India Regulatory Brief: OTT, VoIP Regulations Recommended, Tribunals Set for Reduction

OTT, VOIP Regulations Recommended

Last week, the Department of Telecommunications (DoT) released a report on net neutrality that contains recommendations that could impact over-the-top content (OTT) and Voice over Internet Protocol (VoIP) service providers, such as Skype, Viber and WhatsApp. The DoT recommended that the government allow OTT messaging services, text messages sent via the internet, to continue unimpeded, but suggested that VoIP calls, calls made over the internet, should be regulated. Specifically, the DoT has advised the government to regulate domestic VoIP calls.

The domestic telecommunications industry has lobbied the government heavily to amend regulations for internet-based messaging and calls. The domestic telecom industry argues that OTT and VoIP services are able to compete with traditional telecom services unregulated. The DoT report has framed an important regulatory debate for the Telecom Regulatory Authority of India (TRAI), which governs regulations for the industry. However, monitoring and enforcing the DoT’s recommendations across domestic and international OTT and VoIP providers appears unrealistic.

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Government to Reduce Number of Tribunals

The Ministry of Law and Justice will reduce the number of active tribunals in the country from 35 to nine. The planned move is designed to improve the efficiency of the tribunal system, which handles cases that require specialist or technical expertise on matters such as income tax, consumer protection and company laws. In India, a number of the tribunals have overlapping functions, which the government believes has complicated the ease of doing business, increased costs and affected the speed of case resolution.

Media reports citing government sources claim that the Competition Appellate Tribunal, All Inter-state Water Tribunal and Debt Recovery Tribunal are among those that the government will merge with other tribunals. Although the desire to improve the tribunal system is laudable, it remains unclear at this time how reducing the number of tribunals alone will meet this government’s goals.

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Arbitration Act Amendment Deferred

Prime Minister Narendra Modi’s cabinet has decided to defer a plan to amend the Arbitration and Conciliation Act, 1996. However, a senior official quoted in the media claims that the government intends to introduce the highly anticipated amendment during the monsoon session of parliament, which is held between July and September.

Earlier in December 2014, the government considered passing an amendment to the Arbitration and Conciliation Act, 1996 by ordinance, an executive order that has to be renewed. However, that plan failed to materialize. The ordinance was designed to set a time-frame for tribunals, introduce a structural fee-cap for arbitrators and several other measures. Although the ordinance received approval from Modi’s cabinet, the cabinet did not send the ordinance to President Pranab Mukherjee for approval.

India-EU FTA Talks Set for August 28

Officials from India and the EU are set to resume free trade agreement (FTA) talks on August 28 in Delhi. According to media sources, the FTA talks had become hamstrung by bilateral investment treaty and government procurement laws. Negotiations for the FTA, which is entitled the “Broad Based Trade and Investment Agreement” (BTIA), have been on-going since 2007.

The Indian government has actively pursued a number of multilateral trade agreements in recent weeks. Most recently, the Indian government joined the Shanghai Cooperation Organization (SCO), the Eurasian security and trade group, and commenced negotiations with the Eurasian Economic Union (EAEU), the Eurasian trade group, for a FTA. Prior to this, the Indian government committed to the Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Agreement (MVA), which will increase transport options and create strategic trade partnerships.

Managing Your Accounting and Bookkeeping in India
In this issue of India Briefing Magazine, we spotlight three issues that financial management teams for India should monitor. Firstly, we examine the new Indian Accounting Standards (Ind-AS) system, which is expected to be a boon for foreign companies in India. We then highlight common filing dates for most companies with operations in India, and lastly examine procedures and regulations for remitting profits from India.

Taking Advantage of India’s FDI Reforms
In this edition of India Briefing Magazine, we explore important amendments to India’s foreign investment policy and outline various options for business establishment, including the creation of wholly owned subsidiaries in sectors that permit 100 percent foreign direct investment. We additionally explore several taxes that apply to wholly owned subsidiary companies, and provide an outlook for what investors can expect to see in India this year.

An Introduction to Doing Business in India 2015 (Second Edition)
Doing Business in India 2015 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes. We discuss a range of pertinent issues for foreign businesses, including India’s most recent FDI caps and restrictions, the key taxes applicable to foreign companies, how to conduct a successful audit, and the procedures for obtaining an employment visa.

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