India's rapid growth has given birth to business-friendly areas. First came the business and IT parks, offering modern offices, good connectivity, reliable infrastructure, and leisure centers; and then Special Economic Zones (SEZs), which offer all this plus substantial economic benefits. Weigh up your options carefully before making a decision. Business parks, IT parks, and SEZs were conceived to take pressure off city centers, whose infrastructures were crumbling under the pressure of India's phenomenal economic growth. The IT and business parks are efficient commercial sites that hold tens to hundreds of businesses. They provide a "work-live-play" environment that includes restaurants, gardens, and gyms, 24-hour security and fire protection, solid infrastructure, streamlined telecom networks, and, in some cases, guaranteed electricity-Bangalore IT Park, for instance, has a dedicated power plant. Siting your business in one of these parks can also help to solve the most common HR problem in India: retaining valuable staff. The working environment has become a key consideration for employees who are deciding whether to leave or stay with a company. Business park offices are becoming an essential part of the package for highly qualified staff. SEZs were introduced in 2000 to boost exports.
These zones enjoy the same high quality of working and living spaces as business parks, but they are deemed "foreign territory" by the government to enable them to function almost autonomously. Businesses based within SEZs operate under fewer regulations and have to deal with less bureaucracy than those elsewhere- compliance procedures are simplified and rely largely on self-certification. SEZs also benefit from substantial tax concessions-many of the tariffs and quotas are simply eliminated. In 2008 there were 600 SEZs in various stages of approval; around half are rooted in the IT industry and most are in the southern and western regions of India, with far fewer in the north and east. Some Indian companies-such as Infosys and Wipro-have bought land to develop entire SEZs for their businesses alone. This option is not open to you as a foreign business, but you can lease space from developers before, during, or after a SEZ build. SEZ units may be used for manufacture of goods or provision of services. For all its growth in recent years, India has a growing balance of payments deficit, and government policy is focused on increasing exports. There are now a number of schemes open to international companies that ease the process and carry considerable cost benefits. Agricultural export zones, export incentive schemes, and duty-free Special Economic Zones (SEZs) are all worth investigating if you are exporting from India. The SEZs provide an environment that is already officially "foreign territory," enjoying exemption from customs and excise duties, as well as reductions in taxes and more liberal rules on domestic regulations and investment. If you wish to export from India, you will need to register with the Director General of Foreign Trade and obtain an import-export code number. It is also advisable to register with India's statutory Export Promotion Council and Commodity Boards.
All exports must be inspected for quality prior to shipment, unless the goods being exported bear the Indian Standards Institute mark, although if you are exporting large quantities of goods, you can apply for a license to self-certify their quality. The logistics of exporting are complicated by the fact that India's ports and air-cargo warehouses are chaotic and corruption is rife. A freight-forwarding business may be able to save you time and money. These one-stop-shop services deal directly with sea, air, and overland carriers, and offer tracking and communications regarding the shipment. They undertake customs clearance, export and import tax payments, shipping fee payments, trade documentation, and insurance. Whether you import Indian goods through a broker, have a long-term contract manufacture relationship, or employ Indian workers in a subsidiary company, you will need to understand and constantly monitor your supplier's value chain in order to maintain quality and, if appropriate, brand authenticity. Suppliers may sometimes substitute ineffective or even dangerous ingredients or components, attempt to pass off counterfeit-branded merchandise as authentic, or falsely certify that they have met governmentmandated safety and labeling requirements.
Once your firm's name goes on the package, however, it is you that becomes responsible for any errors or omissions, both legally and in terms of public opinion. HSBC, American Express, Qantas, and Tesco are just a few of the big names to have taken advantage of India's thriving BPO industry. Significant cost savings have been made by locating services such as customer support, telephone and online banking, government record storing, and timetable inquiries in India. In 2007, India's outsourcing industry generated US$33 billion and it is expected to continue growing by broadening the services offered and the types of clients served. Outsourcing is moving up the value chain, adding legal services, hi-tech research, accountancy, medical help, and home or college tuition to the more familiar services. Clients report cost savings of up to 50 percent, but many are drawn to BPO in India for its customer service. In India, BPO typically employs workers who regard it as a highstatus position, in contrast to attitudes in the West.
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