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Inclusion and Equality: Understanding Disability Rights Legislation in India.

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Abstract

This article delves into the progress, present status, and influence of disability rights legislation in India, highlighting the journey towards inclusivity and equality for people with disabilities (PwDs). With a population of over 26.8 million PwDs, India has made notable legislative advancements, particularly through the Rights of Persons with Disabilities Act, 2016 (RPWD Act). This Act signifies a transition from a welfare-based to a rights-based approach, broadening the definition of disability, increasing reservations in education and employment, focusing on accessibility, and imposing penalties for discrimination. Despite these legislative strides, challenges in implementation remain. Insufficient awareness and sensitization among stakeholders, limited infrastructure and digital accessibility, and systemic barriers hinder the effectiveness of reservation policies. Additionally, the lack of accurate data collection and monitoring mechanisms hampers policy improvements. Government initiatives like the Accessible India Campaign and the National Action Plan for Skill Development, along with efforts by civil society in advocacy, legal support, and community-based rehabilitation, are crucial in addressing these challenges. Technology, particularly assistive and accessible digital technologies, plays a key role in enhancing the independence and participation of PwDs.

The article presents successful implementation case studies such as Kerala’s Barrier-Free Tourism Initiative, Delhi University’s Equal Opportunity Cell, and Tata Consultancy Services’ employability programs, demonstrating the potential for inclusive development. Looking ahead, the focus should be on strengthening the enforcement of the RPWD Act, improving accessibility, promoting inclusive education, expanding employment opportunities, fostering positive societal attitudes, and leveraging technology. Achieving true inclusion and equality requires collaborative efforts from the government, civil society, and the private sector, ensuring that all individuals, regardless of their abilities, can fully and equally participate in society.

Introduction

Disability rights are fundamental human rights. Ensuring that people with disabilities (PwDs) have equal opportunities and access to various aspects of society is crucial for fostering an inclusive and equitable community. India, home to over 26.8 million people with disabilities according to the 2011 Census, has taken significant legislative steps to safeguard these rights. This article delves into the evolution, current state, and impact of disability rights legislation in India, exploring the challenges and future directions for fostering true inclusion and equality.

Evolution of the Concept of Disability

The journey towards disability rights in India has been gradual, marked by significant milestones. Historically, disability was viewed through a lens of charity and welfare, rather than rights and empowerment. This perspective began to shift in the latter half of the 20th century, influenced by global movements and changing societal attitudes.

  • Early Initiatives

In 1986, the Ministry of Welfare formulated the National Policy for Persons with Disabilities, which aimed to integrate PwDs into mainstream society. However, it was not until the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (PWD Act), that a comprehensive legislative framework was established. The PWD Act was a significant step forward, focusing on education, employment, and the creation of a barrier-free environment for PwDs.

  • International Influence and the UNCRPD

India’s commitment to disability rights was further strengthened by its ratification of the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD) in 2007. The UNCRPD played a crucial role in shaping India’s approach to disability, emphasizing dignity, autonomy, and non-discrimination.

  • The Rights of Persons with Disabilities Act, 2016

The most significant legislative advancement in recent times is the Rights of Persons with Disabilities Act, 2016 (RPWD Act). This Act replaced the PWD Act of 1995, aligning India’s laws more closely with the principles of the UNCRPD. The RPWD Act marked a paradigm shift from a welfare-based approach to a rights-based approach.

Key Provisions

Broadened Definition of Disability: The RPWD Act expanded the categories of disabilities from Sec. 7 to 21, including conditions like autism, intellectual disability, and multiple disabilities. This inclusive definition ensures that a wider range of disabilities is recognized and protected under the law.

Reservation in Education and Employment: The Act mandates a 4% reservation in government jobs and a 5% reservation in higher education institutions for PwDs, up from the previous 3%. This provision aims to enhance educational and employment opportunities for PwDs.

Accessibility: The Act emphasizes the creation of a barrier-free environment. It mandates the formulation of accessibility standards for physical infrastructure, transportation, information, and communication technology.

Guardianship and Legal Capacity: The RPWD Act recognizes the legal capacity of PwDs and provides for the appointment of limited guardians only when necessary. This provision respects the autonomy and decision-making abilities of PwDs.

Penalties for Discrimination: The Act introduces penalties for discrimination against PwDs, ensuring accountability and legal recourse for violations.

Implementation Challenges

While the RPWD Act is comprehensive, its implementation faces several challenges:

Awareness and Sensitization: A significant gap exists in awareness and understanding of the provisions of the RPWD Act among stakeholders, including government officials, employers, educators, and the general public. Sensitization programs are essential to bridge this gap and foster a more inclusive society.

Infrastructure and Accessibility: Despite the mandates, physical and digital accessibility remains a major challenge. Many public buildings, transportation systems, and digital platforms are not fully accessible, limiting the participation of PwDs in various aspects of life.

Education and Employment: The implementation of reservation policies in education and employment often falls short due to systemic barriers, lack of adequate support systems, and societal attitudes. Ensuring that educational institutions and workplaces are equipped to accommodate PwDs is crucial.

Data and Monitoring: Accurate data collection and monitoring mechanisms are essential to assess the effectiveness of the RPWD Act. Currently, there is a lack of comprehensive data on the implementation and impact of the Act, hindering policy planning and improvement.

Government and Civil Society Initiatives

Both the government and civil society organizations play a crucial role in addressing these challenges and promoting disability rights.

Government Initiatives

  • Accessible India Campaign (Sugamya Bharat Abhiyan):Launched in 2015, this campaign aims to make public spaces, transportation systems, and information technology accessible to PwDs. The campaign focuses on creating a barrier-free environment through infrastructure development and awareness programs.
  • National Action Plan for Skill Development:This plan focuses on enhancing the skills and employability of PwDs through vocational training programs, aiming to increase their participation in the workforce.
  • Inclusion in Education Policies: Various policies and schemes, such as the Sarva Shiksha Abhiyan (SSA) and the Integrated Education for Disabled Children (IEDC) scheme, aim to promote inclusive education and provide support services for children with disabilities.

