The US-India Aviation Cooperation Partnership Conference in Delhi

 

I just returned from coordinating the Air Traffic Flow Management Seminar for the Aviation Cooperation Partnership in Delhi.  I’m happy to say that the folks at USTDA, which sponsored the conference, were happy with the whole event.  

 

A good bit of credit for the smooth functioning of the event has to go to the fabulous people at the Oberoi New Delhi Hotel.   We had our challenges, but due to an all-nighter pulled by the IT guys, quick thinking by the catering crew and the diligent attention of the duty managers – nobody noticed!

 

The jet lag was also a lot easier to deal with because the Oberoi opened the gym early just for me.  There was never any temptation to sleep-in knowing that the kitchen had egg dosas on the griddle!  And the overnight print job of 100 conference books was no sweat after a little time in the sauna.

 

So the logistics never got in the way of the presenters which helped educate the Indian audience of government and industry on the policy issues, technical matters and air safety of having state-of-the-art air traffic flow management systems. 

WBJ Article!

The Washington Business Journal just published an interview of me at: http://washington.bizjournals.com/washington/stories/2008/09/01/story10.html

As a laywer my relationship with the media was always a little skeptical, but as a business owner I’m learning to leverage the exposure mass media can provide. I’m happy to say the process of being interviewed by the Washington Business Journal was a positive one. The author of the article Lindsey Smith was rather thorough and professional. I did learn that the interview doesn’t end at the “interview”. A few quotes in the article were comments I made during the photo shoot!!

wbj-article_09081

Negotiating Indian Style

Last week, a prospective client called trying to understand why a deal with his first Indian customer fell apart. He was a bit frustrated since he spent over 4 months in negotiations. He felt comfortable doing business in India because the standard business language is English, but he didn’t anticipate a big disconnect in the business culture.
He felt frustrated when issues continually resurfaced after they had already come to agreement, when his counterparts repeatedly answered phone calls in the middle of their discussions, and when deadlines were completely disregarded.
Belatedly, he wanted to know who were the real decision-makers in his scenario, what it meant when someone said a quick succession of “heh-heh-heh” with ear-to-shoulder nodding, and whether the deal was doomed from the very beginning.
I explained, in India as in many parts of the world, “yes” doesn’t always mean consent. It’s impolite to say “no”. So while he was loosing trust when issues kept resurfacing, in his counterparts mind the matter was never settled. Once he started loosing trust, he became offended when cell phones weren’t turned off during his meetings. Some of his insult was lessened when I told him this wasn’t so uncommon in India since voice mail isn’t commonly used. And when I enlightened him about the sense of time in India being much more lax, he started to realize he may have misread certain situations.
I went on to describe that the decision-maker is almost always the guy at the top who sends orders down. The opinion of subordinates isn’t necessarily relied upon. The “heh-heh-heh” translates into: I understand, let’s move on.
It took a while for him to accept that the sense of time for negotiations in India is different than in the US. Relationship building is key early on; the early stages are good for understanding how decisions will be made. In the client’s case, the company was a family-owned business, and the decision likely was being discussed with other family members. The client hadn’t made any effort to engage the other members.
The phone call ended with him wishing he had educated himself before investing a considerable amount of time and a handful of long-flights to India.

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A Rose by Another Name: the Indo-US Nuclear Civil Agreement

With the US-Indo past, which is only just now starting to get better, why on earth was the agreement titled this way? US-Indo relations haven’t been great; it’s been fraught with lots of mistrust and misunderstandings.

How well would a US-China Outsourcing Agreement be received in the US?

“US-Indo” right off the bat raises some hesitation. Why throw in the hot-button word “Nuclear” and now you’ve got a deal that has a knee-jerk negative reaction.

I can’t help but wonder how this agreement might have been received if the title had a positive connotation for the Indian people and politicians – something as simple as the International Energy Agreement.

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The End of the Maryland India Center: how to set up an Indian subsidiary

Happy Day!

Today I received permission to repatriate funds held by my Indian office. A little over a year after terminating the Maryland India Center’s lease (representing the closing down of the State of Maryland Trade Office in Bangalore), I’m near the final stages of winding down the entity. The Maryland India Center was the entity I formed to contract with the State of Maryland’s Department of Business and Economic Development.

The Liaison Office was rather time consuming to set-up, it took over 8 months and 5 visits in 3 different cities to receive Reserve Bank of India approval to open the office and a corporate bank account. There is no question in my mind that the Liaison Office was worth the wait because the closing down of it is easier than most other types of entities you can set up in India.

I’m frequently asked about how to start-up an entity in India. I always recommend starting with the end in mind. Plan for the ideal exit strategy as well as a range of foreseeable exit strategies.

Below highlights some of the more common types of subsidiaries a foreign entity can establish in India. All are regulated by the Companies Act, 1956.

PUBLIC LIMITED CORPORATIONS
o Right to transfer shares is restricted
o Maximum number of shareholders limited to 50
o No offer of shares or debentures can be made to the public
o Limited liability can be based on shares or guarantee.
o By shares, the personal liability is limited to the amount unpaid on their shares
o By guarantee, the personal liability is limited by a pre-decided nominated amount.
o Taxable business entity

LIAISON OFFICE
o Subject to approval from the Reserve Bank of India
o Objectives are usually to promote business in India by spreading awareness of company and
exploring opportunities for setting up a more permanent office
o No commission or fee of any other renumeration can be charged by the Liaison Office by the
foreign entity
o Liaison Office cannot undertake any trading, commercial or industrial nature
o All expenses of the Liaison Office should be met by remittances from abroad
o Liaison Office must submit an audit certificate annually to the Reserve Bank of India

BRANCH OFFICE
o Specific approval of Reserve Bank of India is required
o Branch Offices, subject to Reserve Bank of India approval, may engage in the following types
of activities:
Export/import goods
Offer professional or consultancy services
Carry out research
Represent the parent company, including as buyer/seller, in India
Render technical support for products supplied by parent company
Undertake activities of foreign airlines/shipping companies
Manufacture goods if located in a Special Economic Zone
o Taxable by Indian government
o Post-tax profits and surplus funds are repatriable
o Can acquire immovable property for RBI approved activities

PROJECT OFFICE
o A foreign entity can establish a project office in India without prior Reserve Bank of India
approval if it has secured a contract from an Indian company to execute a project in India
o A prescribed report must be filed with the Reserve Bank of India
o Tax treatment similar to a Branch Office

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