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Is “Gift Gujarat” Going To Be India’s New Best Friend?

To grease the wheels in the global economic marathon, strategies such as GIFT Gujarat has been brought into existence. It is said to be developing into a platform to showcase India’s competitiveness at a global altitude transforming it into a financial zone. GIFT City is the first IFSC (International Financial Services Centre) of its kind in India. What is GIFT Gujarat? `GIFT (Gujarat International Finance Tec-City) is a government plan aiming to provide a high-quality infrastructure to attain a fin-tec developed region, for which it has acquired a land of 359 hectares. This particular land is situated between Ahmedabad and Gandhinagar located in Gujarat. The government of Gujarat is working towards the hitch with an estimated cost of 1300 billion INR for the entire project. The area under construction includes plans of incorporating world-class infrastructure like telecoms, broadband, roads, buildings, district cooling etc. The Government of Gujarat has partnered with Infrastructure Leasing (IL) and Financial Services (FS) as a 50-50 joint venture with Ajay Pandey as the MD and CEO, to develop the central business district as a India’s first Global Financial Hub, giving effect to the financial and technological firms to relocate their operations in Gujarat. “GIFT GUJARAT” A MASTER PLAN: The plan was laid out by our Prime minister Narendra Modi, to build best infrastructures to attract FDI inflows and motivate people to set up offices. The proposed plan is said to boost the economy with employment opportunities on a large scale aiming to generate one million jobs by 2025 in the financial as well as technology sectors. An IFSC is favoured with certain tax benefits and an institution for rapid resolution of disputes. The City is in line and deals with the Reserve Bank of India, Insurance Regulatory and Development Authority (IRDA), Securities Exchange Board Of India (SEBI) and a few other financial institutions. SEBI is envisaged to strengthen commodity derivatives tradings limited to non-agricultural commodities and predominantly entice additional foreign portfolio investments. SEBI has stated to settle cash in foreign currency only on determined price on the overseas exchanges.Currency, commodities and equity segments conforming with the SEBI rules are anticipated to get listed on the new exchanges paving way for the introduction of new products. Is It a Real Gift? Gift City Gujarat progress : An IFSC is favoured with certain tax benefits where infrastructure is said to be deficient or exorbitant. GIFT has been successful in creating more than 8,000 jobs and is anticipated to leap +50% yearly aiming at one million jobs including 500,000 direct employment. Bank of Baroda with more than 1500 employees is the largest employer in this business region. It is expected to make use of 62 million square feet of space for its operational purposes. The smart city is intended to be a centre for setting prices on trading instruments like currencies, commodities etc globally. There are about 11 important domestic banks like HDFC, SBI, KOTAK MAHINDRA etc that have already started operations in this region. Their financial transactions have estimated to crossed 8 billion dollars. The GFCI report lists top 15 centers which are predicted to be remarkable in the upcoming years. GIFT has positioned in the tenth place in the latest edition of Emerging Global Financial Centres (GFCI). The business area is planned to be composed of special economic zone (SEZ), grand hotels, integrated townships, sophisticated educational zone, technology parks, stock exchanges and other advanced institutions. Two 29-floor commercial towers are already constructed leading the way for further upgrowth. There are about 100 capital market players and eight insurance companies who have commenced their base in GIFT. On the grounds of reduced taxes for SEZ’s, overseas currency loans are easily accessible to the abroad Indian companies and other foreign entities. The IRDAI has issued regulations permitting to set up offices in IFSC GIFT for Indian as well as offshore insurers which were restricted earlier, with a bonus of exemption from GST for export of services. The trading will be done for 16 hours and is made adjustable depending on the market demand, covering Singapore market and closing with London. DRAWBACKS OF GIFT: After the implementations are being made, education has not been streamlined and is getting expensive especially for engineering and medical fields. The land is just 12 kms away from Ahmedabad airport, which imposes a few restrictions on the height of the buildings and structures around this area to keep the flight’s path clear. There has also been deliberation on structuring and renewing design of development to fill in the gap of new requirements and the plans. Short-term capital gains taxes on transactions are to be removed to compete with international exchanges operating in IFSCs like Singapore and Dubai. This is because firms without a physical setup in the city making investments in securities, have to pay capital gain taxes. Although there were several discussions on starting an IFSC in Mumbai, currently it is a formidable thought for India. China is the only nation with two international finance centres which were developed with a span of eight years. In a short duration of two years, it has caught the eye of the investors and set to unwind the potential of the country. If the plan is executed in an effective manner and is uninterrupted, it could be cast as a base for syndication of loans for foreign currency and other global activities.
Is “Gift Gujarat” Going To Be India’s New Best Friend?
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Is “Gift Gujarat” Going To Be India’s New Best Friend? 383 Is “Gift Gujarat” Going To Be India’s New Best Friend? Blog
Kranthi Tilak Reddy Jan 24, 2018
To grease the wheels in the global economic marathon, strategies such as GIFT Gujarat has been brought into existence. It is said to be developing into a platform to showcase India’s competitiveness at a global altitude transforming it into a f...
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Overseas Direct Investments

