British Business India 2011

8/3/2019 British Business India 2011

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Challengesfaced by

British business

in India

kpmg.com/in


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2011 KPMG, an Indian Partnership and a member rm o the KPMG network o independent member rms

aliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.


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The strong association between Britain and India goes back a long

time in history. Current statistics however show Britain having

been relegated out o the top tier league o Indias trading partners.

Whilst the trade gures may not be encouraging, cross border

investment between the two countries has picked up in the last ew

years Tatas ollowed up their earlier British acquisition o Tetley with

that o Corus and Jaguar Land Rover Vodaone bought into Hutchison

in India.

British industry that was traditionally associated with high-end engineering and innovationhas over the last century either changed hands or moved outside Britain and the economy

now seems to be largely driven by nancial services and retail. Interestingly, the dynamics oIndia too have changed particularly ater 1991 rom being an excessively controlled economy

to one unleashed and eager to outperorm itsel. When we look at the Indian liberalizationprocess in its twentieth year, a lot seems to have worked or India and it has done well on most

standards o economic development. The India story has been driven by high economic growth

and complemented by a young demography that promises to create a burgeoning middle class.While the initial phase was uelled by the services sector with inormation technology as thegrowth-engine, the next phase will have to be driven by the manuacturing sector. Indias large

private domestic market sets it apart rom other emerging markets that have primarily been uelledby exports or local government spends. Whilst weak exports may have traditionally hedged India rom

global meltdowns in the past, its growing international engagement could eventually neutralize that.The question that begs an answer in Indias twentieth liberalization anniversary year is has India done

enough to help sustain its growth?

The British-India complement is an interesting one. Ater the legacy o a strong bureaucracy and judiciarythat it let behind six decades ago, Britain has some attractive present-day Indian opportunities staring

in the eye. British interest in India that was earlier ocused around nancial services and retail is graduallytranscending into the sphere o roads, ports, deence, innovation, education and healthcare. That interest

is currently strong but risks waning unless India speedily resolves the issues around restrictions on oreigninvestments, and the uncertainty and requency o changes in regulation.

India nds itsel at the cross-roads and like other emerging markets is aced with the conundrum o balancinglocal interest with that o oreign investors. As an important player in an increasingly globalizing world, it will have

to objectively shape regulation keeping the competition in mind.

Foreword

Russell PareraCEO, KPMG in India

Roger PereiraCo-Chair, British Business Group




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KPMG in India conducted a survey involving respondents rom various British

companies operating in India to assess their level o satisaction with the localopportunity, business environment and regulation. Besides understanding

the general British perspective on the drivers and challenges in the India

opportunity, the survey sought insights on investors preerences among a

number o competing emerging markets.

Most o the developing economies have several common eatures, albeit with varying degrees oincidence, particularly in the context o the quality o inrastructure and skills; ease o investment

and doing business; level o bureaucracy and corruption; political and market stability; andcompetitive level o cost arbitrage. The enthusiasm and acceptance among oreign businesses

to invest depends on the level o development and maturity in these areas. More oten than

not, a single drawback can negate the larger attractiveness o a market. The ability o a market,particularly an emerging one to draw an audience is based on a unique set o metrics specic to

each business and its risk appetite. The objective o our survey was to see how India ared on thesome important measures and i there is indeed a way or oreign investors to deal with some o

the issues and challenges.

In the interest o objectivity, we decided to limit our survey coverage to the ollowing India relatedtopics that we believe are most relevant rom the standpoint o British investors:

developments in tax legislation

governance issues

dealing with local partners

availability o skills and talent

infation and increase in costs

view on inrastructure

pressures o geopolitics

expatriate related issues.

The views expressed herein are of the respondents and do not necessarily represent the

views and opinions of KPMG in India or British Business Group

Survey




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Drivers or investment 01

Challenges or investment 03

Preerences or investment destinations 04

Developments in tax legislation 05

Joint venture with local partners 06

Complexity o ownership structures 07

The UK Anti-Bribery Act 08

Lack o manpower with the requisite skills and training 09

Growing infation neutralizing the cost advantage 10

State o inrastructure and impact 11

Geopolitics and terrorism 12

Expatriates and work permits 13

Conclusion 14

Contents




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A large orty one percent o respondents considered the growing

Indian market as the primary driver or investment. The steady

economic growth coupled with a young population has translated

into growing aspirations and consequently a large consuming

middle-class in India. That in turn is uelling the demand or

dierent customer related services like banking, insurance, retail

and education. Given the natural alignment o these sectors with

British businesses, the Indian opportunity is quite attractive rom

the UK perspective. The upward spiral in demand is spilling into

niche business segments such as training, architecture, acility

management etc, that are typically served by smaller British

businesses, also helping create their interest in India.

