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tech startups in india

Why Tech Startups Should Worry as India Strengthens Its Competition Law

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Tech Startups in India & Its Competition Law

It is quite undeniable to state that an individual’s life revolves around new tech especially given the odious times of the pandemic. with its increased usage in our daily lives, companies like Facebook and Google seem to be omnipresent.

Thus the influence they present on anybody’s life is tremendous and sometimes unwarranted. This especially presents a problem for the individual if such an undeniably tremendous power goes unchecked and unregulated.

Given the burgeoning influence it has on society and the catastrophic circumstances it might have in the future given the spread of fake information, the Government has taken matters into its own hand.

This has led to the initiation of newer regulations and rules with regard to competition. These laws are more geared to deal with the burgeoning, unchecked power of big tech firms. It can, in fact, be stated that such laws are being passed to curtail the growing influence and power of the big techs.

tech startupshistorical development of the MRTP act

the monopolies and restrictive trade practices law was passed in 1962 to regulate and curtail the monopolistic trade in the Indian economy. It is here to be noted that initially it was initially had a socialistic character and did not apply to the public sectors.

It was due to this attribute of non-regulation of the public-owned entities like the banks, corporations, etc. that led to the passage of the Competition Act in 2002. Its main objective was to emphatically deal with anti-competitive agreements. In compliance, it also wanted to end the abuse of a dominant position and the acquisitions in the economy.

But what actually led to the debacle of the MRTP act? It was mainly due to the inefficiency that had crept in the system due to bias that had seeped in the system. It had led to the bias against the private sector which wasn’t quite accommodating.

On the other hand, the liberalization in 1991 had shaken the foundation of the robust MRTP structure in the Indian economy. It was also perhaps due to a lack of clarity on a variety of definitions that made it quite ambiguous.

Thus with liberalization in trade, robust competition law was effectively needed as trade and competition are effectively intertwined. But this also meant that Competition laws had effectively monitored the cutthroat competition that was presented by the foreign corporations to promote healthy competition and protect consumer interest.

It is to be noted that with increasing Competition law regulation, the system has become reductant and crippling. It with its regulatory authority has started to emphatically affect the tech companies in big ways in order to regulate their size and market dominance. In fact, internationally, the authority of Google and Microsoft have been challenged.

Coupled with it the Indian authorities have also invariably placed allegations against Flipkart and Amazon for their increasing discount sales in the economy. On the other hand, allegations have been filed against Facebook for renewing its investment with Reliance Jio.

best tech startups

Though the government in India is emphatically trying to control the competition and monopoly in India, its measures are increasingly becoming reluctant. It is to be noted that free trade is itself a competition regulator where the inefficient move out of the market.

With extra ostentatious and complex competition laws for a developing country, these are usually crippling. Competition laws are a luxury for the developed country that developing countries like India can ill afford.

On the other hand, the government’s new attitude towards regulating the big tech firms has been strongly reflected in the new amendment bill of 2020. This emphatically molds and changes the regulatory structure of the CCI in restructuring procedures for effectively regulating the guidelines.

The new bill also increasingly seeks to expand the Act to invariably and quite detestably include the digital markets. A recent example of the same is the heavy regulations that have been proposed for the arrangement and buyers cartel. With various reductant measures to regulate the digital world with the chief compliance officer and a series of measures, inefficiency is bound to seep in.

technology startups in indiaWith the increasing popularity of the tech companies and corporations, it has been seen how the tech world is increasingly dealing with the cases such as the ola uber pricing issue and the other google antitrust allegations.

Talking about the mergers laws and the applicability of the competition laws, it is to be noted that the current merger control framework is traditional and hence reductant as CCI approval is needed if the two companies involved in the merger cross a certain limit of assets and turnover thresholds.

But given the nature of the tech firms, these are very asset-light and might actually not earn revenue for many years. This is due to the fact that the company’s more immediate goal is to expand and gain a consumer base in the market. Thus, this might lead to overlooking high-value transactions that might escape scrutiny.

In fact, the regulation of the digital framework regulation by just CCI will not help. This is due to the fact that it might also require the help of a data protection bill and more importantly of the broadcast company of India. Thus, the increasing number of regulations is not the need of the hour but the accommodation of the same is.

 


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The Rise of The Indian NFT Market

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The Indian NFT Market

It is no news that the digital economy is on the rise. The era of the digital economy was effectively ushered by the pandemic. The digital transformation took place rapidly which was mainly due to the compulsion faced by many individuals to work in their remote surroundings.

Not only cryptocurrency but the rise of the broader digital asset industry was also witnessed. Thus, with the rise of cryptocurrency, the rise the popularity of non-fungible tokens has also been seen. It is to be noted that according to various reports a total of more than $208 million of NFT artwork had been sold.

indian nft marketGiven its recent nature, it is quite extraordinary that it has recorded such a humungous growth. This also corroborates the fact that NFT is on the rise and is just in its nascent stage of development, mustering all the growing popularity in the global market.

Since the onset of the pandemic some $250 million worth of total NFT volume has been traded. This data was collected for just one year i.e.2020. This effectively shows that even with economic uncertainty and financial crippling of many, NFT trade is on the rise.

The NFT model has been immensely helping various sectors that are looking for alternatives to monetize their businesses. In addition, creative artists are effectively utilizing NFTs to significantly generate revenues for their creative works.

