Transfer pricing for an Indian subsidiary – Doing business in India [Whiteboard Friday]

If you have an Indian subsidiary, either as a cost centre or a profit centre, any international transactions done with the parent entity or any other of your own company, qualifies for transfer pricing. Transfer pricing is essentially a markup that is arrived after detailed study of multiple factors and business conditions. This markup leads to the Indian subsidiary being profitable.

The current episode of eLagaan Whiteboard Friday explain in detail the concept of Transfer pricing, what are the ways you can arrive at calculating this and how do you go about the same in your setup (cost vs a profit centre).

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For queries: hello@eLagaan.com

#startup #doingbusinessinIndia #eLagaan #nextbigwhat #makeinindia

Compliances for an Indian subsidiary – Doing business in India [Whiteboard Friday]

If you have an Indian subsidiary, either as a cost centre or a profit centre, you need to keep it compliant under various applicable laws. These law vary from Company to FEMA to Taxation to Labour to Regulatory etc. 

The current episode of eLagaan Whiteboard Friday looks at applicable laws for both cost centre or a profit centre and what you should be aware of to keep your startup compliant. 

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For queries: hello@eLagaan.com

#startup #doingbusinessinIndia #eLagaan #nextbigwhat #makeinindia

Setting up an Indian subsidiary – Doing business in India [Whiteboard Friday]

If you are looking to do business in India, you can set up a company in multiple ways like Private Limited company or an LLP depending on what your objectives are – Cost centre Vs Profit Centre. 

The current episode of eLagaan Whiteboard Friday looks at option available to get started in India along with various tax implications that you should be aware of.

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For queries: hello@eLagaan.com

#startup #doingbusinessinIndia #eLagaan #nextbigwhat

Maruti Suzuki asks spare-part makers to produce key auto parts locally

Maruti Suzuki India’s MD Kenichi Ayukawa has urged the local parts manufacturers to start making electric components and other key auto parts in India.

He stated that developing R&D centers in India will not only bring the vehicle costs down but will also help other car manufacturers as well.

He emphasized his focus on Make-in-India and said that though setting up in-house R&D is a long process, however, it’s the local component makers who will benefit the most in the long run.

‘A country with no jobs’ for young engineering graduates of India

‘Make In India‘ was launched on 15th August 2014 to usher India in a manufacturing boom, intending to displace China as the ‘go to nation’ to manufacture and procure everything (literally). The aim of the current government was to create 100 million jobs by 2022.

Enticed by the prospects, everyone wanted to be an engineer (though the disease has long been an epidemic in Indian minds).

People take heavy educational loans to study in engineering institutions which churn out students in assembly line fashion. At the end these students have no skill sets, which is desired by the industry.

Some put the figures of un-employability of Indian engineers coming out of myriad engineering colleges at mind boggling 80%, due to lack of relevant skills. One of the major skills lacking is effective English communication.

The fact of matter in fact is that a household survey done in February this year has found 31.2 million people actively looking for a job!

The seriousness of the matter doubles up as more than half of India’s population is under 25 years of age now.

Govt. To Monitor States And Rank Them Based On ‘Make In India’ Results, Creates A Dashboard

The Indian government has finally taken stern steps to keep a check and track their ambitious ‘Make In India’ campaign.

Under its plan, the Indian Government has decided to closely monitor the commitments made under ‘Make in India’ program and State level Business Reform Plan, and accordingly rank all the states of India based on the performance.

Two dashboards have been created, which would be accessible by one and all; where all the details of state performance, score, and other reform areas can be accessed. These dashboards will track 21 ministries, covering 22 sectors and will be constantly updated by the concerned Ministries and bureaucrats.

makeinindiadashboard1

 

“The Make in India Dashboard will allow Ministries covered under the Action Plan to update progress made by them on short-term and medium-term targets, facilitate timely delivery of identified action points, and facilitate monitoring and identification of delays in implementation, if any,” DIPP said in their statement.

Currently, the Business Reform Action Plan dashboard does not have any data. It will be updated after the data is verified and legitimate.The dashboard also has access to other reform areas such as:
1) Access To Information And Transparency Enablers
2) Online Tax Return Filing
3) Labor Regulation Enablers, etc.

makeinindiadashboard2

The Make In India online monitoring system is developed by Department of industrial Policy and Promotion. Once, logged in the state ranking based on the results of Make In India program could be viewed.

For once the Government of India has decided to be accountable and ensure that the promises are delivered as per the promises made before elections.

Get This: US Ready To Manufacture F-16s In India!

Undoubtedly one of the largest projects under the ‘Make in India’ initiative, US fighter jet maker Lockheed Martin is ready to manufacture F-16 jets in India. Though no time-frame was committed to have the plant operational, US supports the ongoing talks between the two countries to set up the facility.

Eat This : “Make In India” Logo Was Not Designed By An Indian Firm

Disclosed under RTI, the logo of the much-hyped Make in India initiative was designed by Weiden+Kennedy India Limited (which is headquartered at Portland).

