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I tried starting a manufacturing unit in India (2020)

superr.in

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

#421

Earlier quoted context omitted.

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…

Thailand checks on exit for overstay requiring you to pay overstay fines on the spot in cash. Ostensibly to stop illegal workers, because the best way to stop that is apparently done by the immigration department, by making work visas hard to qualify for and a bureaucratic nightmare to actually get, and checking tourist visas on exit after the illegal work has been done and enough money to cover the fines earned. Because the Labor department has no enforcement force.

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

#422

Earlier quoted context omitted.

In India they optimize for maximum employment. It's the only place I've seen 7 people needed to refill a soda vending machine. Once I ordered some drinks brought up to my hotel room around 10 in the evening. It took forever - turned out the guy who made the drinks was sent home for the day. So the hotel called him back and had him return just so he could come and make the drinks and bring them to my room. Because tha…

Weird question: Did you feel embarassed when you learned driver was sleeping in the car? I would be. You: Sleeping in a 5 star. Them: In an uncomfortable car seat. When I traveled to Seam Reap, Cambodia, I was constantly embarassed when my driver did not come to eat with me. It was a weird, unpleasant peasant-ruler divide that I did not enjoy.

I was attending a wedding and everything was arranged for me so i just 'arrived' as a white westerener. Yes it was strange, and it exposed me to something I had never before experienced or imagined. Wherever I went they would yell 'gora' meaning white man. Some even wanted to take my picture.

However, Amritsar is famous for the golden temple which is the the holiest of all Sikh shrines. They said it was most beautiful to view at night. So we went there late at night parking closeby , walking there there we passed by the rickshaw drivers sleeping in their rickshaws as far as i could gather they had no other place to sleep. So they had it even worse.

Not to mention the child beggars of New delhi or the makeshift camps you saw driving along the highway.

All of this was approx 10 years ago.

It for sure opened my eye to the destitute and poverty.

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

#423
post #242

Earlier quoted context omitted.

My read is that the OP understands this but is ideologically opposed to paying bribes. Ex: "Obviously, they are playing 'hard to get' to get me to pay some bribe and initiate the process" and "So the Gram Panchayat NOC is stuck because of non payment of bribe".

You have a choice. Try to do business in India and pay bribes or move your business elsewhere. There are countries of which India is one of them where you can't do any serious business without paying bribes. Serious business is anything where a government official even suspects you may have money to pay the bribe. So maybe not a hairdresser, but if you have money to buy a piece of land you are expected to have money…

afaik there are quite heavy laws against paying bribes - in foreign jurisdictions. See https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act - other countries also have quite similar laws to this respect.

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

#424

~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.…

Perhaps they were looking for some under-the-table deal, commonplace in the government offices of the subcontinent, that you failed to realise. Here, you need to may money to get your money back.

No, this was just incompetence/ignorance on the govts part. My local (Indian) company director had full authority to do whatever he thought was needed.

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

#425
post #263

~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.…

> We have sent experts to the relevant tax offices etc, but the ONLY guy who can handle it is never there, refuses to deal with it, then says we need to go somewhere else - where we are sent back etc etc. Sent around in circles, basically - with everybody recognizing the money is in fact owed... That sounds exactly like they're needing a bribe, but you're too rooted in western ways of doing things that you don't real…

I probably would have been, if it had been myself. However, this was my local Indian director, who is very well versed in navigating Indian bureaucracy. They were just ignorant, completely disinterested in helding and wildly incompetent.

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

#426
Reading this, it doesn't seem like starting a manufacturing unit in India is difficult. But starting a manufacturing unit in an AGRICULTURE land meant for farming is difficult.

The difficulty is not the manufacturing plant. It is the conversion of agriculture land to non agriculture land.

I find the title and the conclusion by the author very misleading.

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

#427
This is so true, I started a digital business in 2014 and grew it until 2016. Then I had some personal emergency and slowed down for a bit. Then GST came, and I literally had to "beg" my existing chartered accountant "with folded hands" to take care of my GST filings - even after I would pay him anything he wanted. They were so overloaded with constant changes, bad portal, etc that my small work was "negligible".

