Kolkata, the financial hub of East India that suffered from de-industrialisation in the 1970s, has enjoyed a comeback in recent years.
PwC expects Kolkata’s GDP to nearly triple by 2025. By that same year, the metropolitan area’s population of about 14.1 million is predicted to grow to 20.6 million.
A well-educated talent pool and booming IT sector are contributing to the growth.
“The government is laying greater emphasis to create a sustainable environment for the development of micro, small and medium enterprises in food processing, textiles and apparel, leather and handicrafts, and the tourism sectors,” says Debasish Biswas, the Chartered Institute of Management Accountants’ chief representative in India.
- Corporate tax: Basic rate of 30% for domestic companies and a basic rate of 40% for foreign companies. Many Indian municipalities offer tax incentives, but Kolkata offers only a few.
- Minimum wage: Indian state governments set separate minimum wages, which vary by sector. The daily minimum wage in West Bengal varies from INR 150 (about $2.50) for unskilled cinema workers to INR 7,708 ($130) for chartered accountants.
- Office rent: Space in Kolkata’s central business district costs about INR 120 ($2) per square foot per month.
- Industrial rent: Average rental rates in the region’s main warehousing hub are about INR 16 ($0.27) per square foot per month.
Ease of use
The World Bank’s Doing Business 2014 report ranked India 134th out of 189 economies.
- Average time required to start a business: 27 days. The Organisation for Economic Co-operation and Development average is 12 days.
- Construction permits: India ranks 182nd. The process takes an average of 168 days.
- Securing electricity: India is ranked 111th. It takes an average of 67 days to establish a permanent electricity connection.
- Trading across borders: India is ranked 132nd. It takes an average of 16 days to export goods and about 20 days to import goods.
- Transparency International corruption index: India is ranked 94th out of 182 countries.
On the ground
Tirtha Chakravarti, ACMA, CGMA, founder and director of SAPGenie Consultants, and Purusottam Sen, ACMA, CGMA, professor of finance and control at the Indian Institute of Management, offered these tips for doing business in Kolkata:
- Try to have a physical presence in Kolkata. Otherwise, the gap in communication can be difficult.
- Kolkata is very bureaucratic; there is a labyrinth of rules and regulations. Employ the services of a local partner or adviser.
- If possible, locate the business in a new industry park, such as Salt Lake Sector V or New Town. These have the necessary infrastructure to support developing businesses.
- Displays of affection and inappropriate attire are frowned upon. Try to remain conservative.