The services sectors such as inormation technology,

business process outsourcing and nancial services havebeen the growth engines or the Indian economy. Thecompetitive pressure o a growing domestic and oreignmarket has driven the improvement in sector standardson delivery and service. From the position o being a weakengineering technology player, Indian industry seems to havedeveloped notably in sectors like automotive, engineering andpharmaceuticals. Besides a large growing domestic market,India oers an improved platorm or manuacturing qualityproducts in these sectors. The large investment in Indianproduction capacity by global automotive and pharmaceuticalplayers is a sign o Indias improving manuacturing skills andstandards. Nineteen percent o respondents considered

quality o manuacturing and services as the second mostimportant requisite or investment in India.

Drivers for investment

Source: KPMGs Challenges aced by British business in India survey

Drivers or

investment

1 | Challenges aced by British business in India




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British businesses accord a lot o weight to political stability

when deciding on global investment. Sixteen percent orespondents said that India ares well on this measurewhen compared with other emerging markets. The largestdemocracy has been a unique model o success witnessingair elections in a relatively mature multi-party system. Therecent non-violent drive around the civil rights movement isa good example o a mature system more so when seen inlight o recent happenings around the Arab world. The healthydiscussion and debate around contentious issues in Indiaprovides the required level o comort to British businesses.Save or a handul o sectors, India has extensively liberalisedthe regulation on oreign investment. While a section o therespondents were keen that sectors like banking, insurance

and retail should be totally ree or investment, 14 percento respondents think that India is a airly liberalized economy

enabling an opportunity or them to capitalize on. Some

believe that the restrictions particularly in important sectorslike nancial services also exist in several other markets in theemerging and even the developed world.

The cost arbitrage oered by emerging economies likeIndia has been an important actor or companies. However,the strong competition emerging rom smaller economiesis adversely aecting India that seems to be increasinglygrappling with mounting pressure o rising infation, salariesand costs. Indias improving position as a reliable sourcingbase is luckily helping it neutralize the competition. Only vepercent o respondents still look at India as a competitivemanuacturing destination.

Challenges aced by British business in India | 2




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Challenges or

investment

Thirty two percent o respondentsperceived weak governance andbureaucracy as a primary challenge orinvesting in India. They are rustratedwith the time taken to get approvals andclearances particularly at the state andlocal government departments. Whilstthere appears to be visible steps tocontrol corruption, it seems to continueunabated especially among the smallergovernment oces and departments.Investors would preer to be providedwith a clear roadmap o what a particularapplication or approval process involvesrather than having to mindlesslystruggle or want o clarity.

Twenty seven percent o participantsbelieved that the weakness in physicalinrastructure will be a major deterrentin Indias pursuit o a sustained growth.Whilst the government has largeinvestment plans or inrastructure,the emphasis on price rather than

quality when selecting developers

threatens to seriously undermine thisresolve. Poor quality roads, ports,power installations are likely to becomeserious impediments aecting progresso the Indian economy. India is said tohave the unique advantage o a youngdemography in contrast with a speedilyageing global population. This is adenite advantage provided that theyoung population is properly educatedand healthy; otherwise it threatensto become a liability with graveconsequences. The dearth o qualityeducation and healthcare systems couldprove a serious concern or India andneeds to be immediately addressed.

In the present day world o complexglobalization, oreign investments haveto be careully planned so that they arenot only regulation compliant but canalso be ecient rom a commercial andtax perspective. Whilst this planningis typically based on prevalent laws

and regulations, an arbitrary change

in the government stand contrary tothe existing law can seriously hamperthe entire business case. Twenty eightpercent o respondents were quitewary o regulatory uncertainty aroundthe Indian regulation, particularly thetax laws. Some initiatives like the DirectTax Code and Goods and ServicesTax promise to lend the desiredtransparency and consistency andare welcome but will have to addressindustry concerns and be enacted soon.