It is to be noted that concerts and music festivals were not held due to the onset of the pandemic, but many artists around the world have enthusiastically used the novel methods of monetizing their creative work by selling in the form of NFTs.

A very appropriate example for the same is the music brand, Kings of Leon, releasing its new album as a limited edition NFT. The sale of just six NFTs has provided lifetime tickets to front-row seats for the band’s shows in the future.

nft market in indiaIt is to be noted that NFTs that are digital creative works are actually premised on blockchains which work quite similarly to crypto. Blockchain technology which is quite permanent and has unchangeable digital ledgers provides the user the security of recorded transactions that reveal history.

It is to be noted that this has led to growing confidence in the industry which secures transactions for future issues and gives effective ownership of NFTs to the rightful owners.

It is to be noted that before the invention or emphatic use of the NFTs the creators were facing limitations for their revenue. But now with the rise of the NFTs, an infinite number of copies can be made of their digital creative works and can be distributed throughout the internet to generate humongous revenue.

This gives rise to the question that how does NFTs make it possible for creators to genera

nft market place

te and distribute their artwork that cannot be plagiarized? It is to be noted that the finite tokenized versions of these digital creative works ensure their uniqueness and make the attempt to counterfeit scarce. this helps the artists to preserve the uniqueness of their work.

Additionally, the NFTs cannot be replicated which insures the creators of his or her work. Thus, given the robust base of the establishment of the NFTs, it can be rightfully stated that excitement relating to NFTs is growing exponentially in the global market.nft marketplace bsc

But given all the favorable attributes of the NFTs, their legal treatment and regulation are somewhat unsettled. As aforementioned that the royalties and uniqueness of the work are preserved through NFT trading, it is to be noted that this might not always be true.

Smart contracts are written into the code of NFTs. This invariably allows for the distribution of funds in the form of royalties that the creator receives each time his or her work is resold. However, this is applicable and works only when the NFT resale is done through the same platform.

To add to the arduous attribute of the NFT, US law does not effectively recognize resale rights. These resale rights are unrecognized and are in relation to the creative works. Thus, this nonrecognition of the resale attribute of the NFT means that no law provides recourse for unpaid resale royalties.

Given the exuberant rise of the NFT market, people from all walks of life are participating in the NFT market. But given various legal restrictions, many are unaware of the same. This usually leads to odious infringement liability.

Thus, lastly, it can be stated that the introduction of NFTs has great potential to emphatically influence and usher the digital revolution in the economy. Its usage has led many artists to earn their due during the failing pandemic period and can be used in the future too making the transition to the digital world more prominent.

Additionally, not the conventional arts being monetized but also the creators can also monetize against other unconventional physical properties and can gain proof, scarcity and uniqueness, ownership to digital assets.
However, it is to be noted that the NFT market is still in its nascent stage of development.

 


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arbitrability of ip disputes

The Arbitrability of IP Disputes

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Arbitrability of IP Disputes in India

Courts around the world have been systematically enlarging the ultimate scope of alternate arbitration dispute mechanisms. This is due to the fact that it has been witnessed throughout the years that arbitrability of ip disputes has progressively become the default commercial dispute mechanism around the globe.

Thus, it is quite imperative that the scope of alternative dispute mechanisms is widened in order to reduce the burden on courts. But talking about the Indian jurisprudence, on the contrary, it has been encountered that time and again courts have emphatically6 and effectively held that the disputes concerning various Intellectual Property Rights as non-arbitrable.

But why is this case with India? This is due to a pertinent and prime reason that courts often strongly are of the opinion that enforcement of IPR involves the public policy aspect. This effectively means that it would be strong going against the interests of the public if such contentious matter of intellectual rights is made arbitrable.

On the other hand, what makes the possibility of enactment of arbitration difficult is the fact that the Indian domestic statutes such as the Arbitration and Conciliation Act of 1996 and various other IP legislations do not effectively provide a concrete expression.

This concrete expression pertaining to the availability of Arbitration in IP Disputes is not strategically laid out by the aforementioned Acts.

arbitrability of ip disputes in india

To state the specifics to reinforce the fact, it is to be noted that Section 89 of the code of Civil Procedure, 1908 strategically states that the court has the extreme power to refer the IP matters to ADR. Thus, Courts are given the authority or the extreme power to deem fit and consequently allow arbitration, mediation, or conciliation for the alleged settlement of disputes.

Given the aforementioned authority, Courts have been strongly trying to settle the ADR practices. They have also come up with various tests to strategically and easily determine the arbitrability of various types of disputes. Thus, one can conclude that the arbitration process in India is well laid out by the courts that laid out the tests and measures to effectively determine the arbitrability of disputes.

To cite a case, the case of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. Serves as a perfect example. In the aforementioned case, the Supreme Court had strongly held that all the disputes which directly pertain to “right in personam” are arbitrable in nature. On the other hand, for clarity, it was stated that all the disrupts that highly relate to “right in rem” are effectively unsuitable for arbitration.

So, the gist of the aforementioned example gives us a much-needed sneak peek into the world of arbitration in India. It intelligently informs us that a major aspect that determines arbitrability is actually the nature of judgment sought by the aggrieved. This determinative attribute states that if the judgment that is sought by the arrived is against
The current status

To judge the current status of arbitration in India, the latest case of the Delhi High Court Judgment is worthy to be scrutinized. The case of Golden Tobie (P) Ltd. v. Golden Tobacco Ltd., is the case where the defendant had effectively filed an application under Section-8 of the aforementioned act namely Arbitration and Conciliation Act, 1996.

