Doing business abroad and growing internationally is an essential part of a company's business expansion policy. It is governed by a company's aim to diversify its commercial activities across national frontiers and increase its competitiveness. Hence, planning of manufacturing facilities, logistical systems, financial flows and marketing policies in such corporations are done by taking into consideration the entire world as a single market.

Any business transaction that involves persons or firms of more than one country is described as overseas business. In India economic reforms opened up important avenues for promoting global business by Indian entrepreneurs. The first policy governing overseas direct investment was in the form of guidelines issued in 1969. These guidelines defined the extent of participation of Indian companies in projects abroad and were subsequently revised and liberalised from time to time. They aim at providing transparency in the framework of overseas investments. The most important legislation was the Foreign Exchange Management Act (FEMA) which changed the entire perspective on foreign exchange particularly those relating to investment abroad. It changed the emphasis from exchange regulation to exchange management.

Indian companies can directly invest outside India by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity, signifying a long term interest in the overseas entity. It involves setting up a Joint Venture (JV) or a Wholly Owned Subsidiary (WOS) abroad. Under the guidelines, all applications for grant of approval for setting up joint ventures/wholly owned subsidiaries are to be made and processed by the Reserve Bank of India.

In order to make their investments abroad, Indian companies need funds to meet their various capital requirements; to make equity participation in overseas ventures as well as to acquire foreign companies or businesses. Under the Foreign Exchange Management Act (FEMA) and the various notifications issued by the Reserve Bank of India therein, the investments in overseas JVs/WOSs may be funded out of one or more of the following sources:- withdrawal of foreign exchange from an authorised dealer; capitalisation of exports and other dues; external commercial borrowings and foreign currency convertible bonds raised abroad as well as through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs).

Indian entrepreneurs while investing abroad may face various commercial and political risks. To ensure safe and successful overseas expansion plans, it is necessary to provide them a comprehensive insurance cover against all such risks. Accordingly, Export Credit Guarantee Corporation of India Limited (ECGC) was established by the Government of India under the administrative control of the Ministry of Commerce & Industry which provides all such insurance facilities to them.

Also, the Government of India has, so far, signed BIPAs with 62 countries out of which 50 BIPAs have already come into force and the remaining agreements are in the process of being enforced. In addition, agreements have also been finalised and/ or being negotiated with a number of other countries.

Besides, an important legislation called as 'the Arbitration and Conciliation Act, 1996' provides a statutory provision for settlement of all commercial disputes of an enterprise without having recourse to the court of law. In India, the relief against the problem of double taxation faced by an entrepreneur while expanding his/her business abroad has also been provided through schemes of bilateral and unilateral relief.

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