Issue 30 June 2018l

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Raman Sidhu, FCAChairmanEBG Federation, India

EU & India

Chapter Update

Chapter Update - Cont’d

Sector Committees’ update andEBG Newsletter Sponsor

EBG Membership

EBG Position Paper 2018 release

EBG Position Paper 2018 release - Cont’d

Dear Readers,

I am pleased to bring to you another edition of this year's EBG Newsletter.

We present to you, in this Newsletter, a glance at some pictures of the Release event of this year's rd thPosition Paper organized in New Delhi and Mumbai on 23 April and 28 May, 2018 respectively.

We will inform you about the Bengaluru event in due course.

In the run up to the publication of this year's Position Paper, EBG has enabled the European companies to come together, sector by sector, and present their concerns and suggested doable solutions to the relevant Government agencies and other stakeholders. The Position Paper has thus set an agenda for higher level advocacy by EBG and the basis of a continuing dialogue with policy makers and some other relevant concerned Government agencies. The Sector Committee members, on behalf of EBG Membership, will continue to meet and interact with relevant senior functionaries in Government of India and a few State Governments. I take this opportunity to thank once again our Sector Committee Members and our knowledge partners for their immense support for making the publication of this Position Paper a success.

EBG Federation is a member of the European Business Organisation Worldwide Network (EBOWWN) and June. There are a lot of positive signals from the European Commission and the EU Delegation in India to support EBG in India as they see in EBG a very strong body that represents the voice of European businesses in India. The 2018 edition of the EBG Position Paper will again be presented to the European Commission and the EBOWWN members in this year's meeting

One of the key areas of focus this year, for me personally, is to further strengthen the working relationship with the European bilateral chambers/associations.

You can look forward to more interactive sessions and some high profile events in the coming months with EBG Stakeholders.

With my best wishes,

Raman

I am attending their Annual meeting in Brussels in

I would like to reiterate our acknowledgment to EBG's Council Members from all its chapters for continuing to remain the source of encouragement and support for EBG's growth and for holding high the EBG flag.

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Annual EBG-BBG Dateline Delhi event – Monday, th12 March, 2018 at the British Council, New Delhi.

Shri Atul Chaturvedi, Additional Secretary, DIPP, Ministry of Commerce and Industry with EBG's Automotive Sector Members to discuss the matter of increase in Customs Duty after the announcement of the Union Budget 2018-19 -

th Wednesday, 14 March, 2018 at Udyog Bhawan, New Delhi.

The Consul General of Switzerland, Mr. Martin Bienz hosted a business talk with Mr. Marcel Pawlicek, Global CEO, Burckhardt Compression Group, Switzerland for members of the Swiss-Indian Chamber of Commerce (SICC) and the

th EBG Mumbai Chapter–Wednesday, 18 April, 2018 in Mumbai.

Interactive session with Mr. Marco Buti, Director General at the Directorate General of Economic and Financial Affairs, European Commission and H.E. Mr. Tomasz Kozlowski, Ambassador of the

th European Union to India, – Friday, 18 May, 2018 in Mumbai.

Breakfast session for Bengaluru Chapter Members – stFriday, 1 June, 2018

EBG Sector Committees’ update:

EBG Sector Committees is one of the main pillars of EBG.

As you are aware, EBG Federation had successfully conducted the EBG Election of the Regional and National Council, after 2

years in December 2017. The new Regional and National Council are in place from 1st January 2018 for a further tenure of two

years. To align the Sector Committee Chair/Vice Chair position in line with the tenures, to the extent possible, of the National and

Regional Chairs/Vice Chairs, we have started the process with Sector Committees of doing exactly that.

The following sector committees have completed the election process:

The Telecom Sector Committee has a new Chairman – Mr Sandeep Bhargava, Vodafone. Mr Satyen Gupta, Blue Town

continues to be the Vice Chairman. Mr Bhargava took over from Mr T V Ramachandran. Mr Ramachandran has been

instrumental in making the Telecom Sector Committee one of EBG’s most active sector committees.

l The Telecom Sector Committee Members submitted their inputs for the draft. National Digital Communication Policy 2018.

The last date of submission of the inputs to the Department of Telecommunications was 1st June,2018.

Ms Pavithra Anand, Decathlon has taken over as the Chairperson of the Retail Sector Committee from Mr Patrik Antoni, IKEA.

