'EU cos face taxation, licensing problems in India'.

Mumbai: Uncertainties over taxation and licensing policies as well as a slow judicial process in India are areas of concern for European companies and investors here, a top European Union official said Tuesday.

"Certainly, uncertainty with regard to the conditions under which they (European companies) operate are issues that we are concerned with," EU Ambassador Joao Cravinho, leading a trade delegation to the country, told reporters.

"The uncertainty with regards to taxation regime has been devastating the confidence of European companies," he added.

These comments come against the backdrop of India and EU finalising Free Trade Agreement.

Cravinho, however, expressed optimism that FTA will be signed soon, saying that the broad-based trade and investment agreement will also be signed at the earliest.

He said there are other types of uncertainties such as licensing, which are more difficult to pinpoint because they might relate to certain local authorities. He added, however, that such challenges do not have an immediate solution and require time to get resolved.

"India is a complex country, we recognise that. But the time that the courts take to respond is also something that deters investors," Cravinho said.

"If you have a legal system that is capable of responding fairly quickly, these issues can be solved through legal system without problem," he said, adding that in such situations investors prefer to pull out rather than depend on the legal system to resolve problems if it takes years.

Welcoming New Delhi's move towards opening up of multi- brand retail to FDI, Cravinho pointed out however that there is a need to simplify the processes and conditions involved in setting up businesses.

"The complexities of the conditionalities have so far have been a discouraging factor for companies. So, we expect that if there can be streamlining of those conditionalities, then we expect to be entrant into the market in the next year or so," Cravinho said.

He also expressed the optimism that economic reforms will continue to take place irrespective of whichever political party forms the next government in New Delhi.

"What I think is that India's fundamental interest in moving forward certain reforms of the economic system and opening up its economy to greater interaction with the rest of the world, these basic interest, will be served by which ever government's comes to power," Cravinho noted.

On the Iranian nuclear deal, Cravinho said it will be beneficial for countries like India as it allows countries to buy oil at their current level, which in case of India is around 9 per cent - down from about 12 per cent a couple of years ago - without any sanction in terms of insurance and also allowing to buy in foreign currency.

He also said the EU wants India to have data adequate status as it is in the interest of Europe.

"Data processing in India of sensitive data such as hospitals, insurance is carried out in much more competitive manner, much more efficiently and much more cheaply than we can do it in Europe or in other parts of the world. Therefore, European companies have interest in lowering their costs," he added.

However, he said 'data adequate status' can only be given to India according the procedures that are set in place and it cannot be a part of trade negotiation.

Source : zeenews.india.com