India is on the verge o high economicgrowth and would need adequatesupport rom the nancial servicessector. The British nancial servicesindustry is waiting to make substantialinvestments in India and eager to seethe barriers lower. Only ve percent orespondents consider the FDI regulationto be a serious hold back or oreigninvestment.

Challenges for investment

Source: KPMGs Challenges aced by British business in India survey





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Preerences or

investment destinations

Large companies are increasingly investing inemerging markets. British companies howeverpreer investing in India over other competingdestinations or a variety o reasons:

Legacy o language, bureaucracy and judiciary

lends the desired level o comort

Complementary political systems - one the oldestand the other the largest democracy

Complementary sector proles Britain canhelp develop most o the weak Indian sectors inrastructure, education, deence, innovation,retail, banking, insurance

India has the benet o a large domestic privatemarket and unlike other emerging markets thatare driven by government programs or exports

Indian manuacturing especially in high-technologyitems has improved notably automotive,pharmaceuticals, centre o excellence.

Preferences for investment destinations

Source: KPMGs Challenges aced by British businessin India survey





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Developments intax legislationUncertainty in tax legislation

The respondents had mixed viewson the state o tax legislation and itsimpact on oreign investment in India.The requent changes in regulationand a lack o clarity on certain issuesis a sore point. The judicial view isdivided on issues such as sotwaretaxation, permanent establishment,transer pricing, attribution o prots,deputation o employees etc. withinconsistent views emerging romvarious levels o judiciary. Further, the

practice o retrospective amendmentsin law disturbs the well settled positionadopted by tax payers and increasesthe tax costs o doing business in India.This uncertainty coupled with weak taxadministration is a matter o seriousconcern as it hampers the eectiveimplementation o investment plans.Small and medium enterprises eelintimidated by varied tax regulations andlack o clarity in implementation by theauthorities. Some respondents howeverelt that the regulatory conditions in

India are much better in comparisonwith some other developing countries.

Proposed tax reforms - Direct

Tax Code (DTC) and Goods &Services Tax (GST)

Most o the participants were o theview that India is heading in the rightdirection with DTC and GST. The primaryobjective o DTC and GST is to simpliythe tax legislation and its administration,eliminate distortions in the tax structureand reduce litigation. This movepromises to lend the required level otransparency and clarity to processes.GST is expected to rationalize theindirect taxes in India by reducingthe cascading eect and simpliyingprocedures. While the objective o bothlegislations is well received, there areconcerns around its implementationincluding timeliness or its roll out andaddressing critical issues in the drat lawbeore being enacted.

Concerns with cross-border

M&A transactionsA majority o respondents had seriousconcerns over recent developmentsconcerning cross border M&Atransactions. The action o the taxauthorities to tax income arising romjurisdiction outside India has triggereda debate that is likely to persist. Mostcompanies perceived the developmentsas destabilizing established laws andtax administration. The issues underthe ongoing litigation are unique and

unprecedented and its nal outcomewill have a signicant impact on globalmergers and acquisitions involvingIndian businesses. The investors arealso keeping a close watch on how theinterpretation o the new provisionsunder the DTC will evolve to tax similartransactions.





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Joint venturewith local partners

A number o respondents spoke onthe traditional preerence o oreigninvestors to oray into India alongwith local joint venture partners. Thiswas normally seen where the local

sector has a record o a cumbersomeregulation, complex environment orthe regulation restricts the oreignpartner rom holding a majority interestin the Indian entity. The local partnerscontribution is a big advantage in theapproval and setting up process, andin commencing business in the localmarket. In sectors that restrict oreignholding, it is mandatory or the localpartner to be part o the business.