Ms Neetu Kapasi has been invited to be the Vice Chairperson of the Retail Sector Committee.

l The Retail sector Committee are working closely to leverage the EBG platform to present its concern to the relevant

stakeholders. The Members will work together to resolve matters like plastic ban in Maharashtra, Custom duty issues,

External Commercial Borrowing

l The Members are also planning to start sub-groups on Finance, Legal and Customs within the sector committee to share

best practices.

EBG’s other sector committees have also been asked to go through a similar process to elect or retain their Chairman and Vice

Chairman for the coming 2 years.

What’s Newä

between PHD Chamber and EBG Federation in July 2018.

MoU of association to be signed Interactive session on “Transforming Businesses through

thSupply Chain Sustainability – Thursday, 7 June, 2018 at the Swiss Consulate, Bengaluru.

Sector Committees’ update and EBG Newsletter Sponsor

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EU & India Chapter Update - Cont’d

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4 years of reforming the Indian tax system!

Breakfast session for Bengaluru Chapter Members – Friday,st1 June, 2018

EBG Bengaluru Chapter had a good breakfast session at Bangalore ston Friday, 1 June where 15 companies across sectors including the

The Delegation of the European Union to India in cooperation with the EBG Federation, Mumbai Chapterorganised a luncheon roundtable with Mr. Marco Buti, Director General at the Directorate General of Econoomic and Financial Affairs, European Commission and the EU Ambassador to India, H.E. Mr. Tomasz Kozlowski. The meeting focused on broader macro-economic issues and on the

thbusiness environment for EU banks in India – Friday, 18 May, 2018 at the Taj Mahal Palace Hotel, Mumbai.

Interactive session attended by EBG Members on Transforming thBusinesses through Supply Chain Sustainability – Thursday, 7

June, 2018 at the Swiss Consulate, Bengaluru.

Upcoming events/meetings20 June 2018, Delhi – EBG Leadership Series 2018

EBG in association with Roseate Hotels & Resorts is organizing the 6th Leadership Series, where our guest speaker is Mr Manoj Kohli, Executive Chairman, SB Energy (Softbank Group).

Topic of the session: “Global transformations of Energy and Transport Sectors and their impact on the Indian scenario”.

The general format is that the Workshop is organized over breakfast and the duration is for 2 hours (starting at 8:30 am with registration and breakfast followed by the workshop for1 ½ hours).

Venue: Upstage, Roseate House, Asset 10, Hospitality District, Aerocity, New Delhi.

RSVP: Ms. Mamta Chamoli at admin@ebgindia.com or call at 7838226855.

4 July 2018, Delhi – Serendipity Arts Foundation invitesEBG Members to an evening event at the RoseateHouse, Aerocity, New Delhi.For more details, contact Neema S Kumar at gm@ebgindia.com.

12 July 2018, Delhi – Before the European Summer Break - Join us for a networking evening.

Venue: The Gallery Room, JW Mariott, Aerocity, New Delhi. Time: 6.30 pm to 9.00 pm.

For more details, call 9811418874.

likes of Siemens, Elior, Decathlon, Tecosim, KPMG, Kotak etc. The session covered overview of EBG wherein the members were briefed about membership base of EBG, the events that EBG generally organizes, Position Paper etc. Mr. Merill Cherian, Director, KPMG, gave a short presentation on the GDPR policy which came into effect

thfrom 25 May 2018. This was a very participative discussion and the attendees were keenly interested. Mr. Jose Jacob, Director, Organizing committee of TIA summit gave a short presentation on their association with EBG too.

The Consul General of Switzerland, Mr. Martin Bienz hosted a business talk with Mr. Marcel Pawlicek, Global CEO, Burckhardt Compression Group, Switzerland for members of the Swiss-Indian Chamber of Commerce (SICC) and the EBG Mumbai Chapter Members. Mr. Pawlicek spoke about structuring a global company for operational flexibility and innovation and shared the history behind the success of the Burckhardt Compression Group –

th18 April 2018 in Mumbai.

May 2018 marked the completion of four years of the current government led by Mr Narendra Modi. During these four years, the Modi government introduced a number of reforms ranging from demonetization to the Goods and Services Tax (GST). At this point of time, it will be useful to evaluate the government's performance on key tax reforms.

What precisely was expected from Mr Modi? Surely, that's one fair way to judge how his government has done so far, as he bids for re-election next year. As far as tax policy goes, the current government stormed to a majority tally riding among other things, on its promise of a non-adversarial tax regime. This specifically included: i) reduction in tax disputes, ii) no retrospective tax amendments, iii) reduction in corporate tax rates, and iv) introduction of the GST.

