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Rishabh Shroff

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Co-Head and Partner in the Private Client Practice at the Mumbai office of Cyril Amarchand Mangaldas. Rishabh specialises in family constitutions and settlements, trusts, wills and succession planning. He can be reached at rishabh.shroff@cyrilshroff.com

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INDIA SEMICONDUCTOR MOMENT

The Indian semiconductor market is expected to reach USD 55 billion by 2026, more than 60% of which is driven by three industries: smartphones & wearables, automotive components, and computing & data storage.[1] Currently, majority of the demand in the Indian semiconductor market is met by imports. In order to reduce the dependency on imports of semiconductors and to fill the semiconductor supply chain gap caused due to COVID-19 and the strained relations between United States and China, the Government of India has approved the Semicon India Programme with an initial financial outlay of INR 76,000 crore (USD 9.13 billion approx.) for the development of a sustainable semiconductor and display ecosystem in India.[2] While inaugurating the Semicon India 2023, a national-level conference focusing on the semiconductor industry, in Gandhinagar, Gujarat,  PM Modi said that India is becoming a grand conductor for investments in the semiconductor sector.[3]Continue Reading India’s Semiconductor Moment

Opportunities for Foreign Universities in India

INTRODUCTION

Education is one of India’s most rapidly-growing sector, which is expected to be worth approximately USD 225 billion[1] by 2025. Enrolment in higher education institutions that stands at approximately 37.4 million[2] today, is estimated to grow by nearly 38% by the year 2030, with India potentially emerging as the single-largest provider of global talent where one in four graduates in the world could be a product of the Indian higher education system[3]. The Covid-19 pandemic has provided further impetus to this sector by increasing the acceptance of online education and opening fresh e-learning opportunities for national and international educational institutions. The Government of India (“GoI”) has also brought renewed focus on the education sector with the roll-out of the National Education Policy, 2020 (“NEP”), which lays down the future roadmap of education in India.Continue Reading Opportunities for Foreign Universities in India: A Regulatory Overview

Self Regulation - A Gamechanger for Online Fantasy Sport

Innovation and growth, particularly in new age industries and sunrise sectors, is never a uniform or predictable process. Every industry, in its nascent stages of growth, attracts certain players who enter with a long-term vision of sustainability and others who operate with a myopic vision of short-term gains, taking advantage of regulatory arbitrage.

While this creates the need to regulate these sectors, their complex and dynamic nature often require deep industry knowledge and flexibility, which makes conventional, top down, government regulations difficult. Historically, a robust, responsible, transparent, and representative self-regulatory regime has directed the navigation of various sectors in a responsible and consumer friendly manner. This self-regulatory model, for instance, has been implemented successfully across various sectors internationally, as an efficient means of developing best practices and codes and checking bad actors. Some of the examples are the Entertainment Software Rating Board in the United States, which assigns ratings to video games and apps to assist parents in making purchase decisions, the Japan Toy Association for safety marks on toys, the Electricity and Gas Complaints Commission for consumer dispute resolution in New Zealand, the framework for mobile content and payment services between telecommunication companies in Denmark for mobile content and payment services and Confianza Online regulating ecommerce players in Spain.[1]
Continue Reading Self Regulation – A Gamechanger for Online Fantasy Sport

New Significant Beneficial Owner (SBO) rules - Companies Act - Implementation Challenges

India is yet to hit its stride in dealing with Significant Beneficial Owner (SBO) rules introduced by the Companies (Amendment) Act, 2017. The SBO rules have its origin in the recommendations made by the Financial Action Task Force (FATF) to its member countries, to make suitable changes in the national legislation to find out individuals, who ultimately own significant beneficial shareholding in the reporting company. There remains a large degree of uncertainty and confusion around the new norms, and their practical impact, as explored below.

Sections 89(10) and 90 of the Companies Act, 2013 (Act) were introduced on the recommendations of the Company Law Committee (CLC) in its Report dated February 1, 2016. The CLC noted that complex structures and chains of corporate vehicles are used to hide the real owners behind the transactions made using those structures.
Continue Reading New SBO Rules – Implementation Challenges

India Simplifies Foreign Investment Reporting Process Update

On June 7th, 2018, the Reserve Bank of India (RBI) had introduced two new forms (namely Single Master Form and Entity Master Form) vide a circular[1] (RBI Circular), with the aim of simplifying reporting under the Foreign Exchange and Management Act, 1999 (FEMA). Our earlier blog post contained details of the two forms and our in-depth analysis of the same. On June 27th, 2018, RBI released a User Manual for Entity Master – FIRMS[2] (User Manual) which provides detailed instructions and the process for filing the Entity Master Form.
Continue Reading India Simplifies Foreign Investment Reporting Process: Update