Civil Society Initiatives

  • Advocacy and Awareness:Numerous non-governmental organizations (NGOs) and advocacy groups work towards raising awareness about disability rights, advocating for policy changes, and providing support services to PwDs.
  • Legal Support and Counseling: Organizations like the National Centre for Promotion of Employment for Disabled People (NCPEDP) provide legal support and counseling to PwDs, helping them navigate the legal system and fight for their rights.
  • Community-Based Rehabilitation (CBR):CBR programs, run by NGOs and community organizations, focus on empowering PwDs at the grassroots level, providing healthcare, education, and livelihood opportunities.

The Role of Technology

Technology plays a pivotal role in advancing disability rights and inclusion. Assistive technologies, such as screen readers, hearing aids, and mobility devices, enhance the independence and participation of PwDs. The proliferation of digital platforms and online services also offers new opportunities for education, employment, and social interaction.

However, ensuring digital accessibility remains a challenge. Websites, mobile applications, and digital content need to be designed with accessibility in mind, adhering to standards like the Web Content Accessibility Guidelines (WCAG). The government and private sector must invest in accessible technology to bridge the digital divide.

Case Studies

Examining real-life examples of successful implementation of disability rights can provide valuable insights and inspiration.

  • Case Study 1: Kerala’s Barrier-Free Tourism Initiative

Kerala’s initiative to make tourist destinations accessible to PwDs is a commendable example of inclusive development. The state government, in collaboration with various stakeholders, has worked to make popular tourist spots, hotels, and transportation systems accessible. This initiative not only promotes tourism but also highlights the potential of inclusive infrastructure to boost economic development.

  • Case Study 2: Inclusive Education at Delhi University

Delhi University’s Equal Opportunity Cell (EOC) has been instrumental in promoting inclusive education. The EOC provides various support services, including assistive devices, accessible study materials, and special accommodation during exams. These efforts have significantly improved the academic experience and success rates of students with disabilities.

  • Case Study 3: Employability Initiatives by Tata Consultancy Services (TCS)

TCS has implemented various initiatives to enhance the employability of PwDs, including skill development programs, accessible workplace infrastructure, and sensitization workshops for employees. These efforts have not only increased the number of PwDs in their workforce but also fostered a more inclusive corporate culture.

Future Directions

While significant progress has been made, there is still much to be done to achieve true inclusion and equality for PwDs in India. Future efforts should focus on:

  • Strengthening Implementation and Enforcement: Robust mechanisms for monitoring and enforcing the provisions of the RPWD Act are crucial. This includes regular audits, penalties for non-compliance, and transparent reporting.
  • Enhancing Accessibility: Continued efforts to improve physical and digital accessibility are essential. This includes updating infrastructure, promoting universal design principles, and ensuring that new developments are accessible from the outset.
  • Promoting Inclusive Education: Inclusive education should be a priority at all levels, from primary to higher education. This requires adequate training for educators, accessible learning materials, and support services for students with disabilities.
  • Expanding Employment Opportunities: Beyond reservation policies, there is a need for inclusive hiring practices, workplace accommodations, and support for self-employment and entrepreneurship among PwDs.
  • Fostering Societal Attitudes and Awareness: Changing societal attitudes towards disability is fundamental. Public awareness campaigns, community engagement, and education can help reduce stigma and promote a culture of inclusion.
  • Leveraging Technology: Investment in accessible technology and innovation can significantly enhance the independence and participation of PwDs. This includes both assistive technologies and ensuring that mainstream technologies are accessible.

Conclusion

Inclusion and equality for people with disabilities in India are not just legal mandates but moral imperatives. The legislative framework, particularly the RPWD Act, provides a strong foundation for safeguarding the rights of PwDs. However, the journey towards true inclusion requires concerted efforts from the government, civil society, and the private sector. By addressing implementation challenges, promoting awareness, and leveraging technology, India can move closer to a society where all individuals, regardless of their abilities, can participate fully and equally.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Written By- Shramana Sengupta

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Unlocking India’s Entrepreneurial Potential: A Legal Exploration of Equity Crowdfunding

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Startups and small businesses in India are continually looking for reliable sources of funding. At the same time, small investors are looking to diversify their portfolios and bet on promising new ventures. This, combined with the rising popularity of the startup environment as a result of TV series such as Shark Tank, has resulted in the emergence of numerous platforms that allow companies to interact with investors and crowdsource their financial needs. However, equity crowdfunding in India operates in a regulatory grey area because there are no clear statutes, rules, or regulations governing it. 

The absence of regulatory clarity provided an opportunity for certain equity crowdfunding platforms to construct creative instruments that are not securities in and of themselves, but have a monetary value comparable to the issuing company’s shares. These platforms enable firms to raise cash from small retail investors using a “community subscription offer plan” (CSOP). A CSOP is an investment plan enabling retail investors to invest in exchange-traded funds and a type of instrument for acquiring shares or rights. 

 

INTRODUCTION: 

The path to funding in the form of venture capital and angel investments is difficult to navigate because the latter favour investments, particularly those of significant size. Because of this, many start-ups miss out on the opportunity to introduce a promising idea to the market. Traditional banking sources are unable to meet the specific needs of small business owners. As a result, a lot of startups and small businesses look to alternate funding sources to get by.  

One such alternative funding source that offers small enterprises and start-ups a workable solution for raising capital is crowdfunding. As its name suggests, crowd fundraising is the process of raising modest sums of money from a large number of investors.  

Crowdfunding obtains funds from the general public, as opposed to traditional business financing, which is mostly provided by affluent individuals and institutional investors. There are two varieties of crowdfunding models: equity-based models and non-equity based models. Absence of Equity Online donations or purchases of goods or experiences in exchange for contributions are known as crowdfunding.  

 

UNDERSTANDING CROWDFUNDING: 

Funding for a crowdfunding offering is open to everybody. If you are an accredited investor, investment crowdfunding is limitless; if not, there are limits on the amount you can invest depending on your income or net worth. Final regulations for the Jumpstart Our Business Startups Act (JOBS Act) were released by the Securities and Exchange Commission (SEC) in 2016. These regulations made it possible for a larger range of investors to participate in crowdfunding in the United States, provided that the necessary regulatory framework was in place. 