Given the inter-dependent nature of economies today, it would be unfair to evaluate the government's performance only on the above parameters without also considering corresponding global tax developments in perspective. In the past four years, the overarching theme has definitely increased global cooperation among countries. This has manifested in multiple actionable outcomes which were unconceivable even a decade ago. Most prominent example of this is the Base Erosion and Profit Shifting (BEPS) project. Initiated at the behest of G-20 finance ministers, the BEPS project witnessed active participation from a host of developed and developing countries, in addition to the OECD and G-20 nations. The aim of the project is to avoid interaction of tax laws - especially international tax laws and double tax treaties - in a manner that creates opportunities for double non-taxation.

The second most important result of this cooperation is the paradigm shift in the information exchange framework. 100 countries have signed the OECD's multilateral competent authority agreement on automatic exchange of financial account information. Similarly, more than 100 countries have agreed to share financial information with the US under Foreign Account Tax Compliance Act (FATCA). While avenues for information exchange existed earlier as well, they were mostly bilateral and worked on request basis. The current framework is based on the automatic exchange of information among a number of countries.

The application of country-by-country report (CbCR), another recommendation under the BEPS project, would also increase the transparency on value creation under each jurisdiction to align it with the tax outcome. After implementing the recommendations under the BEPS project, coupled with increased information on taxpayers, the tax base across the world is expected to increase. As a corollary, tax rates across the globe have fallen. The Trump administration slashed tax rates from 35% to 21%. Additionally, there is an even lower, 15% rate for one-time repatriation of cash to US parent companies. Notwithstanding the distinction of already having the lowest tax rate among G7 economies, the UK government has promised to further cut taxes from 19% to 17% by 2020.

In the 2015 Union Budget, the government had said that corporate tax rate would be reduced from 30% to 25%over 4 years, coupled with simultaneous phasing out of tax incentives. Today, the reduced rate of 25% is applicable for companies whose turnover (in financial year 2016-17) is upto INR 2500 million. The notion of making the tax regime simpler by eliminating exemptions, is certainly novel and well-intended. However, considering the recent changes, increase in tax base due to aforesaid developments and implementation of the GST, the magnitude of the tax cut could have been bigger. The simple rationale for this argument asks why a US or UK investor, would want to set up shop in India when the tax arbitrage is high. To sum up, while the cut in tax rate is welcome, the magnitude should be increased in line with the global trend.

The government has been proactively participating in global forums for information exchange and to also ensure follow-up action under the domestic law to implement recommendations of these forums. India is a part of the OECD program on information exchange and the government also entered into an inter-govermental agreement with its US counterparts to implement FATCA. India has also been an active member of the BEPS initiative. To this effect, the government in 2016, introduced core elements of CbCR reporting requirement and the concept of master file in domestic tax laws. Pursuant to BEPS Action 1, the concept of 'equalization levy' and 'significant economic presence' were introduced in 2016 and 2018 respectively. Both these measures are targeted specifically to ring fence the digital economy and bring non-resident service providers to tax in India.

While there have been efforts to reduce tax disputes, this is still an area of concern that requires additional effort from the government. The recent enhancement of monetary limit over which the government may appeal against, in a case, was helpful but not sufficient. From 2014 to 2017, the amount of tax disputes increased by 50%.

The implementation of GST has certainly been the highlight of this government. Touted as the single most important tax reform since Independence, GST has the potential to contribute 1 to 2% to the GDP growth rate. However, simplifying procedures to encourage compliance, bringing petroleum products into the GST ambit and eventually converging the 12%and 18%tax rates, remain the to-do tasks for the GST Council. The government has certainly done well to avoid retrospective amendments to tax laws. This has increased investor confidence and improved India's rankings in the 'ease of doing business' index (maintained by the World Bank), by more than 30 points. FDI in India has increased from USD 36 billion to USD 60 billion under the Modi government.

While the Modi government has done much to improve and increase the tax base, more needs to be done to improve the direct to indirect tax collection ratio. Since direct taxes are inherently progressive in nature as opposed to indirect taxes, the emphasis should be on the enhanced collection of direct taxes as opposed to taking advantage of low hanging fruits such as increasing scope and rate of indirect taxes. For this, the government would do well to accept the recommendations made by the Tax Administration Reform Committee (TARC) led by Dr Parthasarathy Shome. Some of the recommendations include removing tax exemption on agricultural income and investment on IT infrastructure, to effectively mine data pertaining to taxpayers.

