International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
or representative office. A liaison office is not allowed to undertake any
business activity in India and therefore cannot earn any income in India. The
role of such office is thus limited to collecting information about possible
market opportunities and providing information about the company and its
products to prospective Indian customers.
The Foreign Investment Promotion Board of the Reserve Bank of
India is a regulatory body governing such operations. Foreign investors are
required to follow the basic procedures prior to opening such offices.
Permission is initially granted for a period of three years, and may be
extended from time to time.
Project Office
Foreign companies planning to execute specific projects in Indian can set up
temporary project/site offices for the purpose. Specific approval from the
RBI is required for setting up a project office, which is generally given for
Government approved projects, but the RBI can give approval for setting up
project offices even for executing private sector projects. Approval for
setting up project offices is specific to a particular project that is to be
executed and lasts only till the completion of the project.
Branch Office
The Government has allowed foreign companies engaged in manufacturing
and trading activities abroad to set up branch offices in India for the
following purposes:-
1. To represent the parent company/other foreign companies in various
matters in India e.g. acting as buying/selling agents in India.
2. To conduct research work in the area in which the parent company is
engaged, provided the results to the research work are made available to
the Indian companies.
3. To undertake export and import trading activities.
4. To promote possible technical and financial collaborations between the
Indian companies and the overseas companies. A branch office is not
allowed to carry out manufacturing activities on its own but is permitted
to subcontract them to an Indian manufacturer.
Only for Private Circulation