.

Unique Characteristics of Due Diligence in India

Key Considerations When Conducting Regulatory Due Diligence in India

P.04

P.06

Pre-Investment Due Diligence in India

P.08

P.11

Navigating HR Due Diligence in India

Case Study: Sidestepping Due Diligence, Uber Exposes its Liabilities

www.india-briefing.com

Issue 31 • May 2016

From Dezan Shira & Associates

India’s economy has been averaging a steady seven percent growth over the past few years.

Amid the declining optimism among other emerging economics, India’s outlook remains

positive. The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government

has introduced a multitude of economic programs since 2014. Make in India remains the flagship

initiative, while all other development programs seek to complement it. The International

Monetary Fund (IMF) projects an optimistic 7.5 percent growth rate for India in the fiscal year

of 2016-2017 – up from 7.3 percent in 2015-2016.

India has replaced China as the top location for foreign direct investment (FDI) by attracting U.S.

$63 billion worth of FDI projects in 2015 with FDI increasing by 30-40 percent in the past two

years, according to Finance Minister Arjun Jaitley. However, while India represents a promising

future as an emerging market, it has various regulatory and tax issues that strongly contrast

with other emerging economies. Red tape and bureaucracy can further contribute to delays,

adding roadblocks to a company’s growth. In such a market, it is imperative for companies to

conduct due diligence to safeguard their assets and reputation.

In this issue of India Briefing Magazine, we examine issues related to pre-investment due

diligence in India. We highlight the different regulatory, tax, and socio-economic issues that

a company should be aware of before entering the Indian market. We also detail some of the

topics related to entry structures while investing in the Indian market, as well as cultural and

HR due diligence, which may differ from state to state.

Foreign companies should be quick to notice the various idiosyncrasies of India’s laws and

regulations; this India Briefing Magazine aims to prepare and guide companies to mitigate

such issues.

This Month’s Cover Art

Shampa Sircar DasTransformation

Acrylic on canvas, 36x36 Art Konsult

info@artkonsult.com+91-11-65683083

artgallery.artkonsult.com

For queries regarding the content of this magazine, please contact: editor@asiabriefing.comAll materials and contents © 2016 Asia Briefing Ltd.

ReferenceIndia Briefing and related titles are produced by Asia Briefing Ltd., a wholly owned subsidiary of Dezan Shira Group.

Content is provided by Dezan Shira & Associates. No liability may be accepted for any of the contents of this publication. Readers are strongly advised to seek professional advice when actively looking to implement suggestions made within this publication.

Introduction

With kind regards,

Adam Livermore

Adam LivermorePartner

Dezan Shira & Associates

ASIA BRIEFINGwww.asiabriefing.com www.aseanbriefing.com

VIETNAM BRIEFINGwww.vietnam-briefing.comwww.dezshira.com

www.china-briefing.com

CreditsPublisher / Chris Devonshire-EllisManaging Editor / Samuel WrestEditors / Melissa Cyrill, Pritesh Samuel & Siddhartha ThyagarajanDesign / Jessica Huang & Belén RodríguezDesign Assistant / Kking Lu & Baaria Chaudhary

Table of Contents

Unique Characteristics of Due Diligence in India

Key Considerations When Conducting Regulatory Due Diligence in India

Navigating HR Due Diligence in India

Case Study: Sidestepping Due Diligence, Uber Exposes its Liabilities

P.04

P.06

P.08

P.11This Issue’s Topic

Pre-Investment Due Diligence in India

Online Resources on Emerging Asia

An Introduction to Doing Business in India

How to Establish a Business in India: Choosing aLow-Risk Entry Model

Walmart’s Bribery Scandal Shows Legal, ReputationalRisks in India

Land Acquisition May become Easier in India, but Risks Remain

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Horizon for 2017

4

Unique Characteristics of Due Diligence in IndiaBy: Dezan Shira & Associates

Editor: Siddhartha Thyagarajan

Due diligence essentially performs a Strengths-

Weaknesses-Opportunities-Threats (SWOT) analysis

of possible business opportunities. It involves the

holistic assessment of a business opportunity

undertaken by interested parties in the business,

including prospective buyers and partners. The

activity entails an assessment of all relevant

business information, such as assets and liabilities

in the company’s past and present, and evaluate

the financials of the business.