To sum up, the above reforms suggest that the four years under the Modi government have been in the right direction and India is on a growth trajectory. However, these positive steps have not been devoid of setbacks and disruptions. The Modi government has a challenging fifth year ahead of itself, one with rising crude oil prices and current account deficit. These challenges may make or break its shot for a second term in power.

Information for the editor for reference purposes only.

Gokul Chaudhri is Partner, Deloitte India

Amit Bablani is Senior Manager and Sahil Gupta is Deputy Manager, Deloitte Touche Tohmatsu India LLP

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EBG MembershipChapter Update

Some good reasons to join the EBG!!

Our mission statement: EBG Federation in India aims to promote Europe as India's most preferred business partner thus creating environment that allows European Business to flourish.

As always, one of the clear objectives for 2018 is to increase the membership of the EBG Federation in India. Our best advocates are undoubtedly the existing members, and it is word of mouth which is the best vehicle for reaching out and engaging new members amongst the European Business Community in India.As of today, EBG Federation has Chapters in Delhi, Mumbai, Bengaluru with around 160 corporates as members.

EBG Federation membership confers the following unique advantages:l Participating in a unique, effective and renowned forum which

interacts with key decision-makers in government, industry associations, think-tanks, media and influential individuals.

l Sharing experiences with a dynamic group of European business representatives that actively promotes and safeguards their respective business interests in India.

l Benefitting from a wide range of events including:

ä Business events focusing on specific sector related issues.

ä Interactive meetings with Indian Industry, policy makers and others in the area of business and culture in order to facilitate greater understanding, dialogue and cooperation between all stakeholders.

ä Opportunities to connect with Indian Government and Industry.

ä Social networking events.

ä Access to bilateral chamber and other visible association's events.

ä Visits to facilities (Tetra Pak factory, Maruti factory, Hotels, under construction Airports etc.),

Leadership series, CFO Forums etc.

We still need to build on this and further consolidate.

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Position Paper published every year and aimed at improving the business climate in India.

l Contribution to policy making through the EBG's 'Sector Committees' representing different industrial or business sectors and also presenting the European Business Communities' recommendations for the Union Budget every year to theMinistry of Finance and other government forums(A P Shah Committee – M.A.T, GST Council)

Raising policy issues with decision-makers through the EBG

We request each and every existing EBG member to be our Ambassador and help the EBG membership grow by looking around their own business community, be it those working in the same sector or in quite different fields, invite people along to our networking events or business gatherings. They could also consider inviting them to a sector committee meeting if they are in the same sector of activity and hence encouraging them to bring their skills and their experience with them.

Join or Renew Your Membership

Call Neema S Kumar at +91 9811418874to learn more

Welcome New MembersS.NO ORGANISATION CHAPTER

1 Johnson & Johnson Mumbai

2 ASA - CCI Mumbai

3 Bird Group Delhi

4 BNP Paribas Bengaluru

5 Charities Aid Foundation Delhi

6 DB Group Mumbai

7 Deloitte Mumbai

8 Elior India Catering LLP Bengaluru

9 Ernst & Young Mumbai

10 Indospace Mumbai

11 JMP Advisors Mumbai

12 Larsen & Toubro Mumbai

13 Mascot Engineering Mumbai

14 MTU RollsRoyce Mumbai

15 Nymphenburg Mumbai

16 Paharpur Business Centre Delhi

17 TMF Group Bengaluru

Chapter updates on the events organised to release the2018 edition of the EBG Position Paper

The 2018 edition of the EBG Position Paper was released by H.EMr Tomasz Kozlowski, Ambassador of the European Union to India, Dr Rajiv Kumar, Vice Chairman, NITI Aayog and the present Ambassadors, senior officials of

rdEuropean Embassies on 23 April, 2018 at Taj Mahal Hotel,New Delhi.

This year a panel discussion on “Strengthening India – EU trade: The Way Forward” was also organised to set the background for the EBG Position Paper release. The session was excellently moderated by H.E Ms Nina Vaskunlahti, Ambassador of Finland and the eminent panel included Shri Atul Chaturvedi, Additional Secretary, Department of Industrial Policy &Promotion (DIPP), Ministry of Commerce & Industry; Shri Arvind Gupta, CEO, MyGov, Ministry of Electronics and Information Technology; Ms Amy Kazmin, South Asia Bureau Chief at Financial Times & Mr Julian Bevis, Senior Director, Group Relations, South Asia, The Maersk Group.

