Sam-il PwC Hosts Seminar
Over 200 Attendees Including Domestic and International India Business Experts
"Growth Potential Exists but Understanding Local Environment and Risk Management Needed"
The Indian market, which emerged as a rising power with an economic growth rate exceeding 7% last year, is attracting attention. India’s strengths lie in its vast domestic market and young workforce, but it also faces high entry barriers such as protectionist trade policies and complex tax systems. Therefore, when investing in or entering the Indian market, it is essential to develop strategies that minimize risks by thoroughly understanding the local culture and business environment.
On the 28th, Samil PwC announced on the 29th that it held an 'India Investment and Market Entry Strategy Seminar' at Amore Hall on the 2nd floor of its headquarters in Yongsan-gu, Seoul. This seminar was organized for Samil PwC’s India business experts to share strategies and considerations for entering the Indian market with corporate participants. About 200 corporate representatives attended the seminar.
In his opening remarks, Lee Jung-hyun, Head of Tax at Samil PwC, said, “The rapidly growing Indian market is attractive and has great growth potential, but success requires careful consideration of its unique business and regulatory environment.” He added, “We hope this seminar serves as an opportunity to review the current status of the Indian market and share expert strategies.”
In the first session, Sandeep Ladda, Partner at PwC India, gave a lecture on ‘India’s Investment Environment and Regulatory Updates.’ Partner Ladda noted, “More than half of the working-age population is young labor driving growth in the digital sector,” highlighting the automotive, information technology, and telecommunications markets as promising industries and new investment destinations.
In particular, sectors such as aviation, insurance, renewable energy, and defense were mentioned as areas expected to see significant foreign direct investment (FDI) in the future. Partner Ladda forecasted, “Not only the manufacturing promotion policy ‘Make in India’ but also free trade agreements (FTAs) with major countries will continue to increase the scale of direct foreign investment.”
In the second session, Yoon Doo-oh, Director at PwC Consulting, spoke on ‘Understanding the Indian Market and Entry Strategies.’ According to him, the Indian market is gaining attention as an alternative to China based on its ▲political stability, ▲vast domestic market, and ▲abundant young workforce. On the other hand, ▲poor production infrastructure, ▲protectionist trade barriers, and ▲complex tax and legal systems are cited as high entry barriers.
Director Yoon evaluated, “The Indian market is complex, with many global companies having entered and highly skilled local companies present across all industries. It is a market where a low-cost labor force coexists with a middle class that has high consumption levels.” He also shared successful cases of global companies entering the Indian market. For example, Starbucks expanded its stores in India by developing low-cost, locally tailored menus, while Apple was able to optimize production costs through negotiations with both central and local governments.
The third presenter, Kang Dae-ho, Partner at Samil PwC, explained ‘The Current Status of Mergers and Acquisitions (M&A) in India and Considerations When Acquiring Indian Companies.’ Partner Kang said, “Although the growth of India’s M&A market slowed somewhat after 2023 due to global macroeconomic factors such as interest rate hikes, market recovery is expected this year,” and predicted “an increase in mid-sized M&A deals centered on the energy, finance, manufacturing, and information technology (IT) sectors.” The industrial and manufacturing sectors, in particular, have attracted growing interest as alternative investment destinations following the US-China trade conflict.
For domestic companies, while entry was previously made through establishing local subsidiaries, recently there has been an increasing trend of entering the market through M&A. A representative case is CJ Logistics’ acquisition of the local company Darcl. Partner Kang advised, “Many Indian companies have shareholders composed of families, so transactions can be difficult if shareholder agreements are not reached. It is important to understand the local negotiation culture, where written agreements are more important than verbal ones, and to proceed with transactions with the help of local experts.”
In the fourth session, Jung Ki-wook, Partner at Samil PwC, lectured on ‘Understanding India’s Initial Public Offering (IPO) System.’ Partner Jung explained that the recent boom in the Indian stock market and the revival of IPOs by large companies are mainly due to the benefits from de-China strategies and the maturation of capital and domestic markets.
Partner Jung also cited examples of Indian subsidiaries of domestic companies attempting to list on the Indian stock market and advised that when conducting due diligence for an Indian IPO, it is important to carefully review the company’s financial results, risk factors, and potential conflicts of interest among related parties.
In the fifth session, Partner Park In-dae presented on ‘India Investment Incentives and Tax Response Strategies.’ Partner Park explained the policies and incentives provided by the central and state governments for investments in India. He said, “State government incentives are provided mainly in the form of subsidies on investment amounts,” and added that incentives tend to be higher in areas with poor infrastructure, but investment locations should be selected considering other investment environments and sites. He also discussed tax risks and countermeasures to consider when investing in India, noting, “Because India’s tax system is complex, it is necessary to study ways to reduce tax leakage.”
In the sixth session, Director Kim Hyun-jun explained ‘Trends in Indian Customs and Key Points for Management,’ addressing customs issues that domestic companies often inquire about when trading with India. Director Kim said, “India’s customs rates change frequently, making predictability low, and interpretations tend to be arbitrary, resulting in a lack of consistency,” and emphasized the need to carefully examine systems that lower basic customs rates introduced as trade promotion measures. He also explained key considerations for customs management, such as transfer pricing and HS Codes that determine customs rates.
Finally, in the Q&A session, India experts from Samil PwC and local PwC India answered pre-submitted questions. Questions covered promising sectors for Korean companies, precautions when investing in joint ventures (JVs) with Indian companies, differences between Korean and Indian audit and internal accounting control systems, and strategies for domestic companies to respond to Indian tax authorities.
When asked why tax litigation is frequent in India, Partner Park In-dae responded, “India is known as a tax litigation haven because tax authorities rarely settle during audits and issue notices of objection to taxpayers. Also, since cases can take a long time to reach the Supreme Court, it is necessary to approach tax litigation with flexibility.”
Meanwhile, Samil PwC’s India Business Center operates as a one team with PwC India, providing advisory services and support to help Korean companies successfully enter and invest in India and achieve business success.
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