ASC Solicitors & Advocates

LEGAL UPDATE Indian Hospitality Industry August 2012

C O R P O R A T E L A W S

Preface: Hospitality is one of the oldest and most complex and commercial activities in the world. India- a country with 5000 years old history, culture, religion, alternative medicine which fascinate both budget and luxury travelers alike. Tourism in India is the third largest foreign exchange earner accounting for 2.5% GDP. The World Travel and Tourism Council (WTTC) have named India as one of the fastest growing tourism industries for next 10-15 years. Hotels in India are broadly classified into 6 categories- (five star, four star, three star, two star, one star & heritage hotels) by the Ministry of Tourism, Government of India, based on the general features and facilities offered. The ratings are renewed every year. Foreign Trade Policies: Hotels & Restaurants are allowed to import duty free equipment & other items including liquor, against their foreign exchange earnings under the Served from India Scheme. Benefits of scheme earned by one service provider of a Group Company can now be utilized by other service providers of the same Group Company including managed hotels. 100% Foreign Direct Investment (FDI) is allowed under automatic route. Many foreign Companies have already entered into partnership with prominent Indian Companies to set up new hotels, motels & holiday resorts. International hotel chains including Sheraton, Holiday INN, Intercontinental, Hyatt, Radisson, Best Western, Days Inn, Hilton, Quality Inn, Ramada Inn, Meridien, Kempenski, Four Seasons Regent, Accor and Marriott International are entering the country or expanding their existing Indian hotel network. The applicable regulations include statutory and regulatory sanctions (or approvals and licenses) from the Central and State departments or agencies as described below:

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Indian Hospitality Industry

August 2012