The people who participated in the

survey believed that there are quite aew Indian sectors that are deprivedo the potential growth opportunityor want o the required state-o-art technology or know-how viz.inrastructure, deence, education,healthcare, retail, clean technologyand innovation. By virtue o their longexperience in all these sectors, Britishcompanies may be ideally suited to workwith Indian partners in successullygetting projects o the ground. In the

eld o innovation too, Britain and Indiacan play partners. The UK has beentraditionally associated with the besto global innovation that continues tothrive across centres o excellence

in most o the British universities.Some large British retail companies,such as Unilever have already workedtheir innovation in pushing personalcare products into the Bottom of thePyramidsegments o the larger non-urban Indian society. Inclusive growthhappens to be an important item on theIndian agenda, and enterprising Britishbusinesses can do really well in helpingand commercially beneting rom that.India has a large number o young and

interesting entrepreneurs who could bethe ideal partners or the British industryto joint venture in India.

Whilst a good number o oreign jointventures in India have been successul,a large number have also altered. Theearlier generation o British companiespreerred to invest in India along witha partner. However, most o the newerentrants preer to make the Indian orayon their own and a large number othose have been quite successul.

The respondents cited breach otrust as a common reason or Indianjoint ventures to ail. Though the twoparties come together to collaborateand benet rom complementary skills

and strengths, the inability to deliveror all short on perormance can becase or discord. Whilst the Indianpartners have raised issues againstoreign partners investing in other jointventures outside the existing one,they themselves have been accusedo pushing or a joint venture witha narrow objective o scrupulouslypilering oreign technology. Clash omanagement culture was anotherimportant dierence highlighted by the

respondents. The oreign managementis process and system oriented and incontrast to the local management thatseems to be relatively less organizedin approach. The eagerness o the newgeneration o Indian entrepreneursto grow the business at a rapid paceis normally in contrast to the oreignpartners conservative approach.





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Complexity o

ownership structuresA lot o respondents said that the complexity o ownership structures associated with sectors likedeence, education and retail was a key impediment to investing in India. British companies are wellplaced to work with Indian partners in driving these Indian sectors.

Whilst the respondents appreciated the cap on oreign holding in some critical sectors, they saidthat, restrictive regulations in some others only hampers Indias pursuit o development andsel-suciency. The deence osets policy has been lauded by oreign investors. However, thedecision to introduce a ceiling on holding in local joint ventures is considered to be disruptive.The eeling is that, a minority holding in a high-technology deence joint venture cannotencourage the oreign partner to oer any leading edge technology, and may work to thedetriment o India interests at indigenising its deence capabilities.

The respondents believed that sectors with a ceiling on oreign investment typically arecapital intensive. Due to the restrictions, the high capital contribution gets structured atdierential prices - the oreign partner subscribing a minority equity interest at a highpremium and the local partner buying a majority equity interest at par. Around the timethat subsequent rounds o unding or growth capital comes up, it has been observedthat the local partner either does not have the ability or is not eager to invest the capitalrequired to sustain holding, leading to a cause or misunderstanding.

It was unanimously said that i India does not have capabilities in certain sectors thenit is imperative to open up that sector or oreign investment as India cannot benetby exclusivity. The complexity o the regulation and the bureaucracy is also seen asa discouraging actor or oreign companies to invest in India. The delay on the parto the government to introduce reorm in certain sectors has prompted a waitand watch attitude among investors when it comes to raising their investment.





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The UKAnti-Bribery Act

The UK Anti-Bribery Act which came intoorce in the month o July 2011 is aimedat removing corruption rom the Britishbusinesses both in the UK and outside.This can have vast implications or

British companies and their operationsespecially in emerging economies suchas India. The respondents unanimouslyagreed that eradicating corruption is animportant area and that they will helpensure compliance o the UK Anti-Bribery Act to the ullest

To this extent most o the companieshave appointed legal advisors in theUK and have already included thenecessary components and processesin their risk and compliance structures.

In lot o cases senior managementteams are travelling to India to stressthe importance o this Act. Manycompanies cite a zero-tolerance attitudeto corruption where business deals arenot considered i there is any aspecto bribery or corruption involved.

Measures also include not allowing cashtransactions o more than a nominalsum, which automatically mandatestransactions being on record therebydiscouraging the payment o bribes.

However, a number o participantsview serious implications o the Act,particularly, in terms o the need to beaware o not just what their companyis doing but also be responsible or theactions o its employees and agencies.