A SWOT analysis in India is tailored according

to the specific requirements of interested

parties. The companies interested in the due

diligence examination compile a checklist of

required information. This information may be

accessible through the records at Indian public

(government) offices, and in some scenarios, the

involved companies may need to provide specific

information that is unavailable publically. In

addition, business plans and other documents such

as payroll data and employment contracts are also

reviewed if deemed necessary by the interested

parties. Due diligence of a wider scope often also

involves procuring information from external

sources, including customers, suppliers, industry

experts, and market research firms.

Due diligence reveals considerable information

about possible business opportunities. However, it

does not reveal all information related to a business

opportunity. The purpose of due diligence is not

to learn everything about a business, but rather to

learn enough to assess the business opportunity

credibly. Due diligence thus becomes a tool to

mitigate risks and to aid sound decision making.

Due diligence in IndiaIndia presents a complex economic, regulatory, and

legal landscape for doing business. Consequently,

the success of a business venture in India is

dependent on a company’s ability to traverse the

Indian business landscape. A company’s success

is in turn linked to the risk management and

mitigation strategy that it undertakes. It is in this

regard that due diligence becomes a powerful

tool that companies may utilize when dealing with

Indian businesses. Due diligence ensures that a

company is able to manage the risk prior to entering

into a business transaction.

Companies should conduct due diligence primarily

for two reasons:

• A company that plans to trade with an Indian

company should verify that the business is

what it appears to be. This is vital in India, where

several companies sprout up every day with the

sole motive of duping prospective clients and

businesses. For example, in April 2016, pretend

chit-fund companies (institutions which promote

Professional Services

Dezan Shira & Associates is able to produce reports on regulatory and market updates for industries across states in India. For more information, please contact us at india@dezshira.com

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5

Issue 31 · May 2016 · IndIa BrIefIng

low interest rates and lend money for houses and

other purchases) were found to have cheated

depositors out of U.S. $12.2 billion (Rs 800 billion).

This indicates a mala fide intent in the transaction,

and while such cases might be easier to identify

in the preliminary stages of due diligence, some

scenarios require more in-depth exploration of the

business.

• The scenarios that require extended due diligence

include identifying potential “deal destroyers”. This

involves studying Indian companies’ financial

health, including their track record of bill payment,

their creditworthiness, and their standards of

compliance to national and international regulatory

and statutory requirements. Due diligence of this

nature is particularly important in India, where the

tax regime is extremely fragmented and companies

often deal with business entities from other states

within India that have different payment norms

and taxes.

A company that wants to collaborate with an Indian

company often needs to perform extensive due

diligence in comparison to trading with one. The

nature of the transaction while trading, including

selling and purchasing goods and services, acts as an

inherent check on the risks. This requires that a foreign

company undertake all aspects of due diligence

required for trading with Indian companies, such

as a thorough assessment of legal scope to check

compatibility. In addition, companies should procure

information that aids in the valuation of assets and

in negotiating price concessions. Finally, the due

diligence should verify that the proposed business

transaction complies with the mandated investment

and acquisition criteria.

The process of conducting due diligence in different

countries differs significantly, though they seek to

achieve very similar ends.

Independent reports note that countries that are more

developed on average tend to have less corruption

and more transparency, which makes it easier to verify

information that is found. In turn, the presence of

multiple government offices, which also act as public

offices of records, make information easily accessible

to a business that wishes to conduct due diligence.

However, another factor that is intricately linked to the

accessibility of information is the efficiency of such

offices in maintaining information records. This is

dependent on the archiving and filing processes that

such offices follow, as well as the level of digitization

of records that they have undertaken. Developed

countries often have an excellent record of

accomplishment on the aforementioned parameters

as they have access to superior IT infrastructure.

However, pushing towards digitization with

government initiatives such as ‘Digital India’ will help

India close the gap in terms of procuring and providing

vital information digitally.

RegulatoryIn an emerging market like India,regulations are fast-changing, making it imperative for companies to stay on top of laws to protect themselves.

InfrastructureThe level of infrastructure development is widely uneven in India. Tier I cities o�er the best infrastructure, compared to Tier II cities and rural areas.

LanguageAlthough English is the spoken language of business in India, �uency should not be taken for granted. While India has 22 o�cial languages, there are also thousands of non-o�cial ones, and it is hugely important that foreign managers be aware of how their sta� communicate.

CasteIndia has a caste system – a religious system of social strati�cation based on birth – which can a�ect how employees interact with each other.