To lay down the facts of the case, the parties had entered into a master long-term supply agreement. Now, by the agreement, the defendant had supplied exclusive brands of the defendant to the Plaintiff. Here, to complicate the matter, the plaintiff had subsequently had entered into a trademark license agreement.

arbitrability

The reason by the plaintiff for the same was stated, he had acquired or had been effectively granted an exclusive non-assignable, non-transferable license. The license gave the power to the plaintiff to strategically manufacture the Defendant’s product.

Here, it was stated by the plaintiff, that despite the humungous operational expenditure and capital spent by the plaintiff to amicably and effectively increase the availability of the Defendant’s products, he was issued a termination notice.

Now here it is to be noted that since the commercial production had not yet begun in strength, the agreement was rightly terminated. Subsequently, it was informed by Defendant, upon receiving another termination letter that the timely payment had not been made.

Thus, this meant, according to the defendant, that the plaintiff had no right to potentially and effectively sell his products or manufacture the exclusive brands in the market. Hence, when this suit was filed, it was decided by the apex court that the matter under consideration will be referred to the sole arbitrator.

Thus, given the aforementioned case, it can be strongly argued that the arbitration in Intellectual property rights matters only arises out of the nature of the dispute. This also reinforces the idea that if the procedures are well in place, they can bring an affirmative impact.

 


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south asia

South Asia

By Others No Comments

South Asia

The ”occasional dimness” issue is one that torments huge pieces of South Asia in long stretches of dry season (for a new outline, see Lim and Johnston, 1999).

The repeat of the El Nino Southern Oscillation (ENSO) peculiarity is likewise accepted to have drawn out the dry season also strengthened the inescapability of woods fires.

Singapore has encountered especially extreme negative natural effects of this problem, particularly in the later long periods of 1997, in the early long stretches of 1998, and in mid-1999.

The worry among Southeast Asian nations has reached a higher-than any time in recent memory level both in the public and private areas.

southeast asia The examinations done on the 1997 murkiness found that the expense for Singapore alone arrived at US$163.5–US$286.2 million, with the best effect on the travel industry during the time of the murkiness.

Table 1 shows that wellbeing expenses and misfortune in the travel industry account\ for US$3.8–US$4.5 million and US$136.6– US$210.5 million, separately.

Backhanded expenses in the type of loss of perceivability, grand perspectives, and sporting exercises are likewise huge, in the region of US$23.2–US$71.2 million.

Furthermore, these quotes might be a misjudgment of the genuine expenses since not everything is probably going to be represented.

If the recurrence of the fog scenes increment, the related expenses are probably going to increment. Henceforth, it is basic to focus on the issue brought about by the fog in Singapore.

The significant reason for this ”occasional murkiness” issue is backwoods, shrubbery, and field fires in the islands of Kalimantan and Sumatra in Indonesia, and less significantly in Sabah, Sarawak, furthermore different pieces of Malaysia.

southeast asia Practically these fires currently appear to be preventable, since they are intentionally set to clear land for development.

Hypothetically, the public authority specialists at focal, commonplace, and neighborhood levels in these nations ought to be liable for controlling exercises in their domain that cause widespread harm and pain, not just among their own populace yet additionally across their borders in adjoining nations.

Practically speaking, in any case, air contamination control through regulatory arrangements and practices is remarkably hard to carry out and keep up within a situation of this sort in agricultural nations, especially during a period of devastating financial mishaps, the new Asian financial emergency, and political vulnerability in Indonesia.

The worldwide academic local area has been checking and estimating enormous scope land and backwoods fires in various districts for numerous years, helped by refined recognition advancements.

Nino and its dry season creating impacts in Southeast Asia would empower watchful organizations in the district to plan all the more wisely in light of previous experience.

However, nobody proposes that the present lacking strategy reaction to the issue is expected principally to an absence of essential logical information about the issue.

A further logical examination of this sort is significant all around the world, yet the exploration cost is anything but a significant piece of the expenses of avoidance that ought to be met around here.

On the substance of things, a reformist (or even coalitionist) system in Indonesia may be relied upon to put generously in dimness-related research, yet with weighty reliance on worldwide wellsprings of specialized help.

Such an approach should embrace a management-directed research technique, which would comprise of two essential elements.

To begin with, this technique ought to mirror a genuinely genuine and efficient work to coordinate the many disciplines, both hard and delicate, that add to land use and sane asset the board in the fire-related spaces of the district.

Second, the logical research methodology for the battling area and woods flames ought to underscore remote detecting and GIS-related strategies for data gathering and handling. All things considered, any authorization regime will require close checking of the situation just as following methods and results.

These would seem, by all accounts, to be the two most financially savvy kinds of examination to be pushed to strategy producers in the area, however, they do experience the ill effects of specific weaknesses. Remote detecting, for instance, can just catch flames to a certain extent.

Assuming that the region impacted is little, there is a lot more modest possibility of location. This number and exactness of the factors utilized, which might incorporate the size of flames, region impacted, the thickness of overcast cover and climate conditions, decide the helpfulness of GIS-related strategies, and the Indonesian specialists may experience issues in social occasion precise data to utilize the GIS strategy.

stakeholders approach Hence, other significant sorts of logical examination additionally merit proceeded with help from outside sources. The haze resulting from the fires in Indonesia has caused severe economic and environmental damage in the region and will continue to do so if no prompt and effective measures are taken.

