India: „FII investment in stocks falls to 3-yr low“

According to a report in the Financial Express (April 8th, 2012):

The net investment by foreign institutional investors (FIIs) in stock market during 2011-12 was the lowest in the last three years at Rs 47,935 crore.

FIIs made a net investment of Rs 47,935 crore in the equity market during the fiscal ended March 31, 2012, which was way below the figure of Rs 1.1 lakh crore in 2010-11 and Rs 96,857 crore during 2009-10, according to the SEBI data.


The numbers above would tantamount to the following approximate figures after factoring in exchange rate variations:

FY 2011-12: Rs.479.35 billion / $9.6 billion ($1=Rs.50, approx. figure)
FY 2010-11: Rs.1100.00 billion / $24.1 billion ($1=Rs.45.58, FY average value)
FY 2009-10: Rs.968.57 billion / $20.4 billion ($1=Rs.47.42, FY average value)

Indien: „Ausländische Konzerne drohen mit Aus von Investitionen“

Laut einem Bericht des Hamburger Abendblatts (3. April 2012):

Indien will längst abgeschlossene Firmenübernahmen auch rückwirkend besteuern: Zahlreiche ausländische Konzerne drohen der indischen Regierung damit, wegen der jüngsten Steuerpläne den Investitionshahn abzudrehen. In der bislang massivsten Kritik an der Politik des Schwellenlandes haben sieben Wirtschaftsverbände in einem Brief an Ministerpräsident Manmohan Singh angekündigt, ihr Engagement zu überdenken. Die Organisationen vertreten insgesamt mehr als 250.000 ausländische Firmen mit einem Umsatz von zusammen mehr als sechs Billionen Dollar. […]

Link zum vollen Bericht…

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Global investors warn India against implementing retrospective tax laws

Plans by India’s Finance Minister Pranab Mukherjee to amend taxation laws with retrospective effect, going as far back as 1962, have rattled global investors. Specially Item 113 of the Finance Bill, apparently targeted at Vodafone is troublesome. This amendment appears to circumvent judicial fair play and to undermine constitutional procedures in that it seeks to grant tax authorities with almost arbitrary powers that, if approved by the Parliament, would be enforceable „notwithstanding anything contained in any judgment, decree or order of any Court or Tribunal or any authority […]„. Even within India commentators have criticized the proposed amedment as „draconian“.

This is, however, not the only proposal causing headache to firms, global and domestic. There are reports that „tax commissioners would have powers to arrest industrialists or company officials under new provisions of the General Anti-Avoidance Rule (GAAR)„. Mr. Mukherjee has sought to reassure the industry by saying that „Tax department won’t act like policeman„. This is however, at best, a weak consolation since the very option remains in force. Mr Mukherjee reportedly also assured that „a plethora of cases would not be reopened for scrutiny„, which is an even more problematic statement since it means that the provisions of law would be probably applied selectively. According to one report, the proposed Finance Bill contains over 20 amendments with retrospective effect.

Now, „Industry groups representing 250,000 companies across North America, Asia and the U.K. have warned India’s prime minister that a proposed retroactive tax plan is causing foreign businesses to reconsider investing in India“, as Business Week (April 2, 2012) reports.A ccording to one report in the Daily News & Analysis the letter to Mr. Manmohan Singh states, „The sudden and unprecedented move in the Bill has undermined confidence in the policies of the government of India toward foreign investment and taxation, and has called into question the very rule of law, due process and fair treatment in India.“

Links to Reports on this Topic


„Indian IT cos in US paid $15 bn taxes in last 5 years“

„The Indian IT industry in the US has contributed $15 billion in taxes alone in the last five years“, according to India’s Foreign Secretary Ranjan Mathai.

According to a report appearing in the Economic Times (Feb. 8, 2012):

NASSCOM estimates that Indian industry employs over 100,000 in the US up from 20,000 six years ago, he said adding it supports 200,000 other jobs, including indirect ones, apart from enhancing the competitiveness of some the US industries.

„Most Indian companies are setting up development centres. Indian IT industry contributed $15 billion in taxes over the last five years. This success story should not be set back by stringent visa regulations which act as a non-tariff barrier,“ he said.

„According to a back of envelope calculation – Indians paid over $200 million in visa fees. Perhaps $30-50 million has been taken from young aspiring Indians working in businesses whose US visas were rejected. The pink slip has become a greenback!“ Mathai said.

Source: The Economic Times, online, 08.02.2012