Make In India : Was It Made In India?
Make In India : Was It Made In India?

Founded in Portland, Oregon, it is one of the largest independently owned advertising agencies and was hired by Govt of India for Rs 11 crore for advertising and promotion of the campaign.

Why is this news?

Make in India has largely been about products and manufacturing companies (and not service companies). If the government doesn’t trust Indian / local services companies (which have been around for donkey years), why expect change of heart for product business then?

Micromax To Invest Rs 300 Crore And Set Up New Manufacturing Units In India #MakeInIndia

Micromax plans to set up up three new manufacturing units in India, for which the company will invest Rs 300 crore. The plants will be set up in Rajasthan, Telangana and Andhra Pradesh and is expected to start operations by next year.

MakeInIndia
MakeInIndia

The company aims to reduce the imports from China by increasing the production in the country.

Micromax co-founder Rajesh Agarwal, said, “We have been allotted 20 acres land in Telangana and the civil structure is almost ready. Similarly, in Rajasthan, we have got 25 acres land and construction will start in a few days. Tirupati will also start soon.”

The company will invest Rs 100 crore in each plant. The company currently has an assembly unit in Rudrapur, Uttarakhand. With the new plants, the company will have a capacity of about 4 million units.

[source]

To Boost Make In India Initiative, Government Asks IITs To Focus On Core Engg Recruiters

To boost the Make In India initiative, ministry of human resource development (MHRD) has asked the IITs to give a preferred slot to core engineering companies. After several informal requests, IIT-Bombay has obliged and given the core companies 11 slots out of 30 starting from day 1. IIT Madras has also moved up the companies by several days in the schedule.MakeInIndia transportation

IIT-Kharagpur and Delhi have not given any preferred choices to these companies.

The core companies offer only an average salary of Rs 30 lakh while consulting, finance, technology and ecommerce companies have offered salaries upto Rs 1 crore last year.

110 core engineering colleges will visit IIT-Bombay as the institute aims to provide a balance by offering equal opportunities to firms from consulting, finance, banking, technology and core engineering and not just for the Make In India initiative. [source]

Twitter Launches Emoji For Make In India Campaign

Make in India initiative which was launched last year to accelerate foreign direct investment, now has its own Twitter emoji. It is the first non US brand which got a Twitter emoji to promote the campaign.

While tweeting with the hashtag #MakeInIndia, one will see an emoji of a black lion against an orange background. It will appear next to the hashtag in the tweet.

According to Twitter’s blogpost, the campaign has seen nearly 500 million impressions this year and received a large number of positive tweets from US, Japan and UK.

OnePlus Will Manufacture Its Smartphones In India

OnePlus has announced its plans for local production of its smartphones in India through contract manufacturing at ‘Foxconn’s Rising Stars factory’ within the Sri City Integrated Business City in the state of Andhra Pradesh by end of 2015.

Pete Lau, Founder & CEO, OnePlus said, “India being one of our biggest markets worldwide, we are committed to a long term sustainable growth path. This move will strengthen our presence and help us step up momentum in India.”

Local production of OnePlus’ upcoming devices will start at the 30,000 sq. ft. facility which will have a cumulative peak capacity of producing up to 500,000 units per month.

The facility will also generate direct employment of over 1000 full time workers.

Gionee Ropes In Dixon and Foxconn For Manufacturing in India

Gionee will be investing $50 million in the next three years on manufacturing in India. Gionee’s Make In India will happen at the facilities of Dixon Technologies and Foxconn which are based at Delhi-NCR and Andhra Pradesh respectively. Foxconn will start this association by manufacturing F Series and P Series phones from the existing Gionee Portfolio while Dixon will be making feature phones and other smartphones for Gionee in India.

Both the EMS partners will start the production in the month of October and they have a capacity of more than 1.2 Million handset per month between them.

Gionee will also increase the investment in R&D team in India which will work on the software to give better consumer experience. This team will work on the Gionee UI, Amigo to make it much more customised for Indian Consumers.

You Make In India : You Will Be Able To Sell (Online) In India Too

Foreign and domestic companies with manufacturing units will most likely be able to sell their products via online portals to the consumers directly. The Union cabinet is contemplating on the decision and will announce it tomorrow.

The move will boost the manufacturing sector as it’ll give the customers an easier access to the products sold by companies with manufacturing units. The manufacturing companies with an FDI of up to 100% will also be permissible to sell their products online.

Finance minister Arun Jaitley said that the companies with manufacturing units will be permitted to sell directly to the customers. From the FDI’s angle, the government is trying to make it much more hassle free.

Currently, selling of goods by companies with manufacturing units was allowed in B2B and not in B2C. Now, the Department of Industrial Policy and Promotion has proposed a new principle in accordance with the Income Tax Act that will allow multiple brands to sell directly to their customers. The move will have an impact on the contribution of manufacturing in GDP and is likely to go up from 16% to 25% in the span of the next ten years and increase the number of jobs as well (via).

All this comes from the ‘make in India’ campaign whose underlying motive is to improve the ease of doing business in the country.