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How old colonial laws stifle modern Indian businesses

Indian soldiers ride their camels in front of the Presidential Palace during the full-dress rehearsal for Indian Republic Day celebrations last January. Indian businesses are still getting entangled in laws enacted during the country's colonial era.

B MATHUR/B MATHUR/REUTERS

S.K. Ghai signed off on a shipment of textbooks bound for Rwanda last week, a $50,000 (U.S.) order for his Delhi firm, Sterling Publishers Pvt. Ltd. Outsourced publishing now makes up a third of the company's revenue.



But instead of being loaded on to a ship bound for Africa, the books wound up stacked in a government warehouse: customs officials informed Mr. Ghai that the books broke the law and could not be sent.



He can perhaps be forgiven for not being au courant with the relevant law, since it dates from 1867. And his tale of woe is a reminder that India still has a considerable way to go in modernizing its business regulatory environment.

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The Press and Registration of Books Act, which snared his shipment, was originally intended to control the printing of nationalist material -- that is, items that concerned colonial rule and its injustices. It requires that all printed material be stamped with the name and address of the firm that printed it.



These books do not contain that information because Sterling was specifically asked by the buyer asked to leave it off: the Rwanda purchaser contracted the order for 800,000 books to a Ugandan firm, which in turn hired Sterling -- but asked that the books not indicate they were printed in India.



Mr. Ghai understands that: otherwise, the Rwandans might come to him directly next time, eliminating the Uganda middleman. Sterling is an honourable firm, and they didn't stamp the books.



But some stickler at Customs noticed, and that left the boxes of texts stacked up in a warehouse, caught by a law that never envisioned India as a global outsourcing hub.



"In 1867 there was no occasion for India to print for the world -- that all started in the last five to 10 years, and since that this problem kept on coming time and again," said Mr. Ghai, who is Sterling's managing director.



In the past, Mr. Ghai said, some publishers have handled this problem by paying "hush money", but he refused to do it. Instead, he took on the bureaucracy. He met many sympathetic officials who agreed the law was archaic, but refused to exempt cases like his. "They said, 'Change the Act,'" he said with a sigh. "That will take years. I have books that need to go into a container."



Mr. Ghai said the oustource publishing business is booming in India -- the main competitor is China, but because India is English-speaking, companies such as his are able to offer pre-press services, he said, which makes them more attractive.

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It's a quintessentially 21st-century business. With some antique challenges. "We told the [officials]that we have a modern business and this is a very old law," Mr. Ghai said. "But they said, What the Act says, we will go by it.'"



Finally, the Ministry of Finance put it in writing that export consignments of books are exempt from the 1867 act.



And the Rwandan books set sail.



"I think we have resolved the problem once and for all," Mr. Ghai said - at least for this law.

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Latin America Bureau Chief

Stephanie Nolen is the Latin America correspondent for The Globe and Mail.After years as a roving correspondent that included coverage of the wars in Iraq and Afghanistan, Stephanie moved to Johannesburg in 2003 to open a new bureau for The Globe, to report on what she believed was the world's biggest uncovered story, Africa's AIDS pandemic. More

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