This study has reviewed the related issues and suggested policy responses from different perspectives, and some incentive mechanisms for preventing or reducing the effects of the fires have been discussed. A ‘‘stakeholders approach’’ to sharing the costs of certain programs to combat the fires has been suggested.

 


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corporate borrowers in india

Large Corporate Borrowers in India Return to Banks as Economy Shows Revival

By Corporate Law, Others No Comments

Why Corporate Borrowers in India Return to Banks?

Given the uncertainty that has been imposed by the pandemic on the countries around the world, lower bank credit is the most visible consequence of it.

According to the reports, bank credit to industry has been mute for quite some time now, having fallen 1.7% in the year to date. But under current circumstances and a growing economy, bankers are highly expecting a revival in corporate loan growth. ‘

This can be emphatically possible due to the economy opening up, demanding a higher flow of credit in the market. What would make this a strong business case is the act that high recovery will guarantee high economic prospects in the future, which will ramp up the need for capital expenditure in the economy and hence higher borrowing.

talking about performances of different kinds of loans in the market, chunky industrial loans, which effectively make up about 30% of non-food credit, witnessed mild reactions and demand in the financial year 2021.

This severely underscored a trend among companies to conserve cash. On the other hand, retail credit demand in the economy expanded emphatically. What makes this expansion surprising is the fact that it expanded through the period of episodic lockdowns and curbs that were placed by the authorities on mobility.

but given the gloom that the banking sector had witnessed in the financial year 2021, higher growth prospects are making analysts believe that credit demand will now pick up.

the corporate borrowers in indiaA fact that is backed by an organization of consequence carries weight. Hence, to add weightage to the argument stated above, the Japanese leading investment bank, namely Nomura. Has strategically stated that growing optimism in the market and abundant liquidity should boost loan demand in the future.

with the high performance of the retail sector, what other sectors will encounter loan growths in the future? It is to be noted that other than the retail sector, the manufacturing and services sector will encounter growth and liquidity.

If the last, unconventional year is to be scrutinized, uncertainty had provided that better judgment of the investors and had forced the infrastructure and various sectors to close down in the economy.

This had severely affected the business environment, which in return has exhibited muted credit demand from traditionally asset-heavy industries. But this gives rise to a pertinent question with heavy stimulus running through the economy and lower interest rates, shouldn’t investment and spending be on the rise?

The answer is more complicated than a layman might anticipate it to be. Instead of undertaking newer investments in the market and emphatically adding more debt to their balance sheets, several companies in the asset-heavy sector effectively and strategically sought to deleverage.

corporate business loansThis was done by harnessing cash flows in the economy to heavily improve their debt profiles, which had been faltering throughout the pandemic.

But was the pursuit to improve the debt profiles of the companies the only reason for the enactment of such a plan of action? It is to be noted that a good business practice is that when two motives can be achieved through one strategy, one should go for it and what certainly can be better than that?

And that is what had motivated the companies and corporations to go along with the plan to deleverage. It is to be noted that the better, debt-free profiles of the corporations should now encourage many companies to add debt to their portfolio as they undertake expansion of capital. Thus, with improved profiles, the extra room has been created for undertaking more expansion in the future.

Thus, one can effectively argue that after undergoing a strenuous and arduous phase of deleveraging over the past few years, the companies will be in a better position for re-leveraging. In fact, as a matter of fact, Indian financiers have emphatically and effectively saddled themselves with ample liquidity also known as capital buffers to tap the emerging opportunity.

Another reason that had led to smaller bank credit growth was the cheaper rates in overseas and the local bond markets that were looked upon by the companies as their source for their short- and medium-term funding needs.

What corroborates the claim that the loans will be on the rise is the fact that the banks are already seeing an uptick in demand from city gas, road projects, and renewable energy projects. Thus, given that one is witnessing such a strong demand even when the econom6 is struggling with a newer variant, one can definitely anticipate higher demand for loans in the future.

corporate term loanin totality, it can be stated that industry growth will emphatically emerge as a key driver to boost credit growth in the economy. Though, a word of caution is necessary that states that though India will witness an increase in loan demands, lags would still be prevalent.

This merely will be due to fact that the economy can be highly unpredictable mainly due to covid variant mutations and unorganized consumer and investors’ confidence. Though, even though lags might fraught the process, government spending and revival in consumer demand can be the potential triggers.

 


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e-commerce regulations in india

India’s E-commerce Regulatory Contradictions: P2B Regulatory Blind Spot

By Others No Comments

India’s E-commerce Regulatory Contradictions

Despite excessive e-commerce regulations in India, one can emphatically maintain that much is yet to be rectified. This needs to be specifically done in the P2B sector also known as the platform to the business model.

Owing to regulatory lacuna or void, several allegations have been registered regarding unfair trade practices. Allegations against E-marketplaces have surfaced which involve allegations like skewed placements and ranking, self-preferencing, and opacity and regulations in terms of the use of consumer data.

Thus, given the fact that the e-commerce sector is garnering more and more important, it is quite crucial that regulatory rules are played attention to.

Given the unprecedented last year, the domestic e-commerce market in India has flourished. One might even say that the digital revolution had been ushered by the onset of the pandemic.

this was mainly due to the fact that many individuals were forced to return to their home environment where the usage of e-commerce platforms and digit platforms became an inevitability.

