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Article Published in the Express Magazine Dated
May 18, 2003
General Attorney : Rajiv K. Luthra
We are the manufacturers of certain glazed
tiles in India. On account of cheap imports from
China and certain other countries in the Middle
East, our industry has been very badly hit and we
are unable to match their prices and supply. Do we
have any remedy under the existing laws in India
to check the flow of such cheap imports?
R. Pillai, Chennai
Your industry seems to have been affected by
dumping of goods from abroad, by virtue of the
imported products being sold at a price cheaper
than their home market price. The Customs Tariff
Act, 1975 (“CTA”) has provided the machinery for
initiating trade remedy measures against products
that are sold at unfair prices in the form of
antidumping duties, which can be imposed after the
Directorate General of Antidumping and Allied
Duties conducts antidumping investigations.
However, to initiate such an investigation your
industry should have sufficient standing to
represent the domestic industry. Furthermore, it
should be shown that the dumped imports are
causing or are threatening to cause material
injury to the domestic industry and a causal link
between dumping injury and dumping would also need
to be established. The investigation will look
into the volume of dumped imports and the effects
of such imports on domestic prices for the
purposes of assessing injury. The injurious
effects of dumping are sought to be redressed
through the imposition of an antidumping duty or
through appropriate price undertaking.
The duration of the investigation can go up to 18
months, but the investigation could also be
terminated earlier, if there is no sufficient
evidence of dumping and injury. It may, however,
be noted that the mere fact that imports are
cheaper than comparable Indian product is no
ground for antidumping action.
I am a non-resident Indian, living in Australia
and am interested in setting up a call center
business in India. Please advise how I must go
about the same.
Sundresan
Business considerations, repatriation of capital
and income, corporate tax rates, governmental
regulations and legal issues are some of the
factors that need to be considered by any foreign
entity proposing to venture in India.
A foreign company may establish its presence in
India either by setting up a liaison office;
branch office; a wholly owned subsidiary company
or a joint venture company in India.
The Australian company may set up a call center
business in India, by setting up a branch office
in the country. In terms of the Foreign Exchange
Management (Establishment in India of Branch or
Office or other place of Business) Regulations,
2000, amongst other activities, a branch office in
India is permitted to render services in
information technology and development of software
in India.
The preferred alternative to the Australian
company would be to set up either a wholly owned
subsidiary or a joint venture company by
incorporating a company under the provisions of
Indian Companies Act, 1956. Foreign investment may
be made in an Indian company, either through the
automatic route or subject to the approval from
the Foreign Investment Promotion Board/the Reserve
Bank of India (“FIPB/RBI”). As per the present
guidelines of the Government of India, foreign
investment upto 100% is permitted under the
automatic route for investing in the call center
business.
A license from the Department of Telecommunication
(“DoT”) would be required to set up a call center
in India. Besides, DoT guidelines and provisions
of the Exim Policy need to be complied with.
The call center business is entitled to certain
benefits under the Software Technology Park of
India [STP] Scheme. STP units are exempted from
payment of corporate income tax until the
financial year 2009-10, subject to compliance with
the provisions of Section 10-A of the Income Tax
Act, 1961. Other benefits include complete duty
free imports of hardware & software in the STP
units; free repatriation of capital invested by
foreign entrepreneurs, know-how fees, royalty,
dividend etc., after payment of income tax due (if
any) on them and entitlement to depreciation on
capital goods above 90% over a period of five
years.
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