItzCash, started with digital payments, and expanded into remittances, financial services, corporate solutions, point of sale (PoS) terminals and payment gateway. The company processes 600,000 transactions per day. In 2016-17, it processed payments worth $1.6 billion through its network, reports the Livemint.

ItzCash Logo

“With the youngest tech-savvy society, the largest middle class, a 1.3 billion population, a country committed to going digital and a growth rate of 7% plus, India is an emerging economic superpower today. We are big believers in the power of exchanges and thus have been keen to take an early position in India in terms of powering financial and insurance exchanges,” said Robin Raina, chairman and chief executive of Ebix.

May 25, 2017   No Comments

India Abolishes Foreign Investment Advisory Body

India’s Federal Government approved dismantling the 25-year old Foreign Investment Promotion Board,  in order to streamline  the flow of foreign capital into the country.
By abolishing the Foreign Investment Promotion Board India’s minister for finance, Arun Jaitley, removed a layer of decision-making for foreign direct investment approvals in 11 sectors that needed prior government approval. FDI proposals can now be cleared by the ministries and departments concerned in these sectors. In sectors where the government has security concerns, the proposals will additionally be vetted by the Home Ministry.
According to the strategic partnership policy, the four sub-sectors now open to the private sector will create a pool of six Indian firms that will be accorded special status. They will seek to make submarines for the Navy, a single-engine fighter for the air force, and helicopters and armored vehicles for the army. Once the pool is created, the companies will be given the opportunity to bid for defense production orders, expected to be worth over $20 billion. reports the Economic Times.

The Department of Industrial Policy and Promotion will notify the standard operating procedure for processing applications in the next 60 days.

 Return on Investment

May 24, 2017   No Comments

India’s Motherson Sumi Expands Internationally

Noida, India-based auto component maker Motherson Sumi Systems consolidated net profit stood at $108.81 million in the quarter ending March 31, 2017, a better-than-expected 20 percent growth. Motherson Sumi’s net sales outside India rose over 14 percent to 94.76 billion rupees (GB Please convert to USD)

CFO of Motherson Sumi Systems, G. N. Gauba told Press Trust of India, “We have earmarked $300 million capex for the current fiscal. The investment will mainly go into the upcoming nine manufacturing plants across the world.”  The company will set up three plants in India, three in Hungary, one each at South Korea, Mexico and the United States, he added.
Auto parts from Motherson Sumi Systems
Currently, the company operates over 180 facilities across the globe catering to various automobile OEMs including Mercedes- Benz, Audi, Toyota, Ford and Suzuki, reports the Economic Times. It has set a target of achieving a turnover of  $18 billion by 2020 through global expansion.

May 22, 2017   No Comments