After two decades of debate, prime minister Modi’s GST bill was finally passed last summer, and is set to be implemented in July.
India is made up of 29 different states, all with different tax regimes, and for Schiessl a more unified system will have a profound impact on the ease of doing business there.
“India is not one country, and it never has been,” said Schiessl, who manages the firm’s India Equity Opportunities Fund.
“It is incredibly diverse; it is a continent of almost 30 different countries. Introducing a unified tax system across the board will be a real game changer.
“You won’t have to register different tax rates in each state, and businesses can set up a hub and export to other states whereas previously you had to set up a manufacturing facility in virtually every single state.”
Schiessl is most excited by the limiting of the opportunity for graft on India’s blackmarket: “One of the most important developments of this current government is that it knows that to change the culture of corruption takes generations, but it has acted to reduce the opportunity for corruption.”
Indian equities are considered expensive by many. However, Schiessl considers the price warranted.
