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    indiaglobal-corresp062414.htm

India Globalization Capital, Inc.

4336 Montgomery Avenue

Bethesda, Maryland 20814

Phone: 301-983-0998

Fax: 240-465-0273

June 24, 2014

VIA EDGAR

Securities and Exchange Commission

100 F. Street, N.E.

Washington, D.C. 20549

Attn:  Ms. Tia Jenkins

Senior Assistant Chief Accountant

Office of Beverages, Apparel and Mining

 Re:

India Globalization Capital, Inc.

Form 10-K for the Fiscal Year Ended March 31, 2013

Filed July 16, 2013

Form 8-K Filed January 31, 2014

Response Dated April 28, 2014

File No. 001-32830

Dear Ms. Jenkins:

This is our response to the SEC Staff’s comments in your letter of May 27, 2014 to India Globalization Capital, Inc. (“IGC”) regarding the above-referenced filings.  We intend to file an amended 10-K for the fiscal 2013 after all comments of the SEC staff are cleared.

For your convenience, we have included each of the Staff’s comments in italics before each of IGC’s responses.  References in this letter to “we,” “our” or “us” mean IGC or our advisors, as the context may dictate.

Form 10-K for the Fiscal Year Ended March 31, 2013

General

1. We note your response to comment 3 from our letter dated April 2, 2014 and we partially reissue the comment.  Supplementally please provide the asset valuation for your mineral properties that you used to assess the materiality of these properties with respect to Industry Guide 7 property disclosure.  For the purposes of this materiality determination, your mining and processing operations are defined to include extraction and all later-stage processing (or beneficiation) and refining facilities in your vertically-integrated operations up to the point of significant commercial sales.

Additionally, we note your statement indicating that all revenues are associated with trading activities in India and China.  Please enhance the description of your trading business by including a brief summary of the tonnes and grade of material purchased, the tonnes and grade of material sold, the average cost of materials purchased, the average price of materials sold, and an overview of your trading operations, including infrastructure, pursuant to the Instructions to Item 102 of Regulation S-K.

IGC answer:

The Company is not engaged and doesn’t intent to engage in significant mining operations falling within the meaning of Industry Guide 7.  Our subsidiary in Inner Mongolia, in which we own 95% equity, has two beneficiation plants and one under construction. These plants were not operational in fiscal 2013.  Further, in fiscal 2013 the Company had no beneficiation activity. Our activity was limited to identifying sources for raw materials that could be purchased for processing using our plants.

In the table disclosed under Note 14 of our financial statements (reproduced below for your convenience), we show a total PP&E of $8,184,230.  Of this amount, the value of the three beneficiation plants in China including the one under construction (under capital work-in progress) is $8,116,570.

The plants are located on 2.2 square kilometers in southwest Linxi in the autonomous region of eastern Inner Mongolia, under the administration of Chifeng City, Inner Mongolia.  The plants are 250 miles from Beijing, 185 miles from Tianjin Port and 125 miles from Jinzhou Port and well connected by roads, planes and railroad.  The subsidiary has title to all the equipment and the lands on which the plants are located are rented from the farmers as per the rules in China.

NOTE 14 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

As of March 31,

2013

2012

Land

$

12,069

$

11,226

Buildings

1,328,413

309,585

Plant and machinery

9,396,659

9,371,150

Furniture and fixtures

121,943

88,804

Computer equipment

217,659

219,110

Vehicles

569,352

474,622

Office equipment

166,924

228,794

Capital work-in-progress

4,288,468

3,918,729

$

16,101,488

  $

14,622,020

Less: Accumulated depreciation

 $

(7,917,258

)

  $

(6,130,224

)

 Total

$

8,184,230

$

8,491,796

Approximately 83% ($6.7 million) of our total revenue in fiscal 2013 was from trading of iron ore in China. The table below gives a brief overview of the trading operations in China:

Tons and Grade of Iron Ore purchased

Tons and Grade of Iron Ore Sold

Average Cost of Material Purchased

Average Price of Material Sold

57,985 tons of 61+% Fe content Iron ore

57,985 tons of 61+% Fe content Iron ore

$111 per ton

$115 per ton

The following are the relevant features of the trading activities carried out by our subsidiary in China:

1)

The company carries out its trading activity based on purchase orders placed by local buyers (local traders and steel mills) in and around Inner Mongolia and our Chinese subsidiary in turn places orders with its listed vendors, located locally. There are no long-term contracts both for the purchases and sales made by the subsidiary. During fiscal 2013, the subsidiary did not carry out any value addition to the iron ore sold and the purchases were made based on spot pricing of iron ore.

2)

With respect to the transportation and storage of goods, our subsidiary contracts with local transportation agents for the transportation of goods and rents space for storage of iron ore.  The infrastructure used for this operations are warehouses and pieces of secured land all which were rented.  We have no long term contracts for the warehouses or the secured land.

2. We note your response to comment 4 from our letter dated April 2, 2014 stating that you have an interest in five acres of property in India.  Additionally we note in certain instances in your disclosure you reference ownership in other properties.  For example on page 4 you disclose that through IGC Mining and Trading Private Limited (IGC-IMT) you operate iron ore shipping hubs and that through IGC Logistics, Private Limited (IGC-LPL) you conduct a quarrying business.  On