Foreign companies investing in India are advised to do a due diligence check, especially if entering into a joint venture, merger and acquisition, or partnership. The due diligence process uncovers critical information relating to the business and its management, thus helping investors decide if they should go ahead with their financial deal, or negotiate better terms and conditions, or withdraw their interest from the target entity or deal. While the due diligence process differs in each sector, the process will include an accurate evaluation of the company’s finances and taxes.
In this issue of India Briefing, we provide information on conducting due diligence in India. We first focus on what is due diligence, and why foreign companies should engage in this process before investing in India. Next, we discuss different types of due diligence and explain their requirements and importance. Lastly, we answer some frequently asked questions.