Database

In 2015, India’s Ministry of Electronics and Information Technology (MEITY) issued guidelines for a cloud computing empanelment process under which cloud computing service providers may be provisionally accredited as eligible for government procurements of cloud services. The guidelines require such providers to store all data in India to qualify for the accreditation.

Government employees may only use governmental email services for official communications, and cannot provide details of their governmental email account to private e-mail service providers.

The regulation gives preference to domestically manufactured telecommunication products, in procurement of those telecommunication products which have security implications for the country and in Government procurement for its own use, consistent with World Trade Organization (WTO) commitments. The regulation imposes to notify specific guidelines for according preference to domestically manufactured telecommunication equipment and products either for reasons of security or for government procurement in accordance with relevant government decisions and policies in this regard.

The Preferential Market Access (PMA) Policy provides that domestically manufactured equipment receives preferences in government procurement and in some types of private sector procurement. The underlying objectives are India’s goals to expand its domestic manufacturing capacity and to protect the security of its telecommunications networks. India revised the PMA in December 2013, but the revised policy continues to require that domestically manufactured goods constitute a certain percentage of the electronic products procured by government entities.

The Notification stipulates that each Ministry or Department will satisfy a minimum percentage of their telecom product demand with local products which fulfil the minimum value addition prescribed for each item. The preferential market access for domestically manufactured IT products in the first two periods (2012-2013 & 2013-2014) ranged from 50% to 100%, while the percentage value addition required for the products to be classified as domestically manufactured ranged from 25% to 45%. Both, the preferential market access quota and the requirements for the domestic value added, increase every year as specified in the Notification. The list of products as well as value addition for each product will be subject to a periodic review by the Department of Telecommunications.

The electronic products notified for providing preference to domestic manufacturers are: desktop PCs, dot matrix printers, tablet PCs, laptop PCs, contact smart cards, contactless smart cards, LED products, biometric access control/authentication devices, biometric finger print sensors, biometric iris sensors.

India's "Public Procurement Policy for Micro and Small Enterprises (MSEs)" states that the Central Government Ministries, Departments and Public Sector Undertakings shall procure a minimum of 20% of their annual value of goods or services from micro and small enterprises.

It is reported that, apart from high and sometimes unbound import tariffs (see tariff chapter), additional taxes compound to create an environment where the market share of authorized hardware and software is only a fraction of what it would be under less restrictive market conditions.

Foreign companies (including those relating to B2B, B2C ecommerce, data interchange and other digital supply transactions, web based marketing, database services, online services such as telemarketing, telecommuting, telemedicine, education and information research and all related data communication services) even when not incorporated in India should register in India according to section 2(42) of the new Companies Act of 2013 when they are engaged in business in the country.

Moreover, it is reported that foreign companies that have a Permanent Establishment or Branch/Project Office in India are taxable at the higher basic rate of 40% which, with applicable surcharge and education cess, results in a rate up to 43.26%. The basic tax rate for an Indian company is 30% which, with applicable surcharge and education cess, results in a rate up to 34.61%. It has also been proposed that the basic corporate tax rate will be reduced from 30% to 25% over four years, starting from the financial year 2016-17.

Complaints registered in 2015 noted that software products in India are subject to double-taxation. In India, anything intangible is classified as a service for the purpose of levying a direct or indirect tax. However, software products are classified as goods in India. Government officials levy a 12.36% service tax on income of most product software, coupled with a 4-5% VAT, depending on the state. The double taxation effect is currently prompting many Indian-based companies to shift their registered offices overseas.

It is reported that, apart from high and sometimes unbound import tariffs (see tariff chapter), additional taxes compound to create an environment where the market share of authorized hardware and software is only a fraction of what it would be under less restrictive market conditions.

Complaints registered in 2015 noted that software products in India are subject to double-taxation. In India, anything intangible is classified as a service for the purpose of levying a direct or indirect tax. However, software products are classified as goods in India. Government officials levy a 12.36% service tax on income of most product software, coupled with a 4-5% VAT, depending on the state. The double taxation effect is currently prompting many Indian-based companies to shift their registered offices overseas.

The duty imposed on imports originating in or exported from China ranges between 37.73% and 86.59% of the Cost, Insurance and Freigh (CIF) value of imports depending on the company in question, although some companies are exempted from this duty. The duty imposed on imports originating in or exported from Israel is 9.42% or 86.59% of the CIF value of imports. Some companies are also exempted from this duty. This definitive duty is effective for a period of five years.

Duties amount to 1.22 USD per item, at the exception of the comapnies Ningbo Deli Electronic Development Co., Ltd. and Fujian Kayfung Electronic Co., Ltd. whose exports are subject to a duty of USD 0.28 and USD 0.79 per item respectively. Moreover, the company Casio Electronic Technology is not subject to the payment of any duty. This definitive duty is effective for a period of five years.

Duties range from USD 2.48 to 3.87 per kg.

Duties range from USD 1.99 to 2.13 per kg for Chinese exporters and are at 1.29 USD per kg for Taiwanese exporters.

Duties range from USD 4.87 to USD 5.81 per sqm depending on the company.