The risks and uncertainties of investing in India continue to take centre stage
According to Amazon.com, which launched its India marketplace in June 2013 and finds itself in a dog-fight with home-grown rivals, its investments in India involve “unique risks”. The company recently told the US Securities and Exchange Commission that there are “substantial uncertainties” regarding the interpretation of Indian laws and regulations, and that as a result, while it believes the structures it has set up in India and its activities in the country comply with existing laws, “it is possible that the government will ultimately take a view contrary to ours”.
While it may not be necessary to read too much into such statements, the fact that Amazon.com is willing to take on these “risks” speaks volumes for the promise and potential of India. Amazon’s concerns should also come as a wake-up call to policy makers charged with revitalizing foreign investment. For uncertainties in laws and regulations have long been a deterrent to would-be investors and removing this unnecessary shackle would give India a much-needed boost as it strives to revive economic growth.
The laws and regulations governing foreign direct investment are not the only ones to be plagued by uncertainties. As this month’s Cover story illustrates, India’s intellectual property (IP) regime suffers from exactly the same problem.
Partly in response to this, the government has announced plans to formulate a liberal and comprehensive new IP policy and to establish a think-tank of experts to keep it appraised of the latest IP issues affecting the country. But what should be the focus of such a policy?
To find out, India Business Law Journal canvassed the views of eight prominent in-house lawyers. Their insights make interesting reading. Dev Bajpai, the executive director, legal, and company secretary at Hindustan Unilever, says the new policy should focus on “exponentially promoting knowledge and understanding from an early stage”, while S Ramaswamy, the executive vice-president and group general counsel at Escorts, believes the most important issues to be addressed are modernizing India’s IP offices, reducing the time it takes for the granting of approvals and increasing the number of patent examiners. These are tall orders and only time will tell whether the government’s new initiative will be enough to achieve them.
Still on the subject of intellectual property, in Turf wars we analyse attempts by India’s competition regulator to curtail the abuse of dominance stemming from IP rights. Conflicts between competition policy and intellectual property law are nothing new, and there has frequently been ambiguity over the boundaries of jurisdiction of the courts and the competition regulator. However, as our coverage details, a recent order by the Competition Commission of India in a dispute centring on the licensing of music may provide some much-needed clarity as to how its powers are distinct from those of the courts.
In From campus to career we turn the spotlight on non-traditional players in the education sector that help some of India’s law graduates make the leap from law school to the legal profession. India’s law schools are often accused of churning out graduates without the necessary skills – or the commercial acumen – that are required for modern legal practice, and our coverage investigates the role that other organizations in playing in bridging this gap.
In this month’s Vantage point Abhijit Mukhopadhyay, the legal head of the Hinduja Group in London, discusses the challenges faced by Indian family-run businesses as they strive to reinvent themselves as professional, forward-looking companies. Mukhopadhyay notes that while many such companies have hired professional managers to take over the day-to-day running of the business, the managers are all-too-often hamstrung by family members who are unwilling to relinquish control. His advice: “Respect and trust the professionals you hire and they will ultimately respect you and treat your business as their own”.
In Trade tonic we explore how regulatory changes in some Latin American countries may be a shot in the arm for pharmaceutical trade with India. Similar gains could also be on the cards for other sectors of the Indian economy, but enthusiasm is being tempered by events in Argentina and elsewhere that could result in the region distancing itself from some of its trading partners, including India.
This month’s Intelligence report presents India Business Law Journal’s annual Legal Processing Outsourcing Awards. A lot has changed since 2009, when we began these awards, and today the key players are keen showcase their technology enabled solutions rather than the labour arbitrage that they boasted of in years gone by.
The winner of the coveted LPO of the Year award is UnitedLex, which has lifted its profile over the past year. Four other service providers join UnitedLex to win recognition as Best Overall LPOs. They are: Integreon, Mindcrest, Pangea3 and Quislex. All have operations in India and continue to dominate the market.
While alternative legal service providers have triggered a rewriting of the rules of the legal services market, this is just the beginning and many more changes can be expected. We look forward to covering and analysing developments over the months and years ahead.