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11 January 2021Investment business in India: features of international legal support
Business in India for Russian companies is one of the most profitable and promising areas of international cooperation. The Indian economy ranks 6th in the world in terms of nominal GDP, and has already reached 3rd place in terms of purchasing power parity. The construction sector has a huge potential, and firstly, we are talking about the construction of large shopping and entertainment facilities, hotel complexes and industrial enterprises. However, finding a business partner is not enough successfully to do business in India. What are the difficulties and peculiarities of cooperation with Indian businesspartners, says lawyer Dmitry Gorbunov (Managing Partner of Tendaudit Law Firm), who provided legal support for the development of the architectural concept of the Rococco Retreat hotel complex on Goa. Specifics of doing business in India Foreign companies that enter the Indian market do not take into account the strong caste traditions, religious heterogeneity of the population, and the strength of the maharajas' clans. It is imperative to understand which political, economic and social "centers of power" your business partners belong to, because there is strong competition between various such centers in all areas. In addition, if you do not analyze to which dynastic elite this or that company belongs, which plans to be involved as a local partner, then you may face with serious difficulties in the implementation of the project. According to Dmitry Gorbunov, a specialist who provides legal support for investment projects in India, it is not enough to know local laws and be able to draw up documents so that they accurately convey the meaning in both English and Russian. A lawyer must still have an excellent understanding of the peculiarities of the social and religious way of life, the political structure and the peculiarities of the electoral system. For example, you work with a company whose head is a Hindu, and if you hire a company with Muslim leaders as a contractor, the project may simply be thwarted, especially if there is a strong tension between representatives of these two religions in a particular state. Moreover, these are just some of the aspects to be considered. However, there is also the main work, which includes: Working out the probabilities of litigation. Where should they take place: in Russia or India? The best option is to engage a third party, since international arbitration will allow the interests of all parties to be met and reduce corruption risks. Development of an investment agreement, which includes participation in negotiations. Resolving issues related to the acquisition of a land plot, including the preparation of contracts for geodetic and environmental surveys. Verification of counterparties and legal control of their activities, the conclusion of supply and work contracts, etc. It is practically impossible to implement successfully an international project without help of professional lawyers, since knowledge of international legislation, the mentality of foreign partners is required, and it is quite necessary to prepare and check all documents for their compliance with the legislation of the two partner countries. In cooperation with Indian companies, one should not rush a thorough elaboration of a roadmap for the fulfillment of obligations, study of the specifics of the region where the investment project plans, including negotiations with local public, religious and non-profit organizations, is necessary. It is only under such conditions that our projects can be successfully implemented.