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The United States became the second highest investing nation in India after the 2020. Both India and the United States have an upward going slope in terms of Foreign Direct Investment and various ongoing businesses.
Foreign Direct Investment Ratio between India and US
Common strategic plans between India and US
Few of the biggest conglomerates in the United States are renowned names in India . Indian markets are major customers for these companies and we have seen billions worth of investments pouring in.
Leading US Companies in India
India isranked at 63rd position in 2020 World Bank’s Doing Business in India rankings. The country’s ranking on the World Bank’s Doing Business Report (DBR) of 190 countries, has improved from 142nd position in 2014 to 63rd position. It has earned a place among the world’s top 10 improvers for the third year in a row.
Trade across Borders: India has simplified starting a business by incorporating electronic memorandum of association and articles of association. India currently ranks as an important nation for cross border trade and business investment by the World Bank .Cross border trading has now been simplified with the start of post-clearance audits, upgrading port infrastructures, and enhancing the electronic submission of documents.
Custom Clearances: The Central board for Excise and Customs (CBEC) has simplified Indian customs single window project to facilitate trade. This enables one step submission of custom clear documents on an online portal. Only three mandatory documents are required for customs purposes. Computerized transactions have reduced risks and created a simplified system wherein, chances of inspections have been reduced.
Infrastructure Development: There has been an increase in infrastructure development projects due to reduction in the time and cost of obtaining construction permits. Various municipal corporations in metro cities of India have developed a fast-track approval permit for building projects. Cost of obtaining construction permits has reduced from 23.2% to 5.4% of the economies per capita. These provisions were enabled to ease the process of doing business in India and reaching out to investors around the globe.
Resolving Insolvency: Issues like resolving insolvency have been made easier by promoting reorganization proceedings in practice. As a part of Ease of Doing Business in India, the country has strengthened access to credit by amending its insolvency law. Secured creditors are now given absolute priority over other claims within insolvency proceedings.
As a part of ease of doing business in India, the country has strengthened minority investor protections by increasing the remedies available in cases of prejudicial transactions between interested parties. India made enforcing contracts easier by introducing the National Judicial Data Grid, which makes it possible to generate case measurement reports on local courts.
Paying Taxes: To promote ease of doing business, India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country. India also made paying taxes cheaper by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer.
The Employee State Insurance Corporation (ESIC) has developed a fully online return filing with online payment. Due to the introduction of e-verification system, there is no physical touch point for document submission with the income tax authorities.
Business Reform Action Plan (BRAP) 2019 – 372 new action plans were introduced under the BRAP 2019. It included new sectors such as Healthcare and Hospitality, Central Inspection system, Trade License, Registration under Legal Metrology, and Registration of Partnership Firms & Societies. This reform includes the future and growth of previous plans by the states and union territories in India.
The Government of India has worked on creating a conducive environment by streamlining the existing regulations and eliminating unnecessary requirements and procedures to help businesses grow. The focus is on reduction in compliance burden by using technology, third party assessments, and faceless human intervention.
The Indian and US governments have come together to improve bilateral trade from time to time. Both the countries have various on going dialogues and meets that take place every year and contribute to making timely new policies in different matters of trade and commerce.
On-going trade partnerships between India and US
World Trade Organization - Dispute Settlement Body
The World Trade Organization is the only international governing body that decides the rules of trade. There are various WTO agreements signed by hundreds of nations, which form the process of trade between those countries. These agreements aim to ensure a smooth flow of trade and provide free trade possibilities. WTO has a dispute settlement body that ensures if any trade related disputes arise, they are dealt within the organization and a free flow continues. The Dispute Settlement Body (DSB) acts as a general council for disputes settlement for its member countries. India is a leading signatory of DSB and has resolved various minor and major disputes through the DSB.
India US Dispute resolution
The India - US MoU on Intellectual Property: An MoU was signed between the Department for Promotion of Industry and Internal Trade (DPIIT) Ministry of Commerce and Industry and the Department of Commerce of United States of America, United States Patent and Trademark Office during December, 2020. The nations aim to protect patents, trademark, and copyrights in the markets. It also aims to build capacity of Intellectual property registration and consecutively aims to develop mutually shared ideas and modes of IP enhancement.
Double Taxation Avoidance between India and US
The Double Tax Avoidance Agreement (DTAA) was signed between India and US. The agreement was amended to make way for free trade and bilateral exchanges. The agreement covers tax residents of US and India. It covers income tax earned by the residents of both the nations. The agreement does not apply to shell companies, the shell companies are mere non-operating bodies with no real or contentious business activity records.
Any US company that has a permanent establishment in India; the profit attributable to the permanent establishment will be taxed only in India. And the same process will apply to any Indian company established in US.
US India – Top Sectors of Export Import[TS1]
[TS1]India US Export Import
Indian Banks in the US
https://www.indianembassyusa.gov.in/
https://www.indianembassyusa.gov.in/pdf/menu/IndiaUSnew2021.pdf
https://sbnri.com/blog/nri-bank-accounts/nri-account-for-indians-in-usa
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1678004
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