Doing business

(Last updated: 26 Jun 2008)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

Though a traditional society at heart, when it comes to business dealings most internationally accepted practices are widely followed in the country. Indians, for the most part, possess all the required skills such as language (English is widely used in written and oral communication), managerial and technical, and are able to negotiate competently.

Any entertaining of business partners or clients is mostly done outside of the home.
 
In a business meeting using a formal manner of addressing a person eg. ‘Mr. Smith’, is safer than using their first name.

Business cards are expected to be exchanged at most business meeting.

Punctuality is not a strong point of most Indians, but that is more a cultural thing than a professional shortcoming.

A multicultural and multi-religious society, India celebrates numerous religious and secular holidays. In certain parts of the country, some of the religious occasions are celebrated many days, such as Durga Puja in West Bengal and neighbouring states, and Ganesh Chaturthi in Maharashtra. Dussehra and Diwali are also widely celebrated. It is advisable to avoid scheduling a meeting around major holidays.

Detailed information and tips on business etiquette in India is available at www.executiveplanet.com/index.php?title=India

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Import Tariff and Exemption Notifications are available at - www.customs.gov.in/customs/cst-0708/cst-main.htm

India’s foreign trade policy, information on import tariffs, customs regulations and notifications are available below through the following links:

• India’s Foreign Trade Policy for 2008-2009
• Customs Regulations
• Import / Export Restrictions / Prohibitions under Customs law
• Procedure for Clearance of Imported and Export Goods

Product certification, labelling and packaging

Labelling

Outer containers should bear consignee's mark and port mark and also should be numbered (to accord with packing list) unless their contents can be otherwise readily identified. Gross weight must be shown on two faces.

Detailed Information on the same is available at www.infodriveindia.com/Exim/Indian-Customs/Non-Tariff-Barriers/Labeling-Rules-for-Imports.aspx

Packaging

Packing should be strong and should guard against extreme heat and humidity in summer, and possible storage in the open and pilferage. Steel strapping is recommended.

Special certificates

Livestock imports must be accompanied by a sanitary certificate issued by an approved authority in the country of origin.

Must be certified by an approved organisation.

Plants, plant products and leaf tobacco require phytosanitary certificates issued by an approved authority in the country of origin and certified by an approved organisation.

Additionally, leaf tobacco must be accompanied by a special certificate stating that the tobacco is free from ephestia elutella or that the pest does not exist in the country of origin. Any shipment of tobacco leaf arriving without the above certificate will be examined by an Indian Government inspector and a fee charged.

Used clothing requires a certificate of fumigation issued by an approved authority in the country of origin.

Port wine requires a certificate indicating alcoholic content and spirits may need a certificate of maturity.

Methods of quoting and payment

Quotations are usually required to indicate FOB or CIF prices, with freight and insurance charges separately shown. They should be expressed in US dollars or Indian rupees. Quotes to government purchasing agencies should be both FOB and CIF.

Payment is normally by irrevocable letter of credit. For government contracts, terms of 90 days or more are usually requested.

Documentary requirements

Commercial invoice

No prescribed form listed. A minimum of four copies is required, and must be signed by the supplier in exporting country. The invoice must show details such as:

• Country of origin
• Consignee's name
• The number and date of letter of credit and import licence number
• Terms of payment
• Name of carrier
• Number
• Description and identifying marks of outer containers

Detailed description of the goods including quantity, weight (gross and net), value, shipping charges and insurance.

Insurance

Normal commercial practice.

Bill of lading

Minimum of two copies normally required. To Order bills are also acceptable.

Freight charges must be stated separately.

Quantities must be indicated in metric terms.

Import reference number and letter of credit number are to be shown.

Must indicate the name and address of the applicant and the issuing bank.

Packing list

Not compulsory, but facilitates clearance.

Certificate of origin

Issued by local Chamber of Commerce (three copies normally required).

Public health requirements

Live animals, plants, and parts of plants must be accompanied by health certificates issued by an approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service (AQIS), Commonwealth Department of Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture, and must be certified by an approved authority.

Plants may be imported only through ports where fumigation and inspection facilities are available.

Fruit, vegetables and all foodstuffs are subject to inspection on arrival.

Food quality and purity are subject to strict national and state regulations. The requirements also extend over the use of preservatives, colouring matter, artificial sweeteners, containers and their marking and labelling.

Drugs are subject to stringent controls covering import, manufacture, distribution and sale. Imported drugs require prior sampling and testing. Legal standards used for drugs are the British Pharmacopoeia and the US National Formulary.

Setting up in India

On account of the geographical dispersion of India, It is recommended that Australian firms consider a regional plan, focusing on multiple locations and markets within India and finding the appropriate partners and agents within each region.

Austrade offices in New Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Calcutta provide indispensable local information and advice and are in tune with local businesses.

There are varying options for in-market representation, ranging from appointing agents, distributors to setting up branch/ liaison offices to setting up joint ventures and local subsidiary. Austrade’s offices in New Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Calcutta are well equipped to advice you on your business strategy, market entry strategy, in-market representation in India.

Taxation

India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the urban/rural local bodies. The power to levy taxes and duties is distributed among the three tiers of governments, in accordance with the provisions of the Indian Constitution.

The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), customs duties, Central Excise and Sales Tax and Service Tax.

The principal taxes levied by the State Governments are Sales Tax (tax on intra-state sale of goods), stamp duty (duty on transfer of property), state excise (duty on manufacture of alcohol), land revenue (levy on land used for agricultural/non-agricultural purposes), duty on entertainment and tax on professions and callings. The local bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the local bodies), tax on markets and tax/user charges for utilities like water supply, drainage, etc.

Information on states Sales Tax and VAT is available at http://india.gov.in/citizen/salestax.php

Excise duties are levied on a wide range of items manufactured in India. On imported goods this is known as countervailing duty. Information on Excise duties are available at www.cbec.gov.in/excise/cx-tariff0708/cxt0708-idx.htm

Banking and finance

India has an extensive banking network. The banking system has three tiers:

• The scheduled commercial banks
• The regional rural banks, which operate in rural areas, not covered by the scheduled banks
• The cooperative and special purpose rural banks

The Reserve Bank of India is the central banking institution. It is the supervisory body for banking operations in India. It supervises and administers exchange control and banking regulations, and administers the government's monetary policy.

Indian banking financial statements conforms to internationally recognised standards, but, in some cases, are modified to suit Indian conditions.