Pre-Investment Due Diligence in India

Published: May 2016

In this issue of India Briefing Magazine, we examine issues related to pre-investment due diligence in India. We highlight the different regulatory, tax, and socio-economic issues that a company should be aware of before entering the Indian market. We also detail some of the topics related to entry structures while investing in the Indian market, as well as cultural and HR due diligence, which may differ from state to state.

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In this issue:

  • Unique Characteristics of Due Diligence in India
  • Key Considerations When Conducting Regulatory Due Diligence in India
  • Navigating HR Due Diligence in India
  • Case Study: Sidestepping Due Diligence, Uber Exposes its Liabilities 

India’s economy has been averaging a steady seven percent growth over the past few years. Amid the declining optimism among other emerging economics, India’s outlook remains positive. The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government has introduced a multitude of economic programs since 2014. Make in India remains the flagship initiative, while all other development programs seek to complement it. The International Monetary Fund (IMF) projects an optimistic 7.5 percent growth rate for India in the fiscal year of 2016-2017 – up from 7.3 percent in 2015-2016.

India has replaced China as the top location for foreign direct investment (FDI) by attracting U.S. $63 billion worth of FDI projects in 2015 with FDI increasing by 30-40 percent in the past two years, according to Finance Minister Arjun Jaitley. However, while India represents a promising future as an emerging market, it has various regulatory and tax issues that strongly contrast with other emerging economies. Red tape and bureaucracy can further contribute to delays, adding roadblocks to a company’s growth. In such a market, it is imperative for companies to conduct due diligence to safeguard their assets and reputation.

In this issue of India Briefing Magazine, we examine issues related to pre-investment due diligence in India. We highlight the different regulatory, tax, and socio-economic issues that a company should be aware of before entering the Indian market. We also detail some of the topics related to entry structures while investing in the Indian market, as well as cultural and HR due diligence, which may differ from state to state.

Foreign companies should be quick to notice the various idiosyncrasies of India’s laws and regulations; this India Briefing Magazine aims to prepare and guide companies to mitigate such issues.


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