Introduction: Overseas market gives opportunities to Indian entities to expand and diversify their business abroad by making full utilization of the capacity through an “overseas direct investment” . To put it in simple words, it is an investment done outside India. In recent times, India is making a positive approach towards this pre-eminent step that has seized the global marketplace. Meaning of Overseas Direct Investment: When an organisation invests money abroad by starting a business or either capitalising them, it is known as “Overseas Direct Investments”. This business strategy creates branding for an entity as well as helps the Indian entrepreneurs to get global exposure. Overseas Direct Investments can include making investments in Joint Ventures or a Wholly Owned Subsidiary abroad, purchase of shares or private placement in foreign entities etc, but portfolio investments are not included here. Eg: The third largest software service company in India, Wipro will be acquiring US-based cloud services firm Appirio by spending US$ 500 million. Governing body: The Reserve Bank of India is the governing body of the Overseas Direct Investment activities. They draw up the guidelines and look if such investments are in compliance with them. Through the Master Circulars from RBI along with FEMA Act.co the cross-border transactions are regulated and are amended from time to time. http://www.rbi.org.in/scripts/Fema.aspx.   The two different ways an Indian party can involve in ODI  are Automatic route and Approval route: Automatic route: If the Indian parties are exposed to Automatic route while involving in overseas direct investments, they  do not necessarily require any prior approval from the Reserve Bank of India. An Indian party making overseas direct investments whether in a joint venture (JV) or a wholly owned subsidiary (WOS)  needs to approach an Authorised Dealer Category-1 bank with application Form ODI and with other documents for remittances in terms of A.P. (DIR Series) Circular No.62 dated April 13, 2016. After a particular Unique Identification Number is provided instantaneously, subsequent investments can be made in the same JV and WOS. Approval route: Under the Approval route, if the Indian party proposal does not cover the conditions under the “automatic route”, then it requires a prior approval from the Reserve Bank of India. This requires an Authorized Dealer Category-1 bank to submit a specific application in Form ODI along with other prescribed documents. Currency restrictions: To make investments in Pakistan, it is permissible only under the approval route. Any investments in Bhutan are permitted to be made in Indian rupees and in convertible currencies, but in Nepal, it can be done only in Indian Rupees. Advantages of ODI: This development has inclined benefits towards drawing better technological know-how to Indian companies. It provides a platform to expand business opportunities across the globe. This facility allows the Indian companies to get direct access to more demanding and extensive markets. Domestic companies can achieve a widespread customer base in the global arena. Recent developments in ODI: Considering the above advantages, the Indian government is rigorously making efforts to combine the domestic economy with the global economy. In accordance with the RBI reports, Indian overseas direct investments in equity, loan and guaranteed issue in the month of Aug 2017 rose up to US$ 1.33 billion as against US$ 1.76 billion in July 2017.  Lately, the UK reported that India stood at the third place as a source of foreign investments for them.   From April 1, 2017, to June 30, 2017, the highest Overseas Direct Investments by India was made in the United States of America, Singapore and Mauritius with 1,341 USD millions (34%), 657 USD millions (17%) and 554 USD millions (14%) respectively. Also, refer RBI master circulars for more information: https://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8100 For other information get in touch with www.savedesk.co
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Overseas Direct Investments

Overseas Direct Investments

Kranthi Tilak Reddy
Introduction: Overseas market gives opportunities to Indian entities to expand and diversify their business abroad by making full utilization of the capacity through an “overseas direct inves...
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Foreign Trade Policy to Boost Exports

The Commerce Ministry is looking forward at the measures to be announced as a segment of review of Foreign Trade Policy to boost exports, said  Commerce Secretary Rita Teaotia.The review of the policy is almost at its logical closure and the exercise will be finalised by September, she said.The Trade Promotion Council of India (TPCI) along with the Commerce Ministry  is organising this show. Although most of the Indian exporters are persistently participating in international events, arrangement of such big events would provide a substantial platform to most domestic players to reach out to global buyers. "We are looking to see what are those measures by which we can actively support the exporting community," she said here.She also mentioned about the curtain raiser event “Indus Food” which is a mega international food and beverage trade show, to be held at Greater Noida in the coming January. The show is set to start off by the 18th of January next year expecting as good as 400 participants from 35 countries to take part in the two-day show."The show will give an opportunity to Indian exporters to showcase their wide range of products in the food sector," she added.Food and Beverages business draws USD 33 billion per year globally. This show is initiated to make a marketplace for domestic products to showcase to global markets. When questioned about the rising non-trade barriers in the sector, she replied that this is reality in the global market place today but the government is aiding exporters to tackle with such complications.As we know, India is the chief producer of rice, sesame, wheat, milk, mango, banana and other marine products. There are also plans of organising a three-day World Food India 2017 in November by the Food processing ministry. Mohit Singla, Chairman, TPCI, stating on the occasion said- “In spite of such a huge potential, India lacked a platform of its own, which highlights the food production capacities of the country.”"We are organising this show on the lines of globally established food trade shows like SIAL, Anuga and Gulfood. We are sure that Indus food will immensely help the buyers to establish the required network and expand their businesses internationally," he exclaimed.
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Foreign Trade Policy to Boost Exports