Over a period of 5-6 years, I brushed up with so much corruption that it sickens me to the core. I tried approaching the ACB(anti-corruption-bureau), and faced even more harassment. I believe their job is to protect corrupt officers who pay dues to their higher ups. And the supreme leaders are changing rules that are empowering such corrupt officers. If we talk about it to public - we are termed anti-nationals.

I grew up with "real goons and mafia" when I was a kid, but even those guys had better ethics relative to what most govt officers exhibit today.

In India, I used to have mild panic attacks when my mobile rang. I had sleepless nights and my work suffered so much.

I left India with my business just recently and came to UAE (because it was the shortest path). The freedom from stress was so good that I slept like a baby for a few days. (And I am an Hindu for the record). The only worry I have here is higher cost of living which leaves less savings, but I make enough. I have so much invested in India that I want to sell off, but I do not want to go back even for a moment. I have extended family back there, but I don't want to see them.

There are a few things I've realised over the past 20 years, and more so in the past 8 years. I may be wrong - but this is what I think, based on my own experiences:

1. GST is a HUGE RISK to any business in India. There are some businesses that actually benefit from GST - but they deal with "arbitrary ruling risk". Then there are other bureaucratic departments. India's GST was not successful in doing "one-nation-one-tax", but it became successful in bringing multiple levels of corruption and goonism together.

2. All taxation and govt departments are departments of white-collar greedy goons. No matter what people say about part of the system being corrupt. They are all corrupt goons because they work in unison.

3. Corruption in India is not like "some bad fish in water", but it is like a "glass of highly toxic liquid that has contaminated the container". Even if you put in multiple glasses of "clean water", the system stays "toxic" - you basically need to replace the container completely. And that really requires a big breaking change - which people of India will not support.

4. Indian govt officers (even the clerks) think of private Indian citizens as "slaves" and use divide-and-counquer policies. If we think India is a democracy, think again. The supreme "elected" leaders cannot do a lot, because they need them.

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

#428

Earlier quoted context omitted.

Another classic is regulatory capture. Oh that new building code or electrical code just so happens to only be fulfilled by using the latest (patented) product by company X? Well it's the state of the art, we can't build below that standard anymore.

Or union labor. I needed some electrical work on a new house, but there's no electricians available for months. Hanging out with a contractor friend, I mentioned that the state law says "the homeowner OR a licensed electrician", and he reacted like doing it myself meant wiring the house with dead orphans or something. I've done electrical work, I just make more money in software so I'm not licensed, but that is someh…

The rule does make sense from a public safety point, because untrained people can do a lot of mistakes in electrical wiring. If you as the homeowner fuck it up and cause a fire, well that's on your own fault. If a licensed electrician fucks it up, their insurance pays for damages. If Joe Random fucks up their neighbor's electrical wiring, chances are high he has no insurance and now the homeowner is stuck with a burnt-down house.

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

#429

Earlier quoted context omitted.

Jesus. Please no one take that as legal advice. Paying a bribe to get preferential treatment (even if that treatment is just to get the person to do their actual job) is a bribe none the less.

Paying an official to perform their job (perform a "routine governmental action") is a facilitating payment and is an exemption from the prohibitions of the Foreign Corrupt Practices Act. https://www.law.cornell.edu/uscode/text/15/78dd-1 The point with a facilitating payment is that you've done everything that's actually required by law to e.g. get a business license and the official is still giving you the run-aroun…

The problem is, as a foreigner, you may have been misled to think what you're asking for is legal, when in actuality it is not.

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

#430
One of the tricks that the income tax department uses is to "outsource" their work to regular tax payers. Companies are forced to check and see if their vendors are paying their taxes on time! https://cleartax.in/s/gst-vendor-compliance-report

This is an absolutely ridiculous demand to make. This is because of the very complicated way the GST structure works in India.

The systems in India are designed to complicate life for the ordinary person

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