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I tried starting a manufacturing unit in India (2020)

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Re: I tried starting a manufacturing unit in India (2020)

#371

Post by vishnugupta »

dr_dshiv wrote: post #231
grepfru_it wrote: post #226

Earlier quoted context omitted.

When I visited a Cisco office in India, I noticed there was a prominent notice of business application and listed the Indian owner of the company. I thought that was interesting and went digging into India law about ownership. When I came out of that rabbit hole I immediately had zero interest in starting up in India. Simply because of the bureaucracy and would be way more wink-wink-$$$-nudge-nudge than what I'm even…

Well, I expected this article to be about bribes, because I assume it happens a lot. However, there were no bribes. Does anyone have actual experience with bribes in India (not traffic police)? Edit: sorry, one person openly asked for a bribe, the Panchayat. I would like to understand more about this. Do they just ask for an amount?

House/plot registration is a common place where most folks encounter bribe. The person/company selling you the house/plot will ask you to bring INR 15-20K in cash to the registrar office. It'll be paid to an agent who is a conduit.

Driving license is another. You'll see tens of touts in and around the govt office; you pay about INR 2-3K and get your drivers' license. Again, a tout/agent will handle it for you end to end.

Both are very well oiled machine; money goes all the way up to politicians. Getting a posting in those offices in turn requires millions of rupees of bribe, besides influence, caste angle etc.,

Speaking from personal experience.

Re: I tried starting a manufacturing unit in India (2020)

#372

Post by sooyoo »

ltbarcly3 wrote: post #280
sooyoo wrote: post #85

Earlier quoted context omitted.

> Fine, so be it. Pay the bribes and get to work Since most people think like that, things don't change and everybody is miserable. Cudos to the author for not accepting this rampant corruption. > If you are trying to save money, fine If that's really what you think the authors motivation is then you may have missed the point of the article.

The author doesn't get his permit stamped and obviously currently has no influence. He'll probably give up, and now the jobs he would have created and imports that would have become local production won't happen. It's not an obvious good vs bad situation here, a corrupt system that allows bribes is gross, but pretending you can just act like you are in a western country with rule of law is ignoring reality.

You got it upside down. Exactly because too many people think like that, this whole corrupt system works. Imagine the whole country refusing to pay bribes. They would disappear tomorrow.

This whole "but this single action won't change anything " attitude may feel rational, and even be (selfishly) rational, but the effect comes through the aggregate. Lots of people in society behaving like that, and you get emergent properties caused by the aggregate of those individual choices. A dangerous (and pretty selfish) path to go in societies.

Re: I tried starting a manufacturing unit in India (2020)

#373

Post by TheRealPomax »

yrgulation wrote: post #359
TheRealPomax wrote: post #353

Earlier quoted context omitted.

think again because "there's no bribes in the balkan" (rural cops in the balkan will pull you over for literally nothing just to make you pay them to go away again) or "it's so much worse than the balkan" (I won't argue that one, it really is)

The latter. It may be bad in the balkans, which it is, but nowhere near as bad as in other places. Either way both regions will improve. If anything, i’d invest now even if i wouldnt be able to exploit that investment. Nationalism aside i think india has a bright future. The balkans will end up in the eu as well if the eu doesnt break up. Worth investing there too.

Investing and "opening a business" are two very different things though. I'd definitely invest in India (BRIC is about to loose China, but the rest are still improving year over year at a rate that looks sustainable), but I'm not mad enough to try to actually open a physical business there. It's kind of a well-known bureaucratic black hole in economics circles. The best you can hope for is to buy an existing company (whether that's outright buying, or "buying" through some contractual subsidiary/merger/etc. arrangement)

Re: I tried starting a manufacturing unit in India (2020)

#374

Post by daniel-cussen »

klausjensen wrote: post #109

~5 years ago, I hired three Indian developers. They asked me if we could set up an Indian legal entity, so that they could just get regular salaries in India with tax payments, deductions etc taken care of. I agreed and we got it done. One of the worst business-decisions of my life. The amount of red tape, stupid rules, corruption, signatures, stamps, showing up physically in a certain office etc etc... Mindblowing.…

No post body was provided.

Re: I tried starting a manufacturing unit in India (2020)

#375

Post by thunkshift1 »

boole1854 wrote: post #326
thunkshift1 wrote: post #291

This is not an honest take on ‘ease of doing business in india’. What the author is trying to do is re-purpose his agricultural land for non agricultural use. For various socio-political reasons this is big no-no in many states in India and is known to be a very long winding and drawn out process because the govt does not want agricultural land to be re-purposed. I expected something along the lines of ‘I tried to se…

> Author probably tried to pull a fast one onthe govt. In what sense is the author trying to pull a fast one? They own agricultural land. It is legal to convert agricultural-use land to non-agricultural-use land. There is a legal procedure for doing so. The author is trying to follow the procedure. The procedure turns out to be very difficult, and they publicize this fact. Where is the 'fast one' being pulled and who…

Why dont you try building a residential property or factory on a land zoned for public parks and tell me how that goes in your country?