Foreign Investment Reporting Process

In alignment with the Indian Government’s continuing efforts to bolster foreign investment and ease of doing business in India, the Reserve Bank of India (RBI) has issued two important circulars in June 2018 with the aim of simplifying reporting under the Foreign Exchange and Management Act, 1999 (FEMA). The circulars are as follows:

Simplifying reporting under FEMA - RBI Circular

Currently all foreign investment transactions are reported in a complicated, disintegrated manner across various platforms/modes. The Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (FEMA 20) provide for exhaustive reporting requirements for any foreign investment in India through 12 different forms[1]. Meeting these requirements had become a cumbersome process for foreign investors as well as Indian entities. Continue Reading India Simplifies Foreign Investment Reporting Process

India finally notifies Cross Border Merger Regulations

Previously, the provisions of the Companies Act, 2013 (Act) governing inbound and outbound mergers, amalgamations or arrangements between Indian companies and foreign companies (Cross Border Mergers) were notified by the Ministry of Corporate Affairs on April 13th, 2017. Subsequently, on April 26th, 2017, the Reserve Bank of India (RBI) issued draft regulations to govern Cross Border Mergers (Draft RBI Regulation).

We had published an earlier blog piece on this, discussing the key highlights of the Draft RBI Regulation, which is available here.

It has been close to a year since the Draft RBI Regulation and on March 20th, 2018, the RBI has finally notified the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (Merger Regulation). This article briefly analyses the key changes brought about in the Merger Regulation and its implications.Continue Reading India finally notifies Cross Border Merger Regulations

Cabinet Approves Major Changes in FDI Policy

On January 10, 2018, the Indian Cabinet gave its approval to a number of major amendments to the Foreign Direct Investment (FDI) Policy of India, to further liberalise and simplify the same. This is to increase the ease of doing business in the country, and continue to attract much needed foreign capital to fuel India’s growth. In this post, we examine the latest amendments and their impact on the crucial sectors involved therein.

Key Reforms

Single Brand Retail Trading (SBRT)

The latest amendment has brought sweeping changes in FDI norms for SBRT, thereby enticing significant foreign brands into India’s promising retail space.

The current FDI Policy on SBRT allows 49% FDI under the automatic route, and FDI beyond that and up to 100% through the Government approval route. Earlier, a sourcing norm was also attached to such an investment. This meant that investors were required to source 30% of the value of goods purchased for their Indian businesses through local sources. Several investors have had to spend a significant amount of time developing good local suppliers as partners and their inability to procure locally proved a major stumbling block in setting up their business in India.Continue Reading Cabinet Approves Major Changes in FDI Policy

The ‘Raja’ & the ‘Praja’ Changing Dynamics in Corporate India

* This piece was first published in the The Economic Times Family Business Forum

Corporate governance has become extremely topical for India Inc. over the last year or so. A few prominent governance and leadership battles contributed to our securities market regulator, SEBI, to convene a senior committee to examine this thorny issue. Interestingly, ‘good’ governance in the Indian context is not a new concept: India had ancient guiding scriptures such as the Arthashastra and the Manusmriti, propounding that the “Raja” (i.e. the King) and his ministers must follow a strict code of discipline which furthers the best interests of their “Praja” (i.e. the subjects). Perhaps history needs to repeat itself.

Today’s competitive and dynamic business environment requires a balanced blend of a sustainable growth model coupled with sound governance. Since the global financial crisis of 2007-2008, Corporate India has accepted this as the “new normal” to survive this period of transition. However, practical reality is far from ideal.

To help fix these governance issues, the Kotak Committee Report on Corporate Governance, released on October 5th, 2017, formed under the chairmanship of Mr. Uday Kotak (“Report”), proposed a slew of far reaching changes, whose impact will be far reaching in the Indian promoter context. This article examines a few changes.Continue Reading The ‘Raja’ & the ‘Praja’: Changing Dynamics in Corporate India

India Makes it into Top 100 in ‘Ease of Doing Business’ Rankings

Three years ago, India’s Prime Minister Mr. Narendra Modi, had expressed his desire to see India amongst the top 50 nations in terms of ease of doing business.

On October 31st, 2017 with the release of the World Bank’s Doing Business Report 2018 (Report), this dream is now racing towards to becoming a reality. After continuous and vigorous legislative overhauling, coupled with regulatory and infrastructural reforms, India surged up 30 places to the 100th rank among 190 countries. The Report lists India as one of the 10 improvers this year. We briefly explore the key reforms which have led to this historic jump in the rankings.

Leaps Across Sectors

The Report is based on how easy it is for companies to do business, and it also takes into account certain regulations based on 10 parameters, which are listed below. India has improved its standing in 6 out of these 10 indicators. These are as follows:Continue Reading India Makes it into Top 100 in ‘Ease of Doing Business’ Rankings