Foreign Trade Policy to Boost Exports

Piuesh Daga
The Commerce Ministry is looking forward at the measures to be announced as a segment of review of Foreign Trade Policy to boost exports, said  Commerce Secretary Rita Teaotia.The review of the polic...
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Process Involved In Filing Foreign Direct Investment

As the name indicates, Foreign Direct Investment stands for money transferred to India from foreign investors to have share holding in an Indian entity. Technically, ‘FDI’ means investing in the Capital of an Indian Company by non-resident entity/person outside India under schedule 1 of FEMA. Process required to allocate shares to foreign company is known as FDI reporting. Upon receipt of funds, before crediting funds into account, AD  (Authorized Dealers) bank will request for Share Capital Declaration Form by the letterhead of company. Step 1: - Obtain KYC of remitter, which will include following detailsFor Individual: -Passport No/SSN:Permanent Address detail updated with remitting bank Period of banking relationship Account no of remitterFor Companies/Non Individual: -Registered Name Registration No Registered Address Account NumberPeriod of relationshipKYC documents collected will be valid for a period of 1 year. Post which even if remittance is  initiated from same remitter, KYC needs to be re-done.Step 2: - Upon successful validation of KYC, AD will collect Share Capital Declaration Form (prescribed as per FEMA) before crediting funds into INR account.Step 3: - Initial Reporting /Submission of Intimation FormTimeline: - 30 Days from the date of credit of fundsDocuments to be submitted: -FDI Intimation Form Covering Letter Original FIRCStep 4: - Allotment of Shares Time Line:-180 Days from the date of credit of funds Indian Company will convene Board Meeting to allot shares to foreign equity investor.Step 5:- Submission of FC-GPR FormTimeline: 30 Days from the date of allotment of shareFollowing documents need to be submitted to bank (Authorized Dealer)Covering Letter Form FCGPR Original FIRC Certificate from Company Secretary Certificate from CA or Statutory Auditors indicating calculation of arrival of Share PriceKYC of foreign RemitterMOABoard Resolution approving FDI in India Copy of Letter of Intimation forwarded to RBIStep 6:- Submission MGT-14, Form GNL-2, & return of allotment in form PAS-3 to ROC.Any additional money received in India has to be repatriated to the remitter and it needs to be updated in FIRC as well.  In case, resident company doesn’t comply with the above rule of Filing FCGPR, RBI imposes a hefty penalty on non-compliance of regulations, commonly referred to as “compounding”.SaveDesk helps you to file all your all capital account transactions with RBI. In case you seek any help do reach out to us on www.savedesk.co.
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Process Involved In Filing Foreign Direct Investment

Process Involved In Filing Foreign Direct Investment

Saurabh Jain
As the name indicates, Foreign Direct Investment stands for money transferred to India from foreign investors to have share holding in an Indian entity. Technically, ‘FDI’ means investing in the C...
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Savedesk for Supplier's Credit

