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Advocates & Corporate Legal Consultants |
January 2007 | |
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Trademark & Patent Attorneys |
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This E-Newsletter has been published by India Juris, full service Indian law firm with special expertise in Business, Corporate & IP laws, on requests from clients and associates worldwide with an object to keep them abreast of latest legal & business developments in India. |
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Contents |
| Corporate & Commercial laws |
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* Foreign investment in Infrastructure Companies in Securities Markets |
| * Opening of branches by Foreign Banks in India |
| * Liberalization in Project and Service Exports |
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Intellectual Property laws |
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* Proposed amendment in Trademarks Act |
| Corporate & Commercial laws |
| Foreign investment in Infrastructure Companies in Securities Markets |
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Government of India has allowed foreign investment in Infrastructure Companies in Securities Markets, namely stock exchanges, depositories and clearing corporations, in compliance with SEBI Regulations and subject to the following conditions : (A) Foreign investment upto 49 per cent will be allowed in these companies with a separate Foreign Direct Investment (FDI) cap of 26 per cent and Foreign Institutional Investment (FII) cap of 23 per cent; (B) FDI will be allowed with specific prior approval of FIPB; and (C) FII will be allowed only through purchases in the secondary market. |
| Opening of branches by Foreign Banks in India |
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In India Foreign Banks are allowed to operate through branches only. Foreign Banks need to approach Reserve Bank of India (RBI) for approval / license for setting up their branch in India. Foreign Banks need to bring in minimum capital of USD 25 million, out of which USD 10 million is required at the time of opening of first branch, subsequent USD 10 million at the time of second branch and rest of USD 5 million at the time of third or more branches. RBI may give approval for second branch on the basis of performance of first branch.
Foreign Banks are also allowed to establish their branch in Special Economic Zones (SEZ), as Offshore Banking Unit (OBU). There are various tax and other benefits to OBU's. OBU's are also exempted from maintaining CRR. To know more about regulatory framework of foreign banks in India, please contact us. |
| Liberalization in Project and Service Exports |
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(i) Inter-Project Transfer of Machinery At present, exporters executing turnkey / construction contracts abroad are required to dispose off the equipment, machinery, vehicles, etc., purchased abroad and / or to arrange their import into India after completion of the contracts. In case, the machinery, etc., is to be used for another overseas project, the market value (not less than book value) should be recovered from the project to which equipment / machinery has been transferred. On a review, the stipulation regarding recovery of market value (not less than book value) of the machinery, etc., from the transferee project is withdrawn with immediate effect. Further, exporters may use the machinery / equipment for performing any other contract secured by them in any country subject to the satisfaction of the sponsoring AD Category - I bank(s) / Exim Bank / Working Group. The reporting requirement for transfer of machinery / equipment will continue as hitherto, and would be monitored by the AD Category - I bank(s) / Exim Bank / Working Group. (ii) Inter-Project Transfer of Funds At present, Project / Service exporters, as specified in the PEM, may maintain a single foreign currency account for more than one project being executed in the same country subject to the conditions as may be stipulated by the AD Category - I bank(s) / Exim Bank / Working Group. Further, the facility of temporary inter-project transfer of funds to meet cash flow deficits is available subject to approval from and reporting to the exporter's banker monitoring the project and with condition of re-transfer of the fund to the lending project as soon as possible. It has now been decided that, henceforth, AD Category - I bank(s) / Exim Bank / Working Group may permit exporters to open, maintain and operate one or more foreign currency account/s in a currency/currencies of their choice with inter-project transferability of funds in any currency or country. The Inter-project transfer of funds will be monitored by the AD Category - I bank(s) / Exim Bank / Working Group. 3. Deployment of Temporary Cash Surpluses At present,
Project / Service exporters are required to approach the Reserve Bank for
overseas deployment of their temporary cash surpluses. It has now been
decided that, henceforth, Project / Service exporters may deploy their
temporary cash surpluses, generated outside India, in the following
instruments / products, subject to monitoring by the AD Category - I
bank(s) / Exim Bank / Working Group : |
Intellectual Property Laws |
| Proposed amendment in Trademarks Act |
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The Government of India has proposed certain amendments in the existing Trade Marks Act mainly to deal with the international registration of marks. Now the Indian registrar of Trade Marks will be empowered to take up applications from 71 countries that are part of Madrid Protocol. The registrar will not only be authorized to develop a procedure to deal with international applications, but also give them clearance. The amendments may allow foreign based companies with R & D centers in India to develop and register their Trade Marks. Moreover it also aims at providing better protection to domestic Trade Marks owners in other countries. The Government will embrace web enabled services at a cost of Rs 4.5 crores to ensure that application process may be simplified for both domestic as well as International applications so that applicants would be able to apply online and track the status of their applications. |
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