Cultural normsIndia di�ers vastly from state to state. Each group of people maintain their own traditions, which permeates into corporate culture. Companies must be aware of such issues to ensure productivity.

SecurityIndia is big – each state has its own issues regarding law and security. India’s security landscape is diverse. Central and eastern India both have high security risk compared to places like Leh, where risk is comparatively low.

DUE DILIGENCE CONSIDERATIONSIN INDIA AT A GLANCEIndia topped China in terms of FDI investment in 2015, at U.S. $63 billion, but a host of unique factors exist for foreign investors to consider during the due diligence process.

Oarnings+Other Capital)(excluding, amount remitted through RBI’s

NRI Schemes)

RS. 2,759,378 Crore RS. 1,424,067 Crore

US$ 408,676 Million US$ 227,954 Million

6

Key Considerations when Conducting Regulatory Due Diligence in India By Dezan Shira & Associates

Editor: Pritesh Samuel

Companies determining their market entry strategy

in India should be aware of regulations related to

foreign direct investment (FDI), foreign exchange,

security and corporate law, as well as direct and

indirect taxes. Regulatory clearances can take a

long time to obtain as several clarifications may

be required before final approval by central and

state authorities.

A company entering the Indian market must ensure

that it is in compliance with the Companies Act,

2013, and the Companies Act, 1956, as well as other

acts related to the Securities and Exchange Board

of India (SEBI), if it is listed. Under the Companies

Act, several forms are required to be submitted to

the Ministry of Corporate Affairs.

Depending on the type of company, registration

with various departments and compliance with

their individual provisions is also required. For

example, labor and human resource related

registration may require establishing a provident

fund (social security) to be in compliance. Additional

registration, such as Import Export Codes, may also

be needed.

FDICompanies must ensure that they are in compliance

with the relevant FDI laws to avoid government

censure. India offers two routes for FDI: the

automatic route (does not require pre-approval

by the government) and the government approval

route.

The Indian government recently expanded foreign

investment allowed under the automatic route

in certain sectors, in some instances up to even

100 percent. If FDI exceeds the prescribed limit in

a sector, automatic approval can convert to the

government approval route.

Foreign ExchangeForeign exchange is governed by the Foreign

Exchange Management Act (FEMA), which replaces

the Foreign Exchange Regulation Act (FERA).

The act is aimed at making external trade and

payments easier as part of the country’s economic

liberalization in the 1990s. The highest authority

regulating the law related to foreign exchange is

the Reserve Bank of India (RBI).

Corporate Law Companies must also be aware of corporate laws

in the country, which are mainly governed by

the Companies Act, 2015. The Companies Act

discusses laws related to mergers and acquisitions,

board room decision making, party transactions,

corporate social responsibility, and shareholding.

Foreign companies must carefully consider their

options for investment in India and the available

avenues for establishing a business presence. In the

graphic to the right, we outline the main investment

structures, relevant forms of taxation, and locations

for investment, all of which should form part of a

company’s due diligence process.

7

Issue 31 · May 2016 · IndIa BrIefIng

REGULATORY DUE DILIGENCE IN INDIA: WHAT A FOREIGN COMPANY SHOULD BE AWARE OF

Branch/Project O�ce/Liaison O�ce or Permanent Establishment: The �xed place of business is treated as a permanent establishment and is required to pay tax at 40 percent+surcharge+education tax.

Service Tax: This tax is paid on the values of services provided. Service tax is 14.5 percent with e�ect from June 1, 2016 (it is currently 14 percent).

Minimum Alternate Tax (MAT): This is 18.5 percent+surcharge+education cess. Indian tax law requires MAT to be paid by corporations in cases where the tax payable according to the regular tax provisions is less than 18.5 percent of their book pro�ts.

Limited Liability Partnership (LLPs): LLPs are required to pay tax at 30 percent+surcharge+education tax.

Customs Duty: This is levied on import and export of goods.

Central Sales Tax (CST): CST is levied on goods that are sold from one state to another within India. The buyer has to declare this in a form to the seller.

Wealth Tax: This is levied on some assets owned by an individual or company. The rate of wealth tax is one percent of the value of net assets after deducting the value of exempted assets and liabilities.

Company: A company incorporated in India is required to pay 30 percent tax+surcharge+education tax+dividend tax on net income earned.