Businesses and entrepreneurs can ask for crowdsourcing to finance debt, equity, and real estate purchases. The possibility of losing your entire investment is one risk, as is the lack of liquidity resulting from the difficulty of rapidly reselling crowdfunded shares. Another risk is that your shares are already somewhat diluted and may become even more so if additional funding rounds are held. 

 

EQUITY INVESTMENT CROWDFUNDING: 

Equity investment crowdfunding is a means of investing funds and acquiring shares in companies, most of which are in their early stages. Companies pique your interest by describing their company goals through web channels. You have a variety of spending options, each with a gradation of percentage investment in the company. These shares increase in value in the event that the business does well, just like ordinary equities do. That being said, given the rather uncertain future of startups, there is risk associated with your ownership position. 

 

DEBT INVESTMENT CROWDFUNDING: 

Crowdfunding for investments can also be used to swap loans for stock or interest payments. As a debt investor, you can interact with a sizable organisation that serves as a microloan provider. You’ll be able to evaluate the terms of the loan, such as the length of the loan, the interest rate, and the predicted credit rating of the borrower, through the platform that you use. 

When traditional borrowing is either too expensive or unavailable, borrowers may turn to this source of funding. In order to obtain seed money to launch a new company, entrepreneurs usually borrow money from banks, friends, and family, or they provide stock ownership in exchange for investments from angel and venture capital investors, as well as from friends and family. When alternative options for fundraising are either unavailable or prohibitively expensive, a firm can use investment crowdsourcing to seek relatively small investments from numerous backers. 

 

MERITS OF CROWDFUNDING: 

One of the fundamental goals of crowdfunding is to close the funding gap for small- to medium-sized businesses and startups by utilising social media and technology through crowdfunding platforms. This lessens the physical distance between the investors and the entrepreneur. By spreading the word about the idea to numerous potential investors online, it serves as a means of accelerating investments and is more effective than the conventional method of borrowing money from friends and relatives. It addresses the issue caused by traditional investment sources’ high interest rates, which frequently make it impossible for small firms to produce a consistent cash flow to pay them back. Additionally, the lack of liquid assets to use as security limits access to a variety of kinds of funding.  

  • Low Entry Barrier: Equity-based crowdfunding, a relatively new financing model, lowers the entry barriers for entrepreneurs by enabling them to acquire capital from a far wider range of possible investors than ever before. Businesses can now obtain capital considerably more quickly and readily than in the past thanks to the ease of access to a wider pool of investors.  
  • Minimal Risk: By utilising equity-based crowdsourcing, investors can benefit from the possibility of large returns without assuming the same degree of risk associated with conventional investing. The risk is capped at the amount invested by the investor because they are not required to make any upfront payments. 
  • Low Cost: In comparison to more conventional financing methods, equity-based crowdsourcing is also significantly less expensive. Paying fees or commissions to a third party is not necessary because the investment is made directly to the business. 
  • Diversification: Portfolio diversification can be achieved by investing in a variety of companies through equity-based crowdsourcing. Both risk and possible profits may be decreased in this way. 

 

DEMERITS OF CROWDFUNDING: 

Depending on the platform, crowdfunding campaigns fail somewhere between 69% and 89% of the time. From the viewpoint of investors as well as entrepreneurs looking to raise money, crowdfunding carries a number of dangers. Because crowdsourcing is primarily internet-based, money can be raised from people all over the world, which may cause issues with local laws in the various nations. 

  • When in need of money for medical help, turn to crowdsourcing as a final option. Delays in receiving prompt medical attention may result from persons trying to sell their possessions or apply for medical loans. 
  • Contrary to popular belief, crowdfunding is not just for new or established companies. Charity, NGOs, and individual causes can all benefit from crowdfunding. 
  • The general public’s perception also holds that internet crowdfunding is limited to raising little sums of money. Yet, other fundraising initiatives have brought in millions of dollars for beneficiaries’ social, medical, or personal causes. 
  • Furthermore, a common misconception is that no one uses crowdfunding platforms to make donations. This is untrue. Many fundraisers have noticed a notable outcome after sharing their campaign on social media with their friends and family; nobody, not even complete strangers, has donated to their campaign. 

 

EXAMINING CROWDFUNDING FROM A LEGAL PERSPECTIVE 

USA- 

The Jump Our Business Start-ups Act, 2012 (also known as the “JOBS Act”) was introduced in the United States on April 5, 2012, with the goal of enabling small businesses to sell their securities to the public through the internet. The act did this by amending the Securities Laws that were in place at the time. However, these regulations only went into effect on May 16, 20161. 

In terms of crowdfunding exemptions, the Securities Act of 1933’s Sections 4(a)(6) and 4-A include the majority of the legal criteria. Moreover, all transactions must be carried out via intermediaries registered with the SEC, which might be a registered broker or a “funding portal.”2 

 

ITALY- 

One of the first nations to develop a crowdfunding regulation23 was Italy in 2013. However, the regulations that were created were overly onerous, which prevented the market for equity crowdfunding from expanding3 The regulation was originally intended exclusively for “innovative start-ups,” but it was later broadened to include “innovative SMEs” that wanted to raise money via crowdfunding.  

The regulation contains several significant provisions, such as the requirement that online portals be registered with CONSOB, which is then tasked with the assigned task of shareholder protection; the requirement that controlling shareholders and individuals performing managerial and supervisory functions declare their integrity and adhere to professional standards; and the requirement that information obtained from investors by the portal manager be kept confidential. It is the responsibility of the platforms to educate novice investors about the dangers of investing through equity crowdfunding and to verify the veracity of the claims made by companies looking to raise money through this method.  

 

CHINA- 

In China, the crowdfunding landscape is extremely active and changing quickly4 The lack of governing restrictions, which in turn allows for the setting up and quick start of operations, is the reason for this rapid expansion. Because of the legal ambiguity, crowdfunding in China has taken on a more “sale-oriented” form. This indicates that investors purchase the product at an advanced stage of production, prior to it being manufactured5. Because this helps to transfer the risk from investors to entrepreneurs, the portals that employ this strategy have lower fees overall.  

Similar to the international Crowdfunding platforms, the investors in China likewise need to accept a standard service contract while they open an account with the portal and this contract emphasises on the intermediate role played by the portal between the investors as well as the entrepreneurs. 