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Lack o manpowerwith the requisiteskills and trainingOne o the major attractions o the Indian market as a destination oroverseas investment is the availability o a large talent pool. ConsideringIndias leading position in the global inormation technology and

business process outsourcing elds and the strides made byother service sectors such as nancial services, there is a generaleeling that India has abundant trained resources in those elds.The proportion o the Indian population working in these areasis however extremely limited and is not a true refection o itsmanpower quality, especially on skills and training. Most o therespondents believed that the truth is ar rom comortable and isa challenge or local and oreign employers alike.

Despite the large number o graduates and engineers passingout rom universities and technical institutions, there is agrowing concern on their employability most o them lackthe required training, aptitude and sot skills. There is aserious concern that the local education system is entirelybased on theory and archaic teaching methods and systemswhich lack the desired value to impart practical training. Asa result, the employers end up having to invest valuabletime and resources in training recruits to make thememployable. Whilst most British companies nd it achallenge to attract suitable talent in India, attritionalso becomes a problem due to the talent scarcityand people moving jobs and loyalties or smallimprovements in compensation packages.

British companies, especially those in niche

areas nd it very dicult to source local talentand have no option but to depute senior peoplerom overseas just to train the local recruits pernecessary technical needs.

The lack o skilled and trained talent is anopportunity or British universities to capitalizerom. British vocational education playersare also increasingly exploring the Indianopportunity through local tie-ups. There aresuggestions or the Indian government toset up centres o excellence in universitiesor research and development, ollowing

the British university model.





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Economic growth is typically supposedto be ollowed by the actor o infation.The liquidity created in a growingeconomy is bound to drive consumptionand become infationary, unless it isadequately backed on the supply side by

investment in capacity. India sees itselin this classical cycle and to complicatematters has also altered on the scaldiscipline in recent months. A largenumber o respondents are worriedthat the salaries in India that were atairly low levels about ten years ago arenow growing at a scale and rate thatis speedily neutralizing the Indian costadvantage. The sectors like businessprocess outsourcing and call centresare gradually making their way out oIndia and onto cheaper destinations

in Southeast Asia. The Indiandetermination at improving product

and service quality though slow hasbeen relatively more impressive whencompared with other emerging marketsand promises to oset the impact ocosts. Whilst the Indian infation has ledto the outfow o low-end commodity

kind o products and services, largeglobal companies still trust the Indianindustry with higher value addedproducts and services.

There was a section o respondentswho elt that although the salary levelsin India are rising across the board, Indiawas still a very competitive locationin comparison to other developednations, particularly at the lower end othe employee spectrum (unskilled orsemi-skilled). India has a long way to

go beore the salary levels reach thoseprevailing in the developed markets.

However, companies that were primarilylooking at pure play cost arbitrage asthe business case or their operationsin India have seen their protabilityshrink. The key is a change rom the litand shit model to an eciency based

model with a ocus on ecient deliveryplatorms and centres o excellencethat can deliver improved results overthe longer term. British companies inIndia have also managed rising costs ina number o other ways. One strategyin the services sector is the rolling outo a pyramid structure where teams areheaded by a limited number o high-cost expert resources and supported bylow-cost sta that is specically trained.Another strategy or managing costs iscaptive management o processes that

were earlier outsourced.

Growing infation neutralizingthe cost advantage





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State o infrastructure

and impactThe respondents said that thegrowth in Indian economy has beenprimarily driven by the services sectorthat besides technology does notreally depend on much o physicalinrastructure. It is believed thatthe next phase o growth is likelyto come rom the manuacturingsector. Unlike the services sector, the

manuacturing sector relies extensivelyon inrastructure particularly ports, roadsand power. Whilst the government isseized o this imperative, it has not beenable to catalyze investment to the extentrequired. India needs inrastructureinvestment in excess o US-$ 1.5 trillion,with a large share rom the privatesector. Considering the magnitudeo this requirement, large oreigninvestment in the orm o technology,construction and capital is deemed

necessary. The government initiativeon the Public Private Partnership model(PPP) has met with a limited response.