What is Supplier’s Credit?Supplier’s credit is a trade credit facility for imports  into India, where a Buyer ( importer) is able to avail credit either from the Seller or from a financial institution preferably from Seller’s country. This is only made available under letter of credit and not accepted for any other import payment methods.Supplier’s credit is mostly used when the seller demands payment at sight. However, Buyer needs USANCE period for the same shipment. Typically, it is used for CAPEX imports where banks would restrict clients to use only fund based limits(Term Loans) which is far expensive than Supplier’s credit. By availing Supplier’s credit, Buyer gets access to cheaper source of funds(LIBOR Based).Supplier’s Credit allows the buyers to deal with seller on sight basis term which allows them to negotiate for better discounts to acquire goods at better prices. At the same time, it’s beneficial for the seller too, as they get the payment immediately after shipment of goods (Upon acceptance by Buyer’s Bank to make the payment).Regulation on Supplier’s Credit.Supplier’s credit is directed and regulated basis  RBI Master Circular on ECB & Trade Credits & RBI Master Direction - External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers.Few important points to be noted as follows.Authorized Dealers are allowed to approve trade credits for both capital/Non capital goods upto USD 20 million per transaction. Anything beyond this specific threshold  will have to be referred to RBI for their approvalSupplier’s credit for import of Non-capital goods can be upto 1year from the date of shipment. However, the same is restricted to working capital cycle when the facility is drawn from the bank.Supplier’s credit for import of capital goods can be availed upto 5 years. However, banks may restrict the tenure to 3 years from the date of shipment. LOU/LOC are generally issued to maximum of 3 years.Rollovers are not allowed beyond permissible tenure.Process Flow:Buyer (Importer) approaches SaveDesk (Arranger) with relevant transaction details pertaining to the import i.e., before LC issuanceSaveDesk gets an offer from overseas Financial Institutions.Buyer confirms on the pricing offered and gets the LC issued through his working capital banker. LC’s are generally restricted to overseas FI’s counters .Upon Shipment, Supplier submits the documents to their bank which in turn is sent to overseas FI from whom Supplier’s credit is being availed for scrutiny of documents.This is further forwarded to buyer’s bank by overseas FI for acceptance. Upon acceptance by Buyer, Buyer’s bank sends overseas FI guaranteeing payment on due date.Overseas FI discounts the bill and makes the payment to supplier through their bank.On due date, Importer makes the payment to his bank which in turn is paid to overseas FI to settle the transaction.Requirement to avail Supplier’s creditOnly Imports under LC qualify to avail supplier’s creditLC generally are restricted to overseas FI countersNecessary changes in LC to be done relating to USANCE period basis,  the offer received from overseas FI.Suppliers Credit is generally availed from an overseas FI where the seller is present, which avoids delay in documents sent on acceptance. However, with recent developments in Banking sector, its availed from other countries too keeping in mind significant savings on interest rates offered. To get lowest quote  on Supplier’s credit,Please write to advisor@savedesk.co
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Savedesk for Supplier's Credit

Savedesk for Supplier's Credit

Saravana Bhaskar
What is Supplier’s Credit?Supplier’s credit is a trade credit facility for imports  into India, where a Buyer ( importer) is able to avail credit either from the Seller or from a financial instit...
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Intellectual Property Rights Continue To Be The Top Bilateral Issue

Rising from the tenth largest, India has stood as the ninth single country trading partner for the US since 2016. India and US are not supposed to let their economic differences obstruct the Indo-US ties that bound the growth of the bilateral strategic partnership. As per an official US report, the Intellectual Property Rights (IPR) remains to be one of prime bilateral trade issues between these two countries. This is due to the  inadequacy of measures for the improvement of IPR regime, reported “The Year in Trade 2016”  published by the US International Trade Commission (USITC). "IPR protection remained one of the top bilateral trade issues between the two countries," mentioned the annual report. India remained on the priority watch list in 2016 due to a lack of measurable improvement to its IPR regime, it noted. From there, economic growth of India has deteriorated to 6.8 percent in 2016 from almost 7.9 percent in 2015, said he annual report of USITC. India does not have many notable linkages to the global economy compared to China, but has made constant efforts for a drastic growth rate. It has hit a record of highest growth rate in the world in 2016. The service sectors and small manufacturing sectors form a vital part of its growth. In 2016, it has derived per capita income of USD 6,590. As a result, India's economy does not spur strong demand for imports," USITC said. In 2015, there was a rise in US merchandise trade from 1.8 to 1.9 percent. Added to this, US two-way merchandise trade with India went up by 2.2%, resulting in 67.7 billion in 2016. Even though there was a slight increase in US exports in 2016, the imports surpassed the exports. The trade deficit rose by 4.2 percent to USD 24.3 billion in 2016. India stood as the seventh largest services trading partner on the basis of two-way trade, although it remained to be the only top trading partner with US, despite having a services trade deficit, the report stated. While trade deficits have scaled down since 2014, there was again a slight rise in exports which caused US services to decline by 1.6 percent to USD 6.8 billion. Total US services trade with India grew to USD 46.7 billion approximately to 10.3 percent  in 2016, it said. There were many active WTO dispute settlement proceedings which involved India and US in 2016. India has sent requests regarding measures on non-immigrant temporary work visas during March. In July, US requested arbitration concerning importation of few agricultural products on the grounds that India fell short to implement measures into compliance within set frame of time.  In September, India sought for consultations with the US concerning alleged domestic -content elements in the renewable energy sector furnished by several US states. Finally the Dispute Settlement Body approved  the Appellate Body report and the panel report, altered by the Appellate Body report, concerning India’s purchase power agreements upon solar firms and domestic content requirements. India and the US have constantly imparted measures to improve bilateral trade and investments encompassing IPR protection. 
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Intellectual Property Rights Continue To Be The Top Bilateral Issue

Intellectual Property Rights Continue To Be The Top Bilateral Issue

Saurabh Jain
Rising from the tenth largest, India has stood as the ninth single country trading partner for the US since 2016. India and US are not supposed to let their economic differences obstruct the Indo-US...
Continue reading

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