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This issue of India Briefing focuses on two dramatic, ongoing initiatives by the Indian government to fuel economic activity in the country: the introduction of a dual goods and services tax and further opening in the retail sector. India’s existing indirect tax structure is being restructured with a synchronized tax system and uniform levy, continuing national tax structure reform to encourage entrepreneurial initiatives and economic activity in India. A dual – Central and State level - Goods and Service Tax (GST) is planned to replace most of India’s current indirect taxes. A country-wide GST is anticipated to be realized by 2012-13.
Additionally, the Indian government is currently discussing the removal of the 51 percent cap on FDI into single-brand retail outlets and allowing some degree of FDI in multi-brand retailing, which has so far been prohibited in India. Recent protests and boycotts of modern retailers in India indicate that the forays foreign retailers have made into India’s retail sector are not welcomed by all. Finally, a closer look at India’s retail sector – differences between industries, city tiers and how India compares to China in this respect.