In this episode, Lyndsey talks with Mr. Mukesh Butani and Ms. Madhura Bhat from BMR Legal in India. BMR Legal is a leading boutique/attorney firm specializing in corporate international tax and transfer pricing and also advising on Indian Foreign Direct Investment (FDI) policies. Mr. Butani is the Founder and Managing Director of BMR Legal with significant experience in advising Fortune 500 multinationals and large Indian business houses on a wide range of matters relating to FDI policy, business re-organizations, corporate international taxation, cross-border tax structuring, tax controversy and regulatory policy across a range of sectors. Mukesh has several authorships to his credit, including works published by Lexis Nexis Butterworths and a treatise on Transfer Pricing Dispute Resolution for the Cambridge University Press; and has co-authored for the International Bureau of Fiscal Documentation (IBFD). Ms. Bhat is a Senior Associate at the firm. She has a strong background in corporate, commercial and insolvency law practice. Mukesh and Madhura practice law before the Indian Supreme Court, High Courts and Tribunals. The conversation starts with India’s significant improvement on World Banks’ “ease of doing business” list position from 2014 to 2019. Mukesh explains that Indian corporate governance framework is defined by its regulation system, and the two most important regulation reform in recent years: Companies Act 2013 and Securities and Exchange Board of India (SEBI) new regulations. Mr. Butani reviews recent years Indian corporate governance (CG) development focus on roles of auditors, accounting and audit standards, independence of board director, function of audit committee and other committees, related party transaction, management outlook of disclosure, and the newly established National Financial Reporting Authority (NFRA). Mr. Butani and Ms. Bhat navigate Indian culture influence to corporate governance social responsibility and gender diversity, and the contribution of traditional Indian family value to business success. Mr. Butani points out that India is the first country in the world requires companies to set-aside certain percentage of net profit for social responsibility purpose. Mr. Butani explains Companies Act 2013’s emphasis on related party transaction, arms’ length standard, transfer pricing policy and Whistleblowing policy, and different levels of supervision mechanism on these issues. Mr. Butani and Ms. Bhat emphasize Indian legal enforcement mechanism, NFRA and SEBI’s roles on regulation enforcement, management and board roles on regulation implement regulations, and Indian authorities’ emphasis on responsibilities of board, management, audit committee, and Indian authorities’ intension to establish an transparent investment environment for foreign investors, using a brief case study of how Indian authority handles two large non-banking entities’ collapse in 2018. Together, they review 2017 goods and service tax (GST) reform, one of the biggest indirect taxation reform in modern Indian history, the journey of the reform, the dispute mechanism. Mr. Butani shares his opinion regarding the achievement and challenges of GST reform, and his prospects of the reform in next 3-4 years. At the end, Mr. Butani advices on business opportunities in Indian market: purchasing power potentials with youth population (65% of population under age of 30), under-developed physical and social infrastructure sectors, and technology advancement in the past two and half decades. Conversation Highlights (with timestamps) - Overview of recent years Indian regulation reforms and corporate governance development focus (4:06) - Indian culture influence to corporate governance social responsibility and diversity (14:15) - Companies Act 2013 reform focus on related party transaction and audit independence (13:40) - Whistleblowing policy and how it helps on related party transaction policy enforcement (18:20)