 

CROWDFUNDING IN INDIA- 

Prior to delving into the complexities of India’s crowdfunding laws, let’s examine the Sahara India Real Estate Ltd. v. Securities and Exchange Board of India6 case, which examined crowdfunding perceptions for the first time. 

FACTS:  

During an EGM of SIRECL, a special resolution was passed with the aim of raising capital through the issuance of unsecured OFCDs through a private placement. The two unlisted companies under the control of the Sahara Group of Companies are Sahara India Real Estate Corporation Limited (henceforth “SIRECL”) and Sahara Housing Investment Corporation Limited (henceforth “SHICL”). 

The offer details were contained in the Red Herring Prospectus, which the Sahara Group believed needed to be submitted to the Registrar of Companies. It made it very evident that the only people who could invest in the OFCDs were those who had received the Information Memorandum (IM) and/or those who were connected to or associated with the Sahara Group.  

The Sahara Group was also said by the RHP to have no intention of listing. they believed that the RHP would need to be filed with the ROC rather than the Securities and Exchange Board of India in order to list the supplied securities on any recognised stock exchange. 

The fundraising activities of two firms, SIRECL and SHICL, which had raised money by issuing OFCDs to a significant number of people for a considerable amount of time, were the subject of several complaints and concerns from the public. These activities were not included in the DHRP of SPCL. 

Consequently, SEBI requested explanations from Sahara Group, but they declined to reply. Sahara Group argued that as the firms were not intended to be listed on any stock exchange, SEBI was not permitted to request information for the same reason, as stated in the RHP. However, SEBI authorised an investigation to look into if anyone has broken any rules or board directives regarding the securities market since it is concerned about protecting investors.  

JUDGMENT- 

The Supreme Court reviewed Act Section which addressed the issuance of debentures to the general public. The proviso of Section 67(3), which specifies that an offer made to fifty or more people will be deemed a public offer and fall under the purview of this section, was highlighted by the court. Regarding this matter, the Court determined that the OFCDs do not fit under the private placement category because they were distributed to the broader public.  

The Court decided that the requirements of Section 73, which included requirements for the required listing of the shares on stock exchanges, would be addressed after determining that the contested offer qualified as a “public offer.” As a result, SEBI was directed to receive a refund of the money received through the RHP, along with 15% interest, from SIRECL and SHICL, whose offers were ultimately deemed to be public offers.  

 

RECENT TRENDS AND WAY FORWARD: 

Due to a lack of rules, there is currently uncertainty in India over the legality of crowdfunding. However, SEBI has a strong position against equity crowdfunding and has declared it unlawful in a Caution Press Release. The release states that SEBI has become aware of fundraising activities taking place through Private Placement on unapproved online platforms (such as websites and other internet-based online portals) in violation of the Securities Contract (Regulation) Act, 1956 and the Companies Act, 2013.  

As a result, it is unlawful to issue securities in India through these unapproved web platforms. Following the press release previously indicated, SEBI sent show-cause notifications to a number of crowdfunding platforms operating in India, requesting details regarding the platforms’ legitimacy’s fund-raising process. Following these platforms’ violations of the private placement guidelines, SEBI received notifications, and as a result, the companies queued up to register as Alternate Investment Funds (AIF) with SEBI.  

The scope of crowdfunding will be significantly limited if the crowdfunding platforms are brought under the AIF, which means they will be subject to the SEBI (Alternate Investment Fund) Regulations, 2012 (also known as the “AIF Regulations”).  

Although the fundamentals of crowdfunding are quite sensible, only investors with a minimum net tangible asset value of two crore rupees are permitted to participate because of AIF regulations. A programme requires a minimum investment of 20 crore rupees, while the minimum investment required from an investor is 1 crore rupees (unless they are employees or directors of funded entities).  

Also, there is a cap of 1,00064 investors at any one time (and the Companies Act, 2013 will apply if the AIF is a corporation). Due to the strict AIF laws that will control the crowdfunding process, it may be concluded from the aforementioned provisions that the fundamental principles of crowdfunding are deteriorating. 

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Written by Riddhi S Bhora. 

 

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Global Capability Centres (GCCs): Handling the Digital Era — An in-depth exploration of developments, approaches, and regulatory frameworks

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ABSTRACT: 

In the dynamic landscape of global business, Global Capability Centers (GCCs) emerge as strategic powerhouses, reshaping how organizations operate, innovate, and scale. This article unravels the multifaceted journey of GCCs within the Indian context, where India’s leadership shines brightly. From inception to execution, this article aims to delve into the intricate steps involved in running GCCs on Indian soil, emphasizing legal compliance, talent fusion, and strategic autonomy.  

The canvas extends to various metropolitan cities and states in the subcontinent., encompassing rural ecosystems and equitable growth. As data guardians and cultural bridge-builders, GCCs navigate complexities, leveraging innovation and safeguarding sensitive information. This study attempts to shed light on the complex web of myths and beliefs surrounding the GCCs by evaluating the historical background, legal provisions, investigation difficulties, and prosecution barriers. 

 

KEYWORDS: 

GCCs, Global Capability Centres, India, Innovation, Technology, Legal Compliance, Regulatory Authorities, Data protection, Expansion of business, MNCs, Corporate Structure, Diversification, Legalities. 

 

INTRODUCTION 

India has established itself as a centre for innovation and R&D in recent years. An increasing number of international corporations are considering looking to India as a means of propelling their corporate growth into the next phase, given its well-established reputation as a hub for outsourcing and offshore, particularly in the technology industry.  

The nation is leading the way in tech-driven innovation because to the fast changing services industry, which has made global capability centres essential hubs for business strategies, new technologies, and transformation. These hubs enable organisations to remain flexible in a very dynamic setting. 

 

EMERGENCE AND EVOLUTION: 

In order to reduce costs and meet the operational needs of a foreign organisation (referred to as a “Foreign Entity”) in its service offerings, global capacity centres, or “GCCs,” were first established in the Indian banking sector as offshore global in-house centres, or “GICs.” India’s knowledgeable workforce (large potential base) and reasonable operating expenses have helped it become recognised as a desirable location. With 1.66 million1 workers as of FY 2022–2023, India employed roughly 1,580 GCCs, and this figure is rising quickly. 