$

WHERE TO INVEST

Sector: Di�erent sectors are subject to di�erent sets of regulations, which will signi�cantly impact howan investment is structured. Currently, Banking, Infrastructure, Railways, Defense, Automobile, Medical Devices & Healthcare, are some of the hot industries to invest in, but this can quickly change.

Land: Acquiring land for a manufacturing facility can be complex and time-consuming. Landowners are typically hesitant to sell due to the potential for future price appreciation. Despite the passage of a new Act in 2013, media sources report that nearly U.S. $300 billion in projects remain stalled partly because of current land acquisition regulations.

Location: Due diligence necessitates that companies assess the region’s demographics, infrastructure, security, order, land availability, supply chains, competition present, and laws and taxes, among other issues.

Central Excise: The Central Excise tax is levied on the production value of goods. Excise duty needs to be paid before the product is moved out of the factory.

Note: In addition to the above, companies must also be aware of state and local taxes, which di�er according to the area where the business is set up.

Other Structures: Foreign investment or contributions in other structures, such as not for pro�t companies, are also subject to the provisions of the Foreign Contribution Regulation Act, 2010.

Joint Venture (JV): An alliance is set up with an Indian partner. There are no separate laws for joint ventures. Companies must be incorporated and will be treated as a domestic company subject to Indian laws and regulations.

Wholly Owned Subsidiaries:Foreign investors can establish wholly owned subsidiary companies (WOS) in the form of private limited companies if they operate in sectors that permit 100 percent FDI.

Extension of Foreign Entity: Can be a Liaison O�ce, Branch O�ce (BO), or Project O�ce (PO). These o�ces can undertake only the activities speci�ed by the RBI.

Sole Proprietorship/Partnership: This entity is subject to the RBI’s approval in consultation with the Government of India.

Limited Liability Partnerships (LLPs):LLPs are simple, have tax advantages, and are easier to exit the market than WOSs.

CHOOSING AN INVESTMENT VEHICLE

TAXES

8

Navigating HR Due Diligence in IndiaBy Dezan Shira & Associates

Editor: Melissa Cyrill

Foreign companies entering the Indian market

cannot fail to note the potential of the country’s

large and diversified labor pool. India is currently

coming into a unique demographic dividend

and has a high working age population, while

accelerated economic growth has increased

the demand for skilled manpower. However, it

is essential for foreign companies to conduct

thorough due diligence when navigating the

country’s human resource (HR) environment, which

is filled with a myriad of considerations that do not

exist in other emerging economies.

Typically considered a ‘soft’ concern, HR due

diligence has an expanded scope in India. It

constitutes understanding the country’s system of

employment contracts, labor laws, labor relations,

regulatory policies, work culture, and industry

standards. Identity markers such as class, caste,

gender, ideology, religion, and tribe, amongst

others, greatly influence labor relations in any of

India’s distinct regions and must be fully understood

prior to market entry.

Paying attention to HR due diligence safeguards a

venture from both operational and financial risks.

Operational risks include a high employee turnover

rate, problematic labor relations, and differences over

work culture. Firms entering India must safeguard

against risks while hiring employees, particularly in

senior positions. Conducting HR due diligence may

reveal prospective candidates to have committed

fraud (in terms of inflating their CVs, educational

qualifications, previous salary structure, and omission of

recorded instances of previous misconduct). Financial

risks involve more specific costs, including the human

resource related run-rate costs of the target company,

financial obligations of starting fresh operations or the

prospective transaction, and lack of funds for benefit

plans.

Employment Contracts and Labor LawsLabor laws in India provide for a minimum of guarantees

and benefits to all employees that can supersede the

provisions of labor contracts. For example, a termination

policy outlined within the contract should be verified

against the current law prior to it being carried out. In

India, companies that employ more than 100 workers

need the government’s permission to conduct layoffs.

There are three types of employment contracts in

India – permanent (direct) contracts, fixed contracts,

and temporary contracts. Besides company rules and

regulations, employers are advised to incorporate the

following clauses into contracts – non-disclosure,

employee poaching, unfair competition, trademarks,

patents and trade secrets.

Labor laws in India apply according to the category

into which an employee falls. Employees may be

divided into two broad categories:

• Managerial Personnel – These are employees

who perform managerial, administrative, and

9

Issue 31 · May 2016 · IndIa BrIefIng

supervisory functions. They are governed by

the terms and conditions of their contracts of

employment, service rules, and agreements as

negotiated with their employer, and enjoy less

protection from existing labor laws as compared

to the ‘workmen’ category.