In fact, the increased internet access and high smartphone penetration have fastened the process of digitalization of India. On the other hand, an immediate push for “digital India” by the Modi government has also contributed to the digitalization of India.

the e-commerce regulations in indiaIf the statistics are to be scrutinized, the pandemic inflicted woes on India’s retail sector that had shrunk by a significant 5 percent. But on the other hand, this opportunity was relished by the e-commerce sector which recorded a growth of a staggering 5 percent. This significantly had ramped up the valuation of the sector to a total valuation of $38 million.

If you are an avid online shopper, chances are you have increasingly heard about e-marketplaces. It can be rightfully stated that e-marketplaces can be seen as the new emerging trend in the Indian market. It is to be noted that – marketplaces connect sellers and business users with consumers but virtually.

E-marketplaces have garnered much popularity and have been presenting a tough fight to the physical retail sector that is still recuperating from the aftereffects of the pandemic. with the fall of the physical marketplaces and due to the variety of perks that were being offered by the e-commerce sector, such as massive discounts, home delivery, variety of products, etc. e-marketplaces have garnered much attention.

The tech giants that had the most to gain were namely Flipkart, Amazon, and food delivery aggregators namely Zomato and Swiggy.

As aforementioned, due to the stiff competition being provided by the e-commerce sector, there has been a growing unease for business users that sell their services offline.

Due to this trend, various allegations have surfaced like that of extremely unfair practices and trade which have been undertaken by presenting deep discounting and preferential treatment of platforms for its own offerings.

These allegations gain importance since the state of competition in the Indian e-commerce market tells the story of the concentration of immense power in the hands of a handful of e-marketplaces.

The unfair practices and growing share of a handful in the market have made it unavoidable for small businesses to partner with them. This is usually due to the fact that various small businesses want to set their foot in the market.

This detestable attribute has put the e-commerce giant in an indispensable position. This is due to the fact that the circumstances have arguably accorded them the status of being ‘gatekeepers’ within the sector.

On top of it, owing to the vast bargaining power imbalances that have cropped up into the system, the business is at a severe disadvantage to not be able to negotiate with such e-marketplaces giants. Thus, this has led to the practice of unfair practices and unfair treatment in the sector.

e-commerce rules and regulations indiaTalking about the regulation of the e-commerce sector in India, it is to be noted that e-commerce in India does not pertain to a particular sector. Due to this analogy, different aspects of e-commerce are particularly regulated by various other regulators in a particularly fragmented manner.

Now one might argue that various e-commerce regulations are in places like the Competition Act, passed in 2002, or the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 and the consolidated Foreign Direct Investment Policy, that have been significantly drafted for the convenience of the sellers. But it is a fact that all the aforementioned laws are quite toothless in the face of seller woes.

To put the analogy in perspective, it is sagacious to anise the Competition Act, 2002. According to the law, it is to be noted that it allows for significant and effective intervention only if the unfair practices are carried out by some ‘dominant’ entity.

It is due to this detestable attribute that various entities that actually relishing the fruits are left scot-free. Given the nature of the Indian e-commerce market, it is concentrated with a few big players, and not by a clear dominant player.

india e-commerce regulationIt is due to this attribute that the Competition Commission of India has been not been effectively and significantly be able to intervene in regulating such oligopolistic concentrations that are much more crippling in nature.

Thus, the need for regulation is immense in the Indian e-commerce sector given the character of the market. Thus, newer regulations and alterations to the existing ones are the need for the hour. But will the government take cognizant of the e-commerce regulations is it something we’ll have to wait and watch?

 


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regulation of cryptocurrency in india

India Must Regulate Cryptocurrencies in Consumer Interest

By Others No Comments

The Regulation of Cryptocurrency in India

Call it the world’s greatest invention or the contentious asset of worry, you cannot deny the fact that cryptocurrency has wrapped investors around their fingers.

The fancy of the investors is quite justified given the high returns they earn in comparison to other assets in the market. Of all the investors around the world, Indian investors particularly have been largely invested in the concept.

According to the reports, the Indian Crypto asset industry witnessed tremendous, exponential growth over the last five years.

In fact, one can argue that the popularity of the asset had touched such heights, that authorities and great personalities have joined the debate. It is no news that financial literacy in India is mainly a farfetched concept, with many having little to no knowledge about it. But given the statistic, still more than 15 million Indians effectively now hold digital currencies.

Given the humungous support that has been received by the contentious digital asset, cryptocurrencies, like any other financial asset, also need to be regulated.

This needs to be emphatically done to effectively protect consumer welfare and to highly promote innovation as well.

the regulation of cryptocurrency in indiaCertainly, if you are a finance enthusiast or a market spectator, chances are that you know that the government is not particularly kind to the digital member of the financial asset family.

In fact, one can quite rightly describe the government’s demeanor towards cryptocurrency as belligerent.

But even given the central’s tough arduous stance on the digital asset, crypto assets, no matter what, are likely to form the basis of future forms of the internet. In fact, this is quite evident as the world of cryptocurrency in India is growing at an appreciable, astronomical pace.

For the crypto investors, recent weeks have been a roller-coaster ride.

This is due to the fact that the popularity of the crypto comes at a time when New Delhi is specifically aiming to introduce a bill to regulate the asset.

Her, it is worthy of mentioning that experts argue that the crypto market will be the future of the financial sphere in India.

