CEAI urges govt to change definition of 'Indian company'

"CEAI, the apex body of consulting engineering professionals in the country, has urged the government to immediately change the definition of Indian company in the Companies Act to make the country Atma Nirbhar Bharat,” said CEAI President Amitabha Ghoshal. As per the Companies Act, presently any company registered in India and paying taxes is considered an Indian entity.

Consulting Engineers' apex body CEAI on Monday urged the government to change the definition of Indian company wherein Indian nationals should have at least 51 per cent stake. Presently, any company registered in India and paying tax is considered Indian, Consulting Engineers Association of India (CEAI) said in a statement.

There is need to change the definition of Indian company under the Companies Act by making it mandatory to have a minimum 51 per cent shareholding by Indian nationals or entities, it added. "CEAI, the apex body of consulting engineering professionals in the country, has urged the government to immediately change the definition of Indian company in the Companies Act to make the country Atma Nirbhar Bharat,” said CEAI President Amitabha Ghoshal.

As per the Companies Act, presently any company registered in India and paying taxes is considered an Indian entity. This provision allows foreign companies to register themselves in India, pay taxes and carry the profits home, the statement said. "While it is okay for them to operate as subsidiaries, the current definition allows such companies to enjoy all benefits provided to Indian companies, especially the MSMEs,” K K Kapila, former CEAI president said. Mumbai’s Transport and Infrastructure Development Authority (MMRDA) recently cancelled the bidding process for design, manufacture, supply, testing and commissioning of 10 monorail rakes due to the reason that both the bids it had received were only Chinese manufacturers, the statement said.

It apprehended that these manufacturers can set up a wholly owned subsidiary and based on the current definition, be an “Indian Company” and again enter the bidding process. “Therefore, the immediate need is that the definition of Indian Company is modified to reflect its Indian status by having a minimum of 51 per cent shareholding by Indian nationals or entities,” Kapila argued.

According to the statement, that Prime Minister Narendra Modi’s Atma Nirbhar Bharat Campaign and vision will truly come into spirit where the real Indian companies - Indian owned companies - are able to manufacture, provide services and avail the various benefits extended by the government, including those for MSMEs. MSME benefits must be restricted to truly ‘Indian owned companies’ and not all Indian Companies, as the definition and provisions stand today, Kapila said. CEAI represents the Indian Engineering Consultancy professional at the International Federation of Consulting Engineers (FIDIC). Its membership comprises practicing consultants, private and public sector firms engaged in the entire range of engineering consultancy services. It has 300 members..