British businesses believe that thepresent policy on appointment oproject developers is fawed in beingoverly centred on the subject o priceinstead o the project lie cycle. Theappalling state o roads especially incities like Mumbai (India) is a testamentto that view point. With a growingeconomy that it is, the inrastructure in

India needs to happen at the earliestto help ensure that the supply chainand utilities part o the business plansshow commercial viability. The GoldenQuadrilateral Road Project or the DelhiMumbai Freight Corridor are goodexamples o investment in the rightdirection, but India would need to havemany more o these to sustain growth.The respondents said that the PPPpolicy has been Britains contributionto the inrastructure world and it has

the worlds best companies capableo delivering on policy, master plan,construction and management o Indianroads, rails and port projects.

The participants also considered thesocial inrastructure in the context oa country as populous as India as animportant area. India, today, boasts oa young demography likely to standout in a ew years, when comparedwith the rest o the world that wouldbe much older. That would indeed bea good position or India to command

but provided that the young populationis educated and healthy. I not, thisadvantage could turn into a seriousproblem o large number o uneducatedpeople without skills or jobs creatingmassive unemployment, or growingnumber o young people inficted withdisease and serious health problems.The soter though serious angle onsocial inrastructure makes it IndiasAchilles Heel. Yet again, education andhealthcare are two areas that the British

industry can help India on.





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Geopolitics

and terrorismThe respondents agreed that terrorismand insurgency were importantconsiderations in evaluating the choiceo overseas investment destinations.Despite India having been at thereceiving end o terrorism over the lastew years, British companies view Indiaquite avourably. Most o them viewIndia as a stable and sae destination orbusiness. They believe that terrorism

today, in one orm or another, isconsidered to be global risk. Evendestinations such as the Nordics thatwere earlier considered sae, are nowvulnerable to the threat o terrorism.India is not uniquely aected by thischallenge any more and considering thepolitically sensitive situation around it,ares rather well.

Foreign investors have adjusted to thenew risk o global terrorism and are

adequately actoring that into theirbusiness plans. More companies arealso investing in business continuityplans to mitigate the risk o unoreseencalamities. As long as these risks andthreats remain at moderate levels,British companies will continueto operate in India. Overall India isconsidered to be better prepared,resilient and able to cope with terrorist

attacks than even countries like the USAthat are seen to take a much longer timein returning to normalcy.

On the subject o internal insurgency,British companies eel that recenteconomic development in India hasnot been entirely inclusive and hasresulted in a growing disparity in wealthlevels and development across varioussections and segments o society andcountry at large.





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Expatriates

and work permits

A mixed experience was noticed inthe respondents in relation to the

willingness o expatriates to workin India. They eel that India is animmensely sought ater destination orexpatriates and especially youngsters,and a number o them are eager towork here. It is recognized that India is arelatively sae destination or work and itoers good quality o lie at a reasonablecost. On the other hand, expatriatesalso complain about the limitation onsocial interactions, given the small sizeo the expatriate community even inbigger cities when compared to other

international destinations. Anotherreason cited or the reluctance on part

o expatriates to move in with amiliesis the lack o education inrastructure o

international standards.

The process o getting an Indian visa andwork permit is becoming dicult andcumbersome. The practical challengeso obtaining annual Foreign RegionalRegistration Oce (FRRO) registrationsin some cases also viewed negatively.

Some British companies choose toconsciously reduce the number o theirpermanent expatriate sta in Indiaessentially to reduce costs and instead

preer to depute people on a need basison short term secondments.





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ConclusionThe survey results indicate that British businesses continue to nd India as an attractive investmentdestination. While the market opportunity is an obvious consideration, the British investors arealso driven by actors such as improvement in the Indian manuacturing and service quality,

and the stability in the Indian political system. India stands out as being amongst the preerredinvestment destination or British businesses. The challenges and ineciencies in the Indiansystem are recognized as serious impediments and interestingly also as opportunities rom aBritish standpoint. A large number o respondents were critical about the lack in skills and qualityo education in India, and rated these as the most important challenges. Interestingly India isnot considered to be uniquely riskier on the issues o geopolitics or terrorism. The issue oinconsistency, requency o change in regulations and concerns around eective and timebound implementation o tax reorms stood out commonly in the survey and will have to beaddressed to provide the desired comort or oreign investment.

We would like to sincerely thank all the participants who provided us

with their time and responses or the survey. This document would nothave been possible without their invaluable contribution.