• Workmen – These are employees who perform

non-supervisory duties, which include manual,

unskilled, technical operations, and clerical work.

Workmen are specifically provided with various

protections, social security measures, and benefits

and amenities through the country’s labor laws.

Trade UnionsIndia’s trade union movement is rooted in the country’s

early acceptance of a mixed economy – incorporating

both socialist and capitalist systems. According to

the law, where the number of blue-collar workers at

a location exceeds seven, they are entitled to form

a union to improve their ability to negotiate the

remuneration and other terms of employment.

All unions in India are tracked by the Labour Bureau,

Ministry of Labour and are regulated by the Trade

Union Act (1926).

Labor Laws In India

Employment

Contract Labor (Regulation And Abolition) Act, 1970Designed to regulate the employment of contract laborers. Applies to organizations with 20 or more employees.

Industrial Relations

The Trade Unions Act, 1926 Contains rules on governance and general rights of trade unions.

The Industrial Employment (Standing Orders)Act, 1946Provides a standard model of service conditions for employees. Applies to all establishments with 50 or more workmen employees.

Shops and Establishment ActDesigned to regulate employee wages, hours of work, leave holidays, and terms of service. Each state has its own version of the Act.

The Industrial Disputes Act, 1947Provides the machinery and procedure for the investigation and settlement of industrial disputes by negotiations. The Act applies only to the organized sector.

Indian Factories Act, 1948 Designed to regulate working conditions in factories.

Wages

The Payment Of Wages Act, 1936;The Payment of Wages Rules, 1937;The Payment of Wages (Amendment)Act, 2005

Designed to regulate the payment of wages to employees. Stipulates the wage periods, time, and mode of payment of wages.

The Minimum Wages Act, 1948;The Minimum Wages (Central)Rules, 1950

Sets minimum wage levels that must be paid to skilled and unskilled workers.

The Payment Of Bonus Act, 1965; The Payment of Bonus Rules, 1970

Governs bonus payments. Seeks to provide employees a share in the profits of a company. Applies to a workplace with 20 or more employees.

Equal Remuneration Act, 1976 Provides for the payment of equal wages to men and women employees.

Health, Safety, and Social Security

Workmen Compensation Act, 1923 Regulates employee compensation for injury by accident during employment.

The Employees State Insurance Act, 1948 Regulates employee compensation for injury by accident during employment.

The Employees’ Provident Fund & Miscellaneous Provisions Act,1952; The Employees’ Provident Fund & Miscellaneous Provisions (Amendment) Act, 1996

Mandate the provision of the provident fund, pension fund, and deposit-linked insurance fund. Applies to establishments with 20 or more employees.

The Payment Of Gratuity Act, 1972Mandates a gratuity payment to employees in a company with ten or more people and applies to all employees regardless of salary.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Maintains that during an inquiry following a written request, an internal committee may recommend to transfer the aggrieved woman to any other workplace/grant leave of up to three months/grant other compensation.

10

IndIa BrIefIng · Issue 31 · May 2016

The latest data, released for 2012, showed an

estimated 16,154 trade unions in India, with a

combined membership of 9.18 million.

Trade unions at the firm or industry level are

often affiliated to larger federations. The largest

federations are at the national level and are called

the Central Trade Union Organizations (CTUO).

Companies should also note the significance of the

particular political and ideological affiliations of the

trade union(s) to which their employees belong.

Work Culture In India, the workplace set up is often hierarchical

with clear boundaries between management

levels. The country ’s business etiquette is a

combination of Western and Eastern practices,

but local customs do permeate relationships.

These need to be acknowledged for successful

business interactions. For instance, when giving

feedback, an understanding of honor-shame

becomes important in the Indian context, which

can otherwise be inadvertently interpreted as

unconstructive criticism.

Appealing to a person’s honor and being respectful

of each other’s roles and expertise is also important

when beginning a discussion or conducting

business with an Indian colleague or associate. Even

the traditional greeting ‘namaste’ – loosely translates

to “I bow to the divine in you” – representing a

cultural nuance that should be borne in mind.