Re: I tried starting a manufacturing unit in India (2020)

#376

Post by primitivesuave »

tkk23 wrote: post #274
primitivesuave wrote: post #156

Earlier quoted context omitted.

I came to the comments to warn exactly this, perhaps more emphatically. Do not set up a legal entity in India. It will become a never-ending void where money and time go to die. The bureaucracy is hilariously inept and bloated, and if you are not willing to pay the bribes or for some entity to navigate the systemic corruption on your behalf, you will end up in OP's situation. Source: hired many Indian developers in r…

India is huge. Could there be a district with enough integrity that it can become the place to establish a company in India?

I highly doubt it. Bribery is baked into the culture. Everyone takes bribes, and the act of solicitation does not have the negative connotations or legal ramifications that it would have elsewhere. Most Indian people who pay regular bribes are on friendly terms with the people they pay bribes to.

Also, political parties are mostly funded by bribery, and rely on literally buying the votes of villagers to maintain power. Any political entity with the power to actually tackle corruption would have little incentive to do so.

Re: I tried starting a manufacturing unit in India (2020)

#377

Post by overstay »

hef19898 wrote: post #204
ryandrake wrote: post #102

Earlier quoted context omitted.

Reminds me of a surreal example[1] of Indian bureaucracy from Jim Rogers’ Adventure Capitalist : Rogers and his wife had left India's State of Manipur and were safely across the border in Myanmar. But wait, here comes an Indian official running after them, who says that they can't leave, because, they didn't have permission to be in Manipur. "He was telling us — I am not making this up — that we had to return to Mani…

India is the only place I ever travelled to, that controlled visas upon leaving the country. Like what, you are at the airport, behind security, with a ticket back to Germany in hand, with a German passport, and now they have doubts about the visas you got from the Indian consulate? What are they going to do, hold you up and send you back on a flight paid for by the Indian government or what? Really crazy. Overall, k…

This is not that unusual. It happens to me every time I forget to hand over my Dutch residence permit with my (non-EU) passport when leaving the Schengen zone from Schiphol. The border guards are absolutely meticulous about flipping through the passport looking at the entry and exit dates in the hopes of catching a potential overstayer. They're almost always super disappointed when I realize what's happening and hand over the card.

The threat isn't "we're going to keep you here because you weren't allowed to be here," it's "we see you have overstayed your visa and now we're going to make sure you catch your flight out and ban you from ever coming back."

Re: I tried starting a manufacturing unit in India (2020)

#378

Post by j45 »

klausjensen wrote: post #109

~5 years ago, I hired three Indian developers. They asked me if we could set up an Indian legal entity, so that they could just get regular salaries in India with tax payments, deductions etc taken care of. I agreed and we got it done. One of the worst business-decisions of my life. The amount of red tape, stupid rules, corruption, signatures, stamps, showing up physically in a certain office etc etc... Mindblowing.…

I’ve heard some countries don’t have the same level of rule of law (and corruption instead) as anticipated.

Re: I tried starting a manufacturing unit in India (2020)

#379

Post by yrgulation »

TheRealPomax wrote: post #373
yrgulation wrote: post #359

Earlier quoted context omitted.

The latter. It may be bad in the balkans, which it is, but nowhere near as bad as in other places. Either way both regions will improve. If anything, i’d invest now even if i wouldnt be able to exploit that investment. Nationalism aside i think india has a bright future. The balkans will end up in the eu as well if the eu doesnt break up. Worth investing there too.

Investing and "opening a business" are two very different things though. I'd definitely invest in India (BRIC is about to loose China, but the rest are still improving year over year at a rate that looks sustainable), but I'm not mad enough to try to actually open a physical business there. It's kind of a well-known bureaucratic black hole in economics circles. The best you can hope for is to buy an existing company…

Do you even need to open business? I’d just buy land near promising areas, say near where motorways are likely to be built, or regions with tourist potential (ie tall mountains, as snow will be at a premium in the future, thermal water reserves, agricultural potential, etc). That in itself can be good business. Buy it and leave it there for a while. Unlike china, india will indeed take a different trajectory - if it doesnt go down the route of petty nationalism. Similarly, i’d invest in real estate in the balkan region or moldavia should it join the eu. I know in some countries once they joined the eu they 10x’d.

Re: I tried starting a manufacturing unit in India (2020)

#380

Post by bluGill »

bombcar wrote: post #349
nabusman wrote: post #331

Earlier quoted context omitted.

IME the bribes are often not asked directly but instead the people in the office throw up insurmountable obstacles so that you initiate the conversation of bribes. I don't know why they do this, maybe because it puts them in a better negotiating position?

Soliciting a bribe is probably illegal. But accepting a gift to do your actual job, how could that be illegal, hmmmm?

If you go first you are offering a bribe. If the police are investigating offering a bribe is entrapment and your lawyer will run with that in court.

In short it is a way to avoid getting caught.

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