Acknowledgement





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About KPMG

KPMG is a global network o proessional rmsproviding Audit, Tax and Advisory services. Weoperate in 150 countries and have 138,000people working in member rms aroundthe world. The independent member rmso the KPMG network are aliated withKPMG International Cooperative (KPMGInternational), a Swiss entity. Each KPMGrm is a legally distinct and separate entity anddescribes itsel as such.

Our Audit practice endeavors to provide robustand risk based audit services that address

our clients strategic priorities and businessprocesses.

KPMGs Tax services are designed to refectthe unique needs and objectives o each client,whether we are dealing with the aspects ocross-border acquisition, global transer pricing,expatriates or indirect taxes.

KPMG Advisory proessionals provide adviceto clients on business strategy, perormanceimprovement, cost optimization, risk mitigation,process validation, nancing, mergers &

acquisitions and human capital services.

In todays connected world, where bordersare just reduced to dening geographies,businesses are looking at expanding acrosscountries making the world smaller than ever

beore. Our country corridors are just thechannel that businesses needs to grow beyondborders. We oer customized solutions aroundmarket assessment, investment strategy,location analysis, tax and regulatory structures,organization and operations. Our global networko proessionals is in a position to give the entirebusiness liecycle the edge that it deserves inorder to succeed wherever it may be or want tobe.

KPMG in India, a proessional services rm, isthe Indian member rm o KPMG International

Cooperative (KPMG International.) and wasestablished in September 1993. As memberso a cohesive business unit they respond to aclient service environment by leveraging theresources o a global network o rms, providingdetailed knowledge o local laws, regulations,markets and competition. We strive to providerapid, perormance-based, industry ocused andtechnology enabled services, which refect ashared knowledge o global and local industriesand our experience o the Indian businessenvironment. We provide services to over 5,000international and national clients, in India. KPMGhas oces in India in Mumbai, Delhi, Bangalore,Chennai, Hyderabad, Kolkata, Pune, Kochi,Chandigarh and Ahmedabad.





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June 3, 1997...

Thats when the rst BBG was initiated thanks to Simon Scar; according to MarkRunacres, who to many o us is Mr BBG, Delhi. And Mark adds: BBGs exist to promote

commercial relationship(s); are important as an inter-active platorms or rms, largeand small, with a stake in the relationship; independent o Governments but allow both

Governments to reach out to the business community and vice versa.

Giving a Mumbai perspective, Alan Rosling says, The BBG Bombay has grown rom its roots15 years ago as essentially an expats club or British managers in large British companies

posted to Bombay, to todays vibrant orum or bringing together business big and small, Britishand Indian, who share a passion or promoting Indo British commercial ties. With an impressive

monthly speaker programme, special events to host VIP visitors and an imaginative socialprogramme...

Unlike the other international chambers o commerce, BBGs in India are like a commonwealth oBBGs. Each one independent. And quite entrepreneurial. In Chennai, we have the youngest o the

BBGs, since June this year. And, as Mark has just learnt, Kolkata is in the process o re-launchingtheir BBG. Surely, Bangalore and Hyderabad will ollow the example that Chennai has set.

From what can be seen and learnt over the past ten plus years, while the objectives are very clearlyto promote business, investment and trade between Britain and India, what has takenprecedence is

networking. And that is important too. Especially or SMEs, who orm the bulk o our membership.

The KPMG Study could well be a turning point or all BBGs. We all, very clearly, want to promote business,investment and trade between Britain and India. But where do we begin? What are the real challenges?

Thanks to KPMG survey, one can now make a decisive beginning.

About British BusinessGroup (BBG)





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The inormation contained herein is o a general nature and is not intended to address the circumstances o any particular individual

or entity. Although we endeavour to provide accurate and timely inormation, there can be no guarantee that such inormation

is accurate as o the date it is received or that it will continue to be accurate in the uture. No one should act on such inormation

without appropriate proessional advice ater a thorough examination o the particular situation.

2011 KPMG, an Indian Partnership and a member rm o the KPMG network o independent member rms aliated with KPMG

International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Contact us

Rajesh Jain

Head - MarketsT: + 91 22 3090 2370E: [email protected]

Gautam Chemburkar

Executive Director - MarketsT: + 91 22 3090 1930E: [email protected]

kpmg.com/in

Documents

British Business India 2011