The event was well attended with around 220 participants and had representation from CEOs, CFOs and Managing Directors of major European companies, leading consultants and 13 Ambassadors and and senior officials from the European Embassies.

It is noteworthy to mention about the efforts put in by all the Sector Committee Chairpersons & its members and all their knowledge partners for the timely publication of the EBG Position Paper,2018.

Indian Direct Selling Association (IDSA) was our event partner. IDSA's Annual Survey report was also released after the EBG Position Paper release.

The event was also supported by the EBG Members - G4S, BMW, Vodafone, , Home Credit, SAAB Group, Maersk Group, Outokumpu, Pernod Ricard, TUV Rheinland, and Alar.

Government of India and

bioMérieux

th Release of the EBG Position Paper, 2018 – Monday, 28

May, 2018 in Mumbai.

EBG Position Paper 2018 was presented to Mr. Krishna Jadhav, Department of the Ministry of Industries and Mining, Government of

thMaharashtra on behalf of the Minister on Monday, 28 May 2018 at

the Taj Mahal Palace, Mumbai. Unfortunately, Mr. Desai was unable to attend the event as he was held back in Palgadh due to the by-elections that took place on that day. The evening was well attended by various Company Heads, Consul Generals, Embassy and Government officials. Fuchs Lubricants were the main Event Sponsors'. Motul and IDSA were the Gold Sponsors

Mr Raman Sidhu, Chairman, EBG Federation at th Counsellors' meeting organised on Thursday, 8

March, 2018.

Ms Marika Jakas, Counsellor – Head of Trade and Economic Affairs, Delegation of the European Union to India invited Mr. Raman Sidhu, Chairman, EBG Federation, India to give a presentation about the upcoming position paper at the EU Commercial & Economic Counsellors' meeting held in March,2018. Mr Sidhu was accompanied by Mr T V Ramachandran, Chairman, Telecom Sector Committee; Ms Neetu Kapasi (IKEA) & Mr Amit Sinha (Richemont) – Retail Sector Committee; Mr Vinod Pandey (BMW),Chairman, Automotive Sector Committee to share their views. Mr Rajeev Gupta, Senior Advisor, Sector Committees & Position Paper;Neema S Kumar, EBG Secretariat were also present at the meeting.

an EU Commercial & Economic

Other event updates:

Release of the EBG Position Paper, 2018– Mondayrd 23 April, 2018 in New Delhi

Visit the EBG website at www.ebgindia.com.We look forward to receive your valuable feedback.

Write to Neema S Kumar at gm@ebgindia.com

Published by : EBG Federation, India

Contact : Neema S Kumar

General Manager

EBG Federation, 2nd Floor

Building No. 6

Okhla Industrial Estate, Okhla

New Delhi- 110 020

Mobile : 91-11-9811418874

E-mail : gm@ebgindia.com

This year the Annual EBG-BBG Dateline Delhi event where a panel of eminent speakers answer questions on current affairs was organised on Monday, 12 March, 2018 at the British Council, New Delhi

The eminent panel included Dr Sanjaya Baru, Secretary General, FICCI; Amy Kazmin, South Asia Bureau Chief at Financial Times; Rajini Vaidyanathan, BBC News Correspondent and anchor; Anil Padmanabhan, Executive Editor at Mint and John Elliott, Journalist and Blogger – Riding the Elephant. The British High Commissioner, Sir Dominic Asquith KCMG moderated the session.

The event was supported by Europa Security, Sonalika Solis and Kyndal Group. British Council was the venue partner.

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Release of the 2018 edition of the EBG Position Paper in Delhi rd- Monday, 23 April, 2018

EBG Position Paper 2018 release EBG Position Paper 2018 release - Cont’d

EBG Position Paperl EBG's Annual Policy Document is a collective expression of the views

of the members of the EBG Federation and its Knowledge Partners.

l Expresses relevant concerns of EU Corporates in carrying on or growing their businesses in the current environment in India

l Proposes key Policy reforms that will be conducive for the growth of business and what it believes are in the realm of possibility for the Indian Government to put in place.

l Distributed to all important and relevant stakeholders in the Government of India, Delegation of the European Union to India and European Commission

thl 16 edition of the EBG Position Paper with a coverage of 17 key

sectors

thRelease of the 2018 edition of the EBG Position Paper in Mumbai - Monday, 28 May, 2018

Pre-event ad that appeared in the Business Standard on rdMonday, 23 April, 2018 for the release event at Delhi.