Therefore, one can conclude that India, in future and present terms, is well placed to capitalize on this due to its burgeoning private crypto market. Given the aforementioned argument, it would be extremely unwise to place a ban on private crypto assets.

This will apparently lead to a significant revenue loss to the government. As a matter of fact, if the government even tries to censor the private currency, there are emphatically high chances of clandestine activities to be conducted and to force the nascent industries to operate illegally.

Thus, in lieu of normalcy, it is highly advised that a balanced regulatory approach be followed. It is imperative that the regulatory approach should effectively addresses concerns of money laundering, regulatory certainty, fiscal stability, and investor protection.

This all should be achieved while strategically preserving innovation. This suggestion garners all the importance due to the fact that the financial health of the economy and citizens is not too sound at the moment, any immediate, crippling regulation will certainly lead to financial shock in the economy, something that India can ill afford at the moment.

As a matter of fact, adoption of such a technique should not be an arduous task for the government as most of the aforementioned regulatory necessity to address the policy concerns related to crypto-assets, namely foreign exchange management, investor protection, tax evasion, and money-laundering and tax already exists in the financial legislation. What the need of the hour is the need for adaptation to accommodate an emerging technological paradigm.

Talking about an effective crypto regulatory framework, it should specifically include innovation-friendly, technology-neutral, and consistent to effectively and emphatically harness the full potential of India.

In fact, the prerequisite demand for a consistent, emphasizing framework is that it must lay down clear definitions to strategically and smartly identify the relevant regulatory bodies.

This will systematically help in clearing the ambiguity around the framework structure and operations of the government with respect to crypto. It is no news that in the finance world, one thing that is most certainly detested is uncertainty.

cryptocurrency regulation in indiaThus, clarity on the laws and propaganda of the government is needed. It should also provide crypto asset service providers with safe harbor–protection from liability for the actions of investors on their platform.

Finally, one cannot deny the fact that where there are profits there is avarice for higher incomes and thus a high propensity for conduction of illegal activities.

To address this irregularity or inconsistency, the Government should emphatically adopt a co-regulatory approach.

In the co-regulatory approach, various other regulatory authorities and associations like RBI, SEBI, and the Ministry of Finance should be brought into the picture for sharing responsibility for oversight and regulation.

But is supervision and scrutinization by the regulatory authorities enough? To monitor the private players, incentivizing industry whistleblowing is important.

legal cryptocurrency in indiaThis is necessary as the players within the crypto-market will work to keep a check on each other’s activities, which will emphatically reaffirm the government’s idea of regulation.

Thus, given the aforementioned arguments, it is quite imperative for the government to alter its stance to ban private currency in the market. In order to avoid clandestine, illegal activities, the government will have to be mindful of the investors’ choices and decisions as well.

 


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gst reforms

GST Could See Major Overhaul; Reducing Tax Slabs, Pruning Exempt List on Table

By Economy, Others No Comments

GST Reforms and Tax Exemption

GST is all set for a major overhaul. The government might be contemplating paying greater attention to major GST reforms of the Goods and Services Tax structure.

A great haul is waiting for the GST as the administration will effectively complete its five years in July next year. This will be the year when the state’s compensation will end. Thus, the government is contemplating restructuring tax slabs and reducing exemptions.

According to the reports, the consumer can witness a new system that may be characterized by three major tax rates that can probably cover most of the items for the current four, i.e., 5%, 12%, 18%, and 28%. This will be emphatically done to simplify the structure and generate profits.

The states’ loss of funds

It is to be noted that a feasible plan is being drawn out for the states that would be facing the fall of revenue that they have gathered all these years for their functioning.

Though, it is to be noted that the center will effectively compensate the state for loss of income due to the strategic implementation of the five-year GST. Thus, one can state that the states’ will be significantly worried about the end of this compensation as the states are concerned about a significant reduction in their revenue.

gst collection

In a recent turn of events, the Federal Finance Minister Nirmala Sitharaman “intentionally or unknowingly” had reduced the effective GST-based tax rate from 15.5% to 11.6% of the initial earnings neutrality due to multiple tax cuts since the launch of the GST in July 2017.

 

The plan to strategically renew the revenues of the states

The mere reason for the revision of the tax slabs that have been set up for review is that both the state and center policymakers want to endorse the slab review to address revenue issues that might materialize after the completion of 5 years.

tax exemptionIn order to compensate for the lost revenue, the suggestions and propositions for the inclusion of the list of items for both goods and services that are currently tax-exempt are being explored. Thus, effectively removing the tax exemption list can heavily increase the GST base. This will help not only to increase revenue but also keep the overall tax rate at a reasonable level.

In order to incorporate a less intricate tax system and to increase the revenue for the states, options for effectively merging the 5% and 12% taxes to create one rate are being explored by the authorities.

In fact, exploration of strategic plans to create slab regimes of 18% and 28% of the merged rates are also on the table for discussion.

GST reforms throughout the years, is the loss of revenue a surprise?

GST, according to the experts has been a landmark tax reform. Though, it has come under fire for its prior overestimation of revenue collection which really didn’t materialize.

But during the pandemic, the country saw a substantial increase in the revenues of the state and center, which had worked well for the government’s functioning during the pandemic. but was this increase in GST collection really a perennial source?

The answer is an emphatic no. though the estimated revenue projections have gone down in recent years, during 2021, pent-up demand had effectively led to the whopping collection of GST. On top of that, commodity prices too had resulted in a record increase in GST collections in recent months.

