India Analysis

India

India, officially the Republic of India is a country which located in South Asia; it is the seventh-largest country by geographic area with 1.2 billion people.

PEST analysis in India

1. P: Political and Legal Environment

India is the world largest Democratic Republic with a Parliamentary form of Government and its constitution supported the trinity of justice, liberty and equality for all the citizens. However, it unlike the American political system and British political system because the Indian political system is a much more recent construct dating from India’s independence from Britain in1947.

For India’s legal, rule of law is quite strong in India, which has an effective legal system based on common law. However, the backlog of cases in the courts can cause delays and challenges for U.S. companies doing business in India and also because the Indian government controls inbound investments, local legal advice is helpful when researching investment options and how best to establish a business presence in India and there are many Indian law firms that are well equipped to serve multinational and foreign companies, and which offer the full range of legal and tax services.

• Taxation policy:

India has a well developed tax structure with a three- tier federal structure, comprising

the Union Government, the State Governments and the Urban & Rural Local Bodies. The power to levy taxes and duties are distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales, Stamp Duty, State Excise, Land Revenue, and Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties, Octroi Tax on Markets and Tax/User Charges for utilities like water...