India corrects error in mislabeling local firm as China-based
CNANEW DELHI--India has finally corrected an error in its labeling of a Taiwanese engineering firm as Chinese, Taiwan's representative to India said Wednesday.
September 5, 2013, 12:01 am TWN
“The Reserve Bank of India (RBI) issued a letter of clarification Sept. 2 confirming that Continental Engineering Corp. is a Taiwanese firm, not a mainland Chinese one,” James Tien said in an interview with CNA.
Citing the RBI letter, signed by Vandana Khare, general manager of the bank's Foreign Exchange Department, Tien said that Continental Engineering can hereafter set up investment project offices in India in accordance with standard procedures.
Under India's Foreign Exchange Management Act, only companies from countries such as Afghanistan, Bangladesh, China, Pakistan and Iran are required to seek RBI approval to set up project offices.
Continental Engineering began its foray into India in 2005 and has since won at least 10 project bids for an accumulated total of over 45.63 billion rupees (about NT$20.56 billion or US$691.87 million).
However, in February this year, Continental was unexpectedly treated by RBI as a Chinese firm and required to follow more stringent operating regulations.
This policy about-face left the company facing unpredictable risks in its development on the sub continent.
Taiwan's government has assisted Continental in dealing with the issue and opposition Democratic Progressive Party Legislator Hsiao Bi-khim also traveled to India late last month to help with negotiations.
Tien helped arrange for Hsiao to meet with influential figures in the Indian parliament, as well as officials from India's ministries of foreign, financial and economic affairs Aug. 29-30.
Hsiao told CNA after those meetings that she told Indian officials and parliamentarians that if the issue was not resolved, Taiwanese companies' interest in investing in India would be seriously affected.
Tien said the negotiations had run for over seven months and that the Indian government held five inter-ministerial meetings during the process to seek a solution.
“The settlement has set a good example for Taiwanese companies intending to invest in India in the future,” Tien said, adding that Taiwanese companies will no longer be required to follow stricter regulations applied to those from the above-mentioned countries.
Continental has just won a bid to build a mass rapid transit system in the city of Jaipur in the western Indian province of Rajasthan.
Now that the RBI has recognized the company as a Taiwanese firm, it can set up a project office within 10 days of receiving a formal Letter of Acceptance from the party in charge of the project.