Therefore, the increase in the GST collection wasn’t really a permanent source of income for the state and thus, a certain loss of the same shouldn’t get the government by surprise.

But indefinitely, the loss of revenue will be an issue that needs to be considered. Another implication of such high GST collection is also that covid-related concerns have subsided, and thus consumption demand is increasing.

gst structureMaking the tax system less intricate

Apart from the four major tax slabs aforementioned, 0.25% and 3% effectively apply to jewelry and precious metals. It is no news that the GST web is a complicated one with many commonly used items exempt from GST.

This creates a complex system that is emphatically prone to classification disputes and leaks. According to the report, the GST does not usually tax nearly 150 goods and over 80 services, which leads to humungous complexity in deciphering which articles are exempt and which are not.

Thus, the strategic rationalization of the GST structure is important and the need of the hour and the government can start with the major haul it is preparing.

As aforementioned, the GST collection in recent months had shown promising results. Thus, it might be a good time to simplify the pricing structure. On another note, rationalization is also needed as multiple exemptions, and rates need to converge to two or three pricing structures.

In totality, it is highly recommended that the focus should not be merely or solely on raising the effective tax rate, but on further expanding the tax base. This should be achieved by keeping taxation moderate.

Furthermore, it is to be noted that from a tax policy perspective, it’s emphatically important to remove barriers which are in the form of restrictions on the application of GST based on packaging size, price, capacity, etc., and input credit billing.

Therefore, GST may actually see a large overhaul which will include a reduction of tax slabs, and pruning of the tax exemption list.


Tags: gst collection, gst structure, tax exemption, gst exemption, gst tax system, gst rate structure, exemption under gst, gst tax exemption, gst tax structure

google antitrust case

Google Antitrust Case

By Cases, Others No Comments

What is The Google Antitrust Case?

Another lawsuit awaits Google and its characteristics are quite similar to many that have been enacted against it. According to reports, state attorneys general are emphatically again undertaking the task of going after Google.

Google mainly remains in news for majorly two things. Firstly being the biggest user of user’s data and hence attracting unwanted attention from the legislators and secondly due to its burgeoning power as a search engine which can materialize into something quite unhealthy for its competitors.

Amongst many other times, this time the legislators are behind the search engine with an antitrust lawsuit. This time, legislators argue that the company effectively abused its power over app developers. This has been done through its Play Store on Android.

If the history of antitrust lawsuits against Google is to be scrutinized, the latest case marks the fourth antitrust lawsuit against the giant that has been lodged against the company by the U.S. government enforcers in the period of the past year.

antitrust caseThe latest antitrust case against google mainly focuses on the Play Store, which touches the very essence of Google’s business that is becoming more likely like Apple’s. It is to be noted that the Apple App Store has been battling legal challenges.

It has emphatically drawn lawmakers to question whether Apple unfairly charges its developers for payments. Additionally, allegations have been raised that whether it favors its own apps much moreover those of its rivals.

The case- anticompetitive tactics

Various allegations have been made against Google, the gravest of which states that it has emphatically and effectively used anticompetitive tactics.

According to the charge sheet, anti-competitive tactics have been used to extract almost up to 20 percent commission from consumers. It sits to be noted that these are those customers who particularly purchase digital content and subscriptions on their Android phones.

It has been pointed out that the biggest discrepancy lies in the fact that the app developers are forced to use Google’s software for distribution as they do not have much choice.

lawsuits against google

This has been mainly due to the fact that in part Google has emphatically targeted potentially competing for app stores. Meanwhile, if the story of the consumer’s side is to be scrutinized, it has been stated that consumers have fewer or options as Android is the only operating system that is available on many handsets.

According to the statistics, Google Play Store largely distributes over 90% of Android apps in the U.S. Thus, it can be deciphered that no other Android store has even over 5 percent of the market share.

Such a claim can be corroborated by the fact that even the plaintiffs in the case have alleged it. In fact, in a recent turn of events, Samsung, the largest and the top manufacturer of Android phones too was roped in.

Plaintiffs have maintained that Google has arduously tried to “buy off” the Samsung company by enticingly offering many incentives to turn its Galaxy app store into an effective “white label” for its Play Store.

It is to be noted here that similar cases in the past have occurred too. Alleging, Google had also tried and thwarted past efforts by Amazon to effectively and significantly use its own distribution store on Android.

Thus, given all the aforementioned discrepancies that have been analyzed and have been brought to the table, it can be stated that Google’s durable monopoly power specifically in the markets pertaining to in-app purchases and Android app distribution is not quite based on competition on the merits.

This, consequently means that such monopoly has been maintained or rather has been created through artificial technological conditions. In addition to technological conditions, Google has also made effective use of contractual conditions it has invariably imposed on the Android ecosystem.

google lawsuitGoogle’s defense

In Google’s defense, it has been stated by its representatives that they find it quite incongruous that state attorneys general have particularly chosen to file a lawsuit against a system that actually provides more choice and openness than any other players in the market. Thus, the recent lawsuit has been dismissed on the ground of being considered meritless.

But is the latest lawsuit the only one being carried out against google at the moment? No. it is to be noted that Google is fighting the battle on two fronts. The other battleground consists of the lawsuit from the Department of Justice and several states.

In the other lawsuit, it has been alleged that Google has exclusionary contracts to effectively ensure the prominent default status for its apps on various devices. These exclusionary contracts have been drawn from manufacturers that have particularly used its Android mobile operating system.