Due Diligence Checks for Business IntegrationAside from country-specific considerations, there

are several critical HR due diligence checks that

need to be performed if a foreign company is

looking to establish a JV, a business alliance, or

secure an M&A. Such checks help discover hidden

liabilities while integrating business operations,

and include:

• HR Policies and Governance, Talent M a n a g e m e n t , a n d E m p l o y m e n t Demographics – These inform the HR

organizational design, identify the top levels

of management, assessment of critical players,

deployment of appropriate resources, retention

of key people, and communications strategy

development. It is also necessary to examine

any trade union associations and collective

bargaining mechanisms of the employment

personnel.

• Compensation Structure of the Target Company – This is one of the biggest costs

incurred while conducting business. It typically

comprises a base salary, an annual incentive

and/or a long-term incentive. The change in

ownership may result in the acceleration of

payment of severance packages, and establishing

their timing and who will bear the financial

responsibility are key functions of the due

diligence process. Firms will have to agree on

the expatriate cost sharing arrangement, if

applicable.

• Benefit Plans of the Target Company – To avoid

differences on funding requirements, it is

important to agree on the company’s respective

benefit policies such as retirement benefits/

pension funds (minimum contributions v. stable

yearly amount), leave encashment, medical

insurance, etc.

Recognized Central Trade Union Organizations (Alphabetical Order, Verified 2008)

Trade Union Affiliated Political Party

All India Central Council of Trade UnionsCommunist Party of India (Marxist-Leninist Liberation)

All India Trade Union Congress Communist Party of India

All India United Trade Union Centre Socialist Unity Centre of India (Communist)

Bharatiya Mazdoor SanghRashtriya Swayamsevak Sangh (indirectly the Bharatiya Janata Party)

Centre of Indian Trade Unions Communist Party of India (Marxist)

Hind Mazdoor Sabha Unaffiliated

Indian National Trade Union Congress Indian National Congress

Labour Progressive Federation Dravida Munnetra Kazhagam

National Front of Indian Trade Unions Unaffiliated

Self Employed Women's Association Unaffiliated

Trade Union Coordination Committee All India Forward Bloc

United Trade Union Congress Revolutionary Socialist Party

11

When Uber began India operations in September

2013, the company rode a wave of positive

customer reviews and glowing media exposes. Tech

savvy consumers happily abandoned unreliable

municipal and radio taxi services; Uber quickly

expanded to eleven cities across India, growing at

an average of 35 to 40 percent a month. Indeed,

Uber grew so rapidly that it struggled to contract

enough drivers – the company began training

inexperienced drivers and even provided individual

loans for drivers to buy vehicles. However, such

issues caught up with the company. The absence

of modern e-commerce regulations, high levels of

demand, and a misunderstanding of rule of law

unearthed Uber’s lack of due diligence in India.

Uber’s problems started on December 5, 2014,

when an Uber-contracted driver sexually assaulted

a female passenger in Delhi. Within days, the media,

public, and government turned hostile to Uber.

While the taxi company had successfully managed

similar incidents in Western countries, Uber learned

that their liabilities in India were more extensive

than they imagined. The Delhi government swiftly

banned Uber and other app-based taxi providers

from operating in the National Capital Region

(NCR) three days after the sexual assault. The federal

government’s Home Minister swiftly advised state

governments across the country to ban app-based

taxi services. Media outrage against Uber didn’t help

and word spread that Uber was unsafe.

Uber suspended its Delhi operations indefinitely

from December 11. Instead of consolidating and

expanding its share of the U.S. $8 billion private

taxi market in India – which is expected to grow

at least U.S. $15 billion in the next five years – Uber

incurred significant losses with cab drivers off the

roads but still on the company’s payroll. Whether

it is because of ignorance, or a bull-headed zeal for

disruptive innovation, Uber sidestepped regulatory

and tax laws that threatened to reshape its business

model in India.

Uber learnt that India was a different and challenging

market to cater to as compared to other markets it

operates in. India was a country of many firsts for

Uber. It made several changes to its business model,

including taking cash and taking payments through

a digital wallet rather than credit cards.

In an emerging market like India, any company,

regardless of the industry, needs to conduct due

diligence and evaluate their liabilities during the

pre-investment phase, or else risk losing business

or be forced to exit the market. While Uber was able

to come back into the Indian market, others might

be unable to do so.

CASE STUDY

Sidestepping Due Diligence, Uber Exposes its LiabilitiesContributors: Adam Pitman & Pritesh Samuel

Pritesh SamuelManager, Business Intelligence

Dezan Shira & AssociatesDelhi Office

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