1. Assistant Professor of Law
Multinational Companies vis a vis Legal & Regulatory Environment In India
KALPESHKUMAR L GUPTA
Assistant Professor of Law
International Conference on Liberalization & Globalization : Changing Legal Paradigm
July 14-16, 2016

2. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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3. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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4. Introduction
Setting up business requires many dimensions to be evaluated.
PESTLE Analysis
Furuta Manabu & Aggarwal Aradhna (2014) classified regulation in two ways, efficient and inefficient.
The regulatory environment is now the top issue that can have the most impact on a company, according to 400 U.S. CEOs across all major industries surveyed by Forbes Insights and KPMG.
Thirty-four percent of CEOs are spending more time with regulators or government officials, or considering doing so (Moreno Kasia, 2014)
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5. Introduction
A number of cases over the last few years – cancellation of 2G telecom licenses and coal block allocation, retrospective taxation cases involving major multinationals and Minimum Alternate Tax (MAT) notices to Foreign Institutional Investors (FIIs) – too have made investors quite nervous (Singh Namrata & Mukherjee Shubham, 2015).
Maggi Ban, Diesel Vehicle Ban are recent examples of uncertain business environment in India.
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6. Introduction Objectives of the paper
Present paper will highlight operation of multinational companies in India and supporting environment for it, ease of doing business factors, regulatory environment in the country, some selected judicial decisions.
Main objectives of the present paper are to focus on regulatory and legal environment for conducting business in India and India’s response to these deciding factors.
Present paper is descriptive in nature based upon secondary data i.e. reports, govt. policies, judicial decisions, newspaper articles.
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7. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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8. Area of Business Regulation
The ease of doing business index is an index created by the World Bank Group. Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
Reporting started in 2001 and more than 800 academic papers have used one or more indicators.
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9. Area of Business Regulation
Sr. No.
Indicator Set
What is measured? 1
Starting a business
Procedures, time, cost and paid in minimum capital to start a limited liability company 2
Dealing with construction permits
Procedure, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanism in the construction permitting system 3
Getting electricity
Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the cost of electricity consumption 4
Registering Property
Procedures, time and cost to transfer a property and the quality of land administration system 5
Getting Credit
Movable collateral laws and credit information system 6
Protecting Minority Interest
Minority Shareholders’ rights in related-party transaction and in corporate governance 7
Paying taxes
Payments, time and total tax rate for a firm to comply with all tax regulations. 8
Trading Across Borders
Time and cost to export the product of comparative advantage and import auto parts. 9
Enforcing Contracts
Time and cost to resolve a commercial dispute and the quality of judicial processes. 10
Resolving Insolvency
Time, cost, outcome and recovery rate of a commercial insolvency and the strength of the legal framework for insolvency 11
Labour Market Regulation
Flexibility in employment regulation and aspects of job quality
Area of Business Regulation
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10. Ease of Doing Business Rank Dealing with Construction Permits
Country
Ease of Doing Business Rank
Starting a Business
Dealing with Construction Permits
Registering Property
Paying Tax
Enforcing Contracts
Singapore 1 10 17 5
New Zealand 2 3 22 15
Denmark 29 9 12 37
Korea 4 23 28 40
Hong Kong 7 59 UK 6 45 33
USA 49 34 53 21
Sweden 8 16 19 11 24
Norway 26 13 14
Finland 27 20 30
Taiwan, China 18 39
Germany
107 62 72
France 32 85 87
UAE 31 60
Japan 81 68 48
121 51
Bhutan 71 91 79 50
Saudi Arabia 82
130 86
Nepal 99
105 78
124
134
Sri Lanka 98 77
153
158
161
Brazil
116
174
169
178
India
155
183
138
157
Pakistan
122 61
137
171
151
Bangaldesh
117
118
185
188
Ease of Doing Business Rankings
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11. Ease of Doing Business Rankings - India
Year
Ranking
2016
130
2015
134
2014
132
2013
2012
2011
133
2010
2009
120
2008
124
2007
116
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12. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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13. Selected Cases Natco v/s. Bayer Maggi Case
Coke Taxation – plant shut down case
Ban on Diesel Cars
Equalization levy
Arbitration
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14. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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15. Conclusion & Discussion
Unpredictable legal environment in India
No conducive environment for doing business in India
Lakhs of commercial matters pending involving billions of rupees
Pendency of cases affects country’s economy
Discussion
Need of Regulation Impact Assessment
Amendment in Arbitration
Commercial Courts
NCLT/NCLAT
Insolvency & Bankruptcy
Need to have balanced approach in implementing law & regulation.
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16. Outline of the presentation
Introduction
Ease of Doing Business
Selected Cases
Conclusion & Discussion
Q & A
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18. References :-
Coglianese Cary (2012), “Measuring Regulatory Performance, Evaluating the impact of regulation and regulatory policy”. OECD Expert paper No. 1, August 2012
Furuta Manabu & Aggarwal Aradhna (2014), “The Impact of Business Regulations on Economic Performance of Small Firms: Empirical Evidence from Indian Manufacturing”, Wadhwani Foundation Policy Research Center Working Paper 001 (March), New Delhi
Jacobs Scott (2015), “The RIA Revolution”, Business Line, November 19, 2015
Lloyd Dixon et al. (2006), “The Impact of Regulation and Litigation on Small Business and Entrepreneurship : An Overview”, Working paper WR-317-ICJ, A Rand Institute for Civil Justice Center.
Moreno Kasia (2014), “Regulatory Environment Has More Impact on Business Than the Economy , Say U S CEOs”, Forbes, August 12, 2014
Singh Namrata & Mukherjhee Shubham (2015), “Diesel vehicle ban adds to regulatory uncertainty, Unpredictable Environment Makes Doing Biz Tough: CEO”, The Times of India, Ahmedabad, December 18, 2015, p 13
(---) 2015, “Coco-Cola may shut plants if ‘sin’ tax imposed”, The Tribune, December 12, 2015 retrieved from
Times of India, Ahmedabad, December 17, 2015, p 11
The Times of India, December 14, 2015, p 15
December 14, 2015
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19. Thank you !
Kalpeshkumar L Gupta 1 19