In fact, it may come as a surprise to many, but another lawsuit, this time by a group of Republican attorneys, has been ongoing that effectively focuses on Google’s advertising technology business.

This has also alleged that Google has entered an anticompetitive agreement with another social media giant namely Facebook.

But what makes the latest lawsuit quite striking for the plaintiffs to go after Google? It is to be noted that great harm is being inflicted on the consumers due to a lack of innovation.

Given the monopoly status that Google is enjoying, it has absolutely no incentive to offer a better service to its customers.

It is no news that healthy competition fosters great innovation that is needed for the welfare of the customers, but in the current scenario, Google is sacrificing both at the altar of the monopoly that it is relishing. It is also mainly due to the fact that no other app stores and developers particularly have channels available to reach the public.

Thus, with the latest lawsuit, will the competition be restored in the domain, and can will the plaintiffs be able to prevent Google from engaging in similar conduct in the future? Perhaps we’ll have to wait and watch.


Tags: antitrust case, google antitrust, lawsuits against google, antitrust lawsuits against google, antitrust lawsuit, antitrust case against google, google lawsuit, google antitrust lawsuit, google antitrust suit

global minimum tax

Global Minimum Tax: A Blessing or a Curse?

By Economy, Others No Comments

Explaining The Global Minimum Tax System

The global Tax system has been a hot topic for the countries for years, so much so, that the group of Seven nations, namely, France, Italy, Canada, Germany, Japan, the United Kingdom, and the United States, effectively agreed on 2021 to promote a new global tax regime.

It is to be noted that the newer global tax regime would help solve the twin goals of the tax scheme. Firstly, to effectively make large transnational corporations and companies pay more tax while operating in tax havens or where they conduct their economic activities, and secondly to severely mitigate the attractiveness of tax havens for the multinational companies in pursuit to escape paying taxes.

The need for such a tax regime to mitigate the attractiveness of the tax havens is due to the fact that transnationals effectively often try to establish their tax homes in countries with low corporate income tax rates, in order to escape the high tax regimes in their own countries.

Thus, the proposed tax regime will help in transferring transnational companies’ profits from their home countries to the countries in which they make sales.

Additionally, it is to be noted that the newer tax regime will emphatically help set a global minimum tax rate of 15% for companies and multinationals all around the world.

global tax regimeIt is worth noting here that the newer global tax regime is being pushed forward by wealthy economies that have systematically agreed to the global minimum tax proposal. These include the G7 and G20 members that are particularly wary of seeing profits made within their borders going untaxed or escaping the grasp of western tax systems.

To talk about the monetary loss that is accruing to western countries due to operations of multinationals through safe havens stands at a whopping $500 billion, which is effectively lost in revenue each year. This corroborates the fact that the western economies are quite inclined toward restoring their lost profits over the decades.

The full story?

This gives rise to a pertinent question is the problem of a non-existential global tax system only limited to monetary losses for the counties? Perhaps, there is more to the story than what meets the eye.

It is to be noted that of the annual revenue that is lost to tax havens, around $200 billion is lost by less-developed countries as well.

global minimum corporate taxDeveloping countries: a boon or curse?

Given the fact that even underdeveloped countries have much to lose, will these countries join the race to mitigate such discrepancies? Not quite amicably.

This is due to the fact that various tax havens like the Cayman Islands would continue to offer enough incentives and exemptions to effectively and emphatically retain investments in its economy, which are needed to drive its economic growth.

Thus, such practices will be prevalent even if the government will adhere to an international minimum rate. Thus, this will significantly lead to the reduced effect of a minimum tax regime being crafted by the wealthier countries.

But given the incentive of the less developed countries do not to adhere to the global minimum tax, the more important question that arises is whether joining the race makes any sense for less-developed countries?

Though, according to the reports, there is effectively no guarantee that a global minimum rate of 15% would anyway shift investments from current tax havens to less-developed countries. Thus, the developed county’s proposal may partially bear fruits.

Though, the developing economies cannot be chastised or criticized for not adhering to the regime as they face enormous pressures to attract foreign capital for growth. Thus, they effectively cannot be faulted for this desire.

Though, it is to be noted that though finance might seem like the most viable and tantalizing option to grow, more effectively basic infrastructure, sound fiscal policies, and conditions, stable government, etc. play a larger role.

global corporate taxThus, if the larger implication of the global minimum tax policy is to be scrutinized, it can be stated that it will at least contribute to the process of elimination of the temptation for other less-developed countries to systematically join the race to the bottom. In fact, according to the reports, we might even encounter beneficial changes in policies in the current tax havens.

Thus, given the aforementioned arguments, one can effectively argue that the minimum tax regime will bore well for the developed countries in order to attain its lost revenues but for the developing economies, the answer remains more complicated.

With the tantalizing benefits of investments in the economy that are presented to the developing countries, it is quite arduous to make a stance about the feasibility of the global minimum tax regime. With much more to lose, in terms of infrastructure, revenues, labor utility, etc. one can argue that the case for the developing countries is quite delicate and complex.

Thus, in totality, it can be maintained that the minimum tax regime has immense advantages for some well not much for others. Thus, it is a boon for the developed countries but for undeveloped countries, it is too soon to tell.


Tags: global tax regime, global tax, global minimum corporate tax, international tax, global corporate tax, g7 global tax, world tax, minimum global tax, global minimum tax deal, global tax system

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