By generating excellent job opportunities and boosting the GDP of the nation, these centres have been crucial to India’s economic development. These global corporations in India, known as GCCs, are present in a variety of industries, such as technology, engineering, consulting, and many more. Indeed, India has become the go-to location for many of these innovation clusters due to its abundance of highly trained and bright workers, affordability, and government regulations that encourage them. 

The most sought-after locations are Bengaluru, Hyderabad, Delhi NCR, Mumbai, Pune, and Chennai; with their strong infrastructure, talent pool, and encouraging climate, these cities provide an ideal setting for global capabilities centres in India. The majority of the operational GCC footprint in India’s top 6 cities is made up of US-headquartered companies, with European companies making up the remaining 35%2. With the support of local unicorns, the percentage of GCCs with an APAC base is now very low but is rapidly increasing. Furthermore, the total amount of office space occupied by GCCs in the top six cities has surpassed 200 million square feet and is increasing quickly over time. 

 

INDIA’S CONTRIBUTION TO GLOBAL COMPETENCE CENTRES: 

The development of global captive centres in India has been influenced by a multitude of growth drivers, both past and present. They consist of:  

  • ABILITY: The presence of highly skilled labour in India’s global capability centres is one of their main advantages. Every year, millions of people graduate from India, with a large percentage having studied business management, computer science, or engineering. These graduates have a strong sense of motivation, outstanding technical proficiency, and a solid grasp of global business procedures. As a result, multinational corporations operating in India can take use of this talent pool to offer a broad range of services to their clientele worldwide. 
  • AFFORDABLE FACILITIES: An additional benefit of global capability centres in India is their cost-effectiveness. Compared to industrialised nations like the US and the UK, running a captive centre in India is far less expensive. This is because of better exchange rates, lower real estate expenses, and lower salaries. Thus, by setting up a GCC in India, multinational corporations can drastically cut their operating costs. Indian towns entice multinational corporations to establish their global inhouse centres because they provide occupiers with comparatively lower rentals for Grade A workplaces, and institutional landlords are pushing for better services and higher-quality real estate. 
  • GOVERNMENT SUPPORT: In an effort to draw in international investment, the Indian government has supported the establishment of global competence centres by offering a number of programmes and incentives. Businesses can establish their GCCs in special economic zones (SEZs) created by the government, where they can also take advantage of a number of additional advantages and tax breaks. Additionally, the government has put policies in place to support R&D and innovation, which has assisted captive centres in India in creating cutting-edge services and technology. 

 

ENACTING OR RUNNING A GCC IN INDIA: LEGAL AND REGULATORY ASPECTS: 

Every federal, state, and municipal law that a foreign entity intends to establish a GCC in India must be complied with. Compliance with contract laws to regulate the GCC’s contractual relationships (such as intergroup agreements and vendor/supplier contracts), corporate structuring, regulatory interventions, dispute mitigation techniques, etc., are all included in this.  

Additionally, compliance with corporate laws specifies the type of legal entity that must be established in order to incorporate the GCC. In addition, the GCC would be exposed to some legal risks due to the fact that different jurisdictions may have different legal positions on matters like as minimum compensation, non-compete agreements, data protection, permanent establishment, and reporting structure. 

These include various factors like: 

INITIAL STAGE: COMPLIANCES AND SETTING UP- 

Prior to incorporating the GCC in India, the foreign entity would need to decide what kind of legal entity to create. It could be an office, a partnership, a limited liability partnership, a business, or a joint venture. It would next have to decide on the corporate structure for the GCC.  

This could fall into one of two extremes in terms of the ownership and control that the Foreign Entity has over the GCC in India: Choose the conventional or “do-it-yourself” model (also known as the “DIY Model”), in which the foreign entity establishes the GCC while maintaining total ownership and management. Specialised jobs requiring local assistance or advice are then outsourced. Adopt the “build-operate-transfer” model (also known as the “BOT Model”), in which a third-party service provider establishes the GCC/GIC, runs the centre, and then progressively hands over ownership and control to the foreign entity. 

Getting to the section on compliances, The standards for compliance before and after setup vary based on how the GCCs are set up in India. For example, the GCC would have to adhere to a number of requirements if it were to become a company under the Companies Act, 2013, as well as its regulations. These would include deciding on reporting lines, reviewing and preparing company policies and charter documents, preparing routine and event-based reporting and filings, and more. 

 

SECOND STAGE: GEOGRAPHICAL AREA- 

The special economic zones (SEZs) and international financial services centres (IFSCs) are the two tools that regulate GCCs and GICs established in controlled territories; nevertheless, there is no specific legislation or regulation that governs GCCs generally. GCCs and GICs established in Special Economic Zones (SEZs) are subject to regulations outlined in the Special Economic Zones Act, 2005 (“SEZ Act”).  

Any “GIC” setup at an international financial services centre (IFSC) is governed by the International Financial Services Authority (Global at-House Centres) Regulations, 2020 (“GIC Regulations”). To maximise “ease of doing business,” SEZs and IFSCs provide regulatory exemptions to businesses operating within its borders. These exemptions include non-fiscal (such as simplified licencing) and fiscal (such as labour legislation and tax relaxations). 

 

THIRD STAGE: RESOURCING- 

Due to the centre’s operations in India, employment and/or labour regulations in India would apply to anyone hired or recruited to work for the GCC, regardless of their citizenship. One of the main reasons foreign entities establish GCCs in India is because of the availability of diverse “human capital.”  

Therefore, the centre must ensure proactive compliance, which includes, but is not limited to, putting in place the required policies and systems to prevent and handle employee-related grievances at work. In addition to hiring foreign nationals, the GCC is permitted to hire Indian people, but it must carefully manage the extra compliances associated with doing so. Recruiting from the Indian labour force appears to be a goal, based on the current enormous and heightened recruitment activities3. 

 

STAGE 4: TAXES- 

Evaluating various corporate proposals requires constant assistance on transfer pricing, GST-related issues, and taxation (including employee incentives, property, etc.) due to India’s strict tax system and the GCC’s global servicing model.  

Since the Indian tax department would review and evaluate the GCC in terms of its control, supervision, and management by the foreign entity—specifically, how employees in India report to the employee at the foreign entity—the foreign entity should also take precautions to avoid any risks from being classified as a “permanent establishment.” 

From a theoretical perspective, this is the last or “final” stage overall. To survive in this fiercely competitive market, there are still numerous steps to take. Maintaining the regulatory authorities is the primary goal. 

 

OUTSOURCING OF GCCs: 

To elaborate on the previously mentioned point, there are two strategic models available for setting up a GCC in India: (1) the traditional or do-it-yourself model (also known as the “DIY Model”), wherein the foreign entity establishes the GCC (by incorporating an entity in India) and maintains full control and ownership (while outsourcing specialised tasks requiring local support/advising); and (2) the build-operate-transfer model (also known as the “BOT Model”), wherein a third-party service provider either fully or partially establishes the GCC, runs the centre, and gradually transfers ownership and control to the foreign entity4. 

A service agreement with a professional employer organisation (PEO) or employer on record (EOR) is one of the numerous hybrid models. In this arrangement, the foreign entity enters into a contract with an EOR/PEO to engage employees who will work directly for the foreign entity under the EOR/PEO’s supervision and execute services that the foreign business would typically expect from the GCC. This usually lasts only temporarily, until the foreign company establishes procedures for directly onboarding staff and incorporates its GCC in India. 

 

BENEFITS: 

  • TALENT: Having access to a global talent pool allows businesses to customise their dream team by finding experts with specialised knowledge and abilities. Combining creativity, problem-solving, and operational excellence in this way yields optimal results. 
  • AFFORDABLE: Capitalising on areas with reduced labour costs is a wise financial decision for GCCs. Because of the large savings in infrastructure, salaries, and operating costs that result from this, firms are better able to manage their resources for improved financial health and competitiveness. 
  • FLEXIBILITY: GCCs offer businesses the amazing capacity to instantly scale up or down in response to market conditions. Therefore, GCCs maintain organisations competitive and nimble, whether it’s managing unexpected demand spikes or taking on exciting new projects. 
  • SCOPE FOR INNOVATION: GCCs enable businesses to concentrate on innovation and core competencies. By assigning regular duties to these centres, organisations can free up resources for things like product development, market expansion, and strategic projects. This emphasis strengthens the company’s competitive advantage, fosters a culture of continuous innovation, and moves the business in the direction of steady growth and adaptation. 

 

DRAWBACKS:  

Although they have numerous advantages, Global Capability Centres (GCCs) also have some difficulties and disadvantages. Let us investigate a few of these: 

  • Lack of Executive Sponsorship: Strong executive sponsorship is frequently necessary for GCCs to form and grow successfully5. Delays in decision-making and operational inefficiencies could occur in the absence of high-level support. Insufficient comprehension of expenses, ROI, and the operational framework may impede the efficacy of the Gulf Cooperation Council. 
  • Complex Setup and Resource Intensiveness: Legal compliance, infrastructure preparation, and hiring talent are just a few of the many tasks involved in establishing a GCC. Budgeting, coordinating resources, and ensuring they are in line with corporate objectives may all be challenging. 
  • Cultural Differences: There are difficulties while working in multicultural environments. It takes extra work to effectively communicate, grasp local customs, and bridge cultural divides. 
  • Data Privacy and Security Risks: Adherence to data protection rules is crucial when managing confidential information. Making sure there are strong security protocols and privacy protections is crucial. 
  • Legal and Regulatory Compliance: It can be difficult to navigate local tax laws, labour legislation, and intellectual property rights. Legal ramifications and reputational harm could result from noncompliance. 

 

CONCLUSION: 

GCCs are strong promoters of innovation and growth in the complex world of international business. They do face some legal challenges along the way, though. Under the guidance of strategic foresight and legal caution, organisations must use caution when they create and maintain these centres. Global Capability Centres (GCCs) facilitate innovation and progress in the complex world of global business. But they also have to deal with issues including complicated setup, cultural disparities, and privacy concerns pertaining to data.  

Ensuring compliance with labour regulations, data security, and contractual accuracy are all critical aspects of legal compliance. Strategic independence, talent fusion, and a global vision are essential as GCCs traverse these boundaries. Under the direction of a peaceful future and superior legal standards, India’s position as a leader among the GCC states keeps changing. 

 

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.” 

 

Written by Riddhi S Bhora. 

 

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Katchatheevu Island issue – Political turmoil over Sovereignty and Fishermen Rights: India v/s Sri Lanka

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Introduction

Katchatheevu Island is a very small and uninhabited island spanning 285 acres in the Palk Strait between India and Sri Lanka. It is spread covers around 1.6 km in length and slightly over 300 m wide at its widest point. It’s in proximity to both the countries. It is situated northeast of Rameshwaram, approximately 33 km from the Indian coast, and it lies around 62 km southwest of Jaffna, Sri Lanka’s northernmost point. The only structure on Katchatheevu is St. Anthony’s Church, built in the early 20th century. During an annual festival, Christian clergy from both India and Sri Lanka jointly conduct services, drawing pilgrims from both nations. However, despite the occasional influx of people, Katchatheevu is unsuitable for permanent habitation due to the absence of a freshwater source on the island. The geographical location of the island and rich fishing ground around the island makes it a point of contention between the two countries.

History on the sovereignty of Katchatheevu Island

The island during the early medieval period was under the control of Sri Lanka’s Jaffna kingdom. But, by the end of 17th century, it became a part of the Ramnad kingdom based in Ramanathapuram, India. In the British reign, it was administered as part of the Madras Presidency. From the early 1921, both India and Sri Lanka asserted their claims over the island to decide maritime fishing boundaries. After Indian Independence and establishment of Sri Lanka as a separate dominion, the status of Katchatheevu Island became a matter of dispute. While, Sri Lanka asserted its sovereignty over Katchatheevu by citing the Portuguese occupation of the island from 1505 to 1658 CE as evidence of jurisdiction, India relying on the various reports argued that the former Raja of Ramnad held possession of it as part of his estate and regularly collected taxes until the Abolition of Zamindari System.

Following such disputes the then Prime Minister of India Indira Gandhi entered into a bilateral agreement with the Sri Lankan Government, wherein the island was officially ceded to Sri Lanka to resolve the maritime boundary issues in the region. However, since then it has led to a serious dispute especially among the fishermen of both the countries. The Congress Government defended its stance by stating that the decision regarding the island was made after thorough research of historical and other records pertaining to the island. The Katchatheevu Island involves the issue of fishing rights and the maritime security. Indian fishermen have traditionally used the water around the island for fishing purposes. But, consequent to the bilateral agreement in 1974, there have been numerous instances of arrests and detentions of the Indian fishermen and occasional violence. These conflicts have also caused a lot of diplomatic strains between India and Sri Lanka.

Life-line to the Indian Fishermen

The Indian fishermen mostly from the Tamil Nadu regions venture around the island for fishing and often encounter serious actions from the Sri Lankan authorities.

Article 4 of the Agreement stipulated that each State shall have sovereignty and exclusive jurisdiction and control over the waters, the Islands, the Continental Shelf and the subsoil on its side of the Maritime boundary in the Palk Strait and Palk Bay and Katchatheevu Island was determined as falling within Sri Lankan waters. The following article added that “Indian fishermen and pilgrims would enjoy access to the island as before and would not be required by Sri Lanka to obtain travel documents or visas for these purposes”.

During the time when the DMK governed Tamil Nadu in 1974, it contended that the Congress government had not considered its perspectives before signing the agreement with Sri Lanka. The party had organised several protests in response.

Under the leadership of J Jayalalithaa, the Tamil Nadu government consistently raised concerns about the issue and even resorted to legal action.

In anticipation of the visit by Sri Lankan Prime Minister Ranil Wickremesinghe to India last year, Tamil Nadu Chief Minister M K Stalin had written to PM Modi, urging for discussions on the matter. He later corresponded with PM Modi again after numerous fishermen were detained by the Sri Lankan authorities.

In his letter dated February this year, Stalin further emphasised the impact on the livelihood of Tamil fishermen, citing the increasingly limited access to traditional fishing waters, which threatens the economic stability and social fabric of the communities dependent on the fishing industry.

Reasons for the spotlight on the issue

The report, published by The Times of India on March 31st and cited by Modi, was based on documents obtained by Tamil Nadu BJP Chief K Annamalai. It appeared to indicate that past Congress governments did not attach much importance to the island located about 20 km from the Indian coastline. The issue is at the centre of a war of words between the BJP and the opposition Congress, with Prime Minister Narendra Modi accusing the Indira Gandhi government of callously ceeding the territory to Colombo. After Modi cited a media report to criticise the 1974 India Sri Lanka agreement on the island, Congress president Mallikarjun Kharge linked the premier’s stance to the upcoming general elections. Kharge likened the island’s ceding to the swapping of enclaves between India and Bangladesh in 2015 under Modi’s leadership and said both were friendly gestures towards neighbouring countries.

Relevance of Berubari Case to the present issue

The Nehru-Noon Agreement proposed to divide Berubari into two equal halves between India and Pakistan and the division was given effect by promulgating the Constitution (Ninth Amendment) Act, 1960. The Supreme Court’s ruling meant that a constitutional amendment would be needed to transfer Indian Territory to another country. While, the Constitution was amended in 1960, Berubari still remained a part of India. In light of such rulings, secession of Katchatheevu Island to the Sri Lankan Government which was done without any Constitutional amendment has to be overlooked.

Other Importance of Island

Geopolitical Location: Katchatheevu is strategically located in the Palk Strait, which serves as a crucial maritime route connecting the Bay of Bengal with the Gulf of Mannar and the Indian Ocean.

Security Concerns: Control over Katchatheevu provides India with strategic leverage in monitoring maritime activities in the region, including movements of vessels and potential security threats.

Fishing Resources: The waters around Katchatheevu are rich in marine resources, including fish and other seafood, which are vital for the livelihoods of fishermen from Tamil Nadu.

Commercial Potential: Control over Katchatheevu could facilitate the development of commercial activities such as fishing, aquaculture, and tourism, thereby boosting economic growth in the region.

Historical and Cultural Claims: Katchatheevu holds historical significance for India, with claims of traditional fishing rights by fishermen from Tamil Nadu dating back centuries. The island has historical and cultural significance for the Tamil communities in India and Sri Lanka, as it is associated with the legendary Tamil sage Thiruvalallur.

Concerns around the Island

The Restrictions on fishing activities around Katchatheevu imposed by Sri Lanka have led to humanitarian concerns, including instances of arrests, harassment, and loss of lives among Indian fishermen. It is essential from a humanitarian perspective to ensure the welfare and safety of fishermen and their families who depend on the waters for their sustenance. Further, Katchatheevu’s proximity to the Indian coast makes it a potential hub for smuggling activities, including arms, drugs, and contraband.

Conclusion

Katchatheevu Island despite its small size holds a large significance. It remains a complex issue between India and Sri Lanka due to its strategic location, impact on fishing rights, and cultural significance. The transfer of the island to Sri Lanka has strained bilateral ties and highlighted the need for a comprehensive resolution addressing maritime security, livelihood concerns of fishermen, and respecting the historical sentiments of both nations. It has turned out to be a blame game amidst the upcoming Lok Sabha polls instead to tackling the key concern around it. hence, resolving this long-standing dispute is the need of the hour to re-establish mutual understanding and fostering cooperation and stability in the region.

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A way towards transparency : CCPA on dark patterns

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Introduction :

Dark patterns are a consumer tactic that is used to manipulate the choices of the user. For example, when someone is purchasing from an online store, the price of the product is exclusive of the taxes and delivery charges. The price the consumer opted for is more than what was shown in the initial stage. Dark pattern is a blanket term in which the user has to deliberately make a choice to consume what they need. There are many circumstances where exploitation of the consumer takes place due to these underlying dark patterns. Examples include unnecessary pop-up boxes which automatically drive the consumer away from the product or service they require[1].

The government of India has legislated the use of these patterns in the guidelines issued by the Consumer Protection Authority of India called the “Guidelines for Prevention and Regulation of Dark Patterns, 2023”

Other authorities on Dark Patterns :

In India, the major shield consumers have against any exploitation is the Consumer Protection Act, of 2019. Section 2(9)[2] defines consumer rights and it includes the right to be protected against harmful marketing and, right to be informed about the nature of the goods or services. The act of tricking a consumer into buying something or not providing the whole truth initially can be labelled as a violation of consumer rights along with unfair trade practices dealt with under Section 47[3] of the Act.

In the event of a violation of consumer rights, the Central Consumer Protection Authority issues guidelines to prevent unfair trade practices. Noncompliance with any orders passed by CCPA can lead to imprisonment of 6 months or a fine of up to Rs.20 lakhs or both[4]. In addition, the CPA punishes creating deceptive or misleading advertisements that harm customers’ interests. Penalties include up to two years in prison and a fine of up to Rs 10 Lakh. Moreover, a maximum sentence of five years in prison and a maximum fine of Rs.50 lakh may be applied for repeat offences. These penalties can also be applied for each additional violation[5].

The E-commerce Rules, 2020 is a regulatory framework which governs the goods and services bought online. It prohibits all sorts of unfair trade practices causing the dominant position of one particular company. Rule 4(3)[6] provides that “ No e-commerce entity shall adopt any unfair trade practice, whether in the course of business on its platform or otherwise.”

On June 15, 2023 the Advertising Standards Council of India, a self-regulatory body released the guidelines called the “Guidelines for Online Deceptive Design Patterns in Advertising”. It aimed to prevent drip pricing, which is the concept of deceiving the consumers from the actual prices at the end. The practice of baits in online advertisements were also prohibited by the guidelines or providing alternative products instead of the original one. Alongside these prohibitions, the guidelines also focussed on preventing disguised advertisements from other sites in the product page.

Guidelines for Prevention and Regulation of Dark Patterns, 2023

The central consumer protection authority exercises of its powers under Section 18 of the Consumer Protection Act, 2019[7] and issued the guidelines on November 30th, 2023. The guidelines define dark patterns as :

“ “Dark patterns” shall mean any practices or deceptive design patterns using UI/UX (user interface/user experience) interactions on any platform; designed to mislead or trick users into doing something they originally did not intend or want to do; by subverting or impairing the consumer autonomy, decision making or choice; amounting to misleading advertisement or unfair trade practice or violation of consumer rights;”[8]

Under Section 5 of the guidelines, if any person or platform does something that is under Annexure I, will be said to have engaged in dark patterns. Annexure I of the guidelines contains the specified dark patterns which are strictly prohibited. There are in total 10 specified dark patterns which are prohibited.

Specified Dark Patterns :

The CCPA has outlined specific deceptive designs or illustrations as to what constitutes a dark pattern, they are[9] :

  1. False Urgency : It means falsely implying the product is running out of stock or creating a sense of urgency to mislead a user into buying the product. For example, A website showing only 2 are in stock while 30 others are looking to buy the same thing falsely is prohibited.
  2. Basket sneaking : It means the inclusion of additional products which was not added by the user during checkout wherein the total amount payable has increased as a result. However, in the proviso it was mentioned that providing complementary samples is not basket sneaking.
  3. Confirm Shaming : It means when the provider uses shame, guilt or fear in the user for not buying or using their product. For example, A platform that adds a charity in the basket using a phrase “charity is for rich, I don’t care.” would be deemed as a dark pattern.
  4. Forced Action : It means when the user is forced to take some action which would require them to buy an additional product or sign up for a service. Eg: Forcing the user tp subscribe to a newsletter to purchase a product.
  5.  Subscription trap : This occurs when the user is unable to cancel their subscription or when the process is too lengthy or elaborate. It also includes forcing auto-debits without easy cancellation policy.
  6. Interface interference : It means designing a feature wherein the user is manipulated into doing something they normally wouldn’t do if not for the feature. For example, An ‘X’ icon on the top-right corner of a pop-up screen leads to opening-up of another ad rather than closing it.
  7. Bait and Switch : It refers to the practice of advertising a particular outcome based on the user’s action but deceptively serving an alternate outcome. Eg : A seller offers a quality product at a cheap price but when the consumer is about to pay/buy, the seller states that the product is no longer available and instead offers a similar looking product but more expensive.
  8. Drip Pricing : Means when the prices are changed or different while checkout would be referred to as a dark pattern.
  9. Disguised advertisement : It means a practice of posing, and masking advertisements as other types of content such as user-generated content or new articles or false advertisements.
  10. Nagging : It refers to when a website causes a lot of interruptions while browsing such as requests, options, information which are unrelated to the purchase disrupting the intended transaction. Eg : Websites asking a user to download their app, again and again.

Conclusion

This guideline can act as a step towards transparency in the e-commerce market regime of India. However, it also requires the authorities to keenly ensure companies follow it and in the right circumstances curb these actions. The objective of the guidelines is to provide a better online experience to users and prevent them from exploitation. The same can only be brought into reality if there is proper enforcement.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Written by- Sanjana Ravichandran

[1] Gargi Sarkar, Govt Issues List of 13 Dark Patterns Plauging Ecommerce Websites, INC42 (Dec 04, 2023) https://inc42.com/buzz/govt-issues-list-of-13-dark-patterns-plaguing-ecommerce-websites/

[2] The Consumer protection Act, 2019 No. 36, Acts of Parliament, 2019 (India)

[3] Sec 47, “unfair trade practice” means a trade practice which, for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, adopts any unfair method or unfair or deceptive practice. The Consumer protection Act, 2019 No. 36, Acts of Parliament, 2019 (India)

[4] Advait Luthra, Ananya Mishra, India: ASCI Guidelines On Dark Patterns And The Way Forward, MONDAQ, (Aug 29, 2023) https://www.mondaq.com/india/dodd-frank-consumer-protection-act/1358384/asci-guidelines-on-dark-patterns-and-the-way-forward#:~:text=Dark%20patterns%20are%20basically%20user,for%20reviews%2C%20and%20so%20on.

[5] The consumer Protection (E-commerce) Rules, 2020.

[6] The consumer Protection (E-commerce) Rules, 2020.

[7]  Guidelines for Prevention and Regulation of Dark Patterns, 2023

[8] Section 2(6) of Guidelines for Prevention and Regulation of Dark Patterns, 2023.

[9] Annexure 1 of  Guidelines for Prevention and Regulation of Dark Patterns, 2023.

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