Companies in the United Kingdom find it easier doing commerce in India. But they also find the regulatory and valid hurdles, including those when it comes to the goods and products and services tax (GST), together with corruption, as major areas of concern, revealed a survey of 106 UK organisations operating in India, spanning manufacturing, products and services, and higher education.
The ‘Doing Commerce in India Outline 2020’ by the United Kingdom India Commerce Council (UKIBC), formally launched by UK Investment Minister Lord Gerry Grimstone at a virtual round table with Indian industry titans on Thursday, finds regulatory uncertainty – including retrospectivity of taxes – as a dampener on commerce.
The outline is UKIBC’s sixth of an annual series dating back to 2015.
“In spite of the ew challenges to commerce such as Brexit, Covid-19, and the global economic slowdown, UK companies not only remain deeply dedicated to India, but many are optimistic approximately expanding their commerce footprint in India,” said UKIBC Group Chief Executive Officer Jayant Krishna.
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The outline said, “Businesses in the United Kingdom generally tend to not anticipate that key rules of the game would be changed drastically after their investments have been made. From 2012 onwards, the policy of retrospective taxation has been a dampener on the influx of foreign capital from the United Kingdom and elsewhere into India.”
The outline found that 66 per cent of the United Kingdom businesses surveyed said they believed it is getting easier doing commerce in India because of “progressive reforms” and improvements in the components of India’s commerce surroundings, such as the availability of reinforce and service providers, skilled labour, and provide chain.
Though the rating on quite a lot of parameters by these companies in a survey conducted by the UKIBC improved this year over the preceding year, none of them is yet in the “excellent” or “very good” category.
On a score of zero to five, the average score for India has improved to 2.92 in 2020, from 2.74 in the preceding year.
“Legitimate and regulatory barriers were the most regularly cited obstacles to commerce, as outlined by 51 per cent of respondents. Foreign exchange regulations, GST process issues, high import tariffs, lack of alignment with international standards remain the top four regulatory irritants,” observed the UKIBC.
The survey suggests that bettering bureaucratic processes with greater accountability, increasing regulatory certainty, simplification of the GST processes, bettering the quality of infrastructure, and making single-window clearance effective were the most sought-after reforms by UK businesses, in that order, famous the UKIBC.
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India’s Aatmanirbhar Bharat mission may be seen by the United Kingdom firms as an possibility to doing more commerce in the country, leveraging UK’s innovation for manufacturing in India, the outline found.
UKIBC Chair Richard Heald, OBE said this outline comes at a time when the United Kingdom and India have dedicated to an enhanced commerce partnership as agreed to by the United Kingdom Secretary of State for International Commerce Liz Truss and India’s Minister of Business and Industry Piyush Goyal in July this year.
“Even supposing a free commerce agreement is the eventual goal, the instant precedence is to take away market-access barriers and make it easier for companies to function in and enter the Indian market,” added Heald.
For the third year running, Maharashtra emerged as the state with maximum incremental improvement, followed by Karnataka, Delhi, Gujarat, and Tamil Nadu.
Next in sequence were Uttar Pradesh, Telangana, Andhra Pradesh, Chandigarh, and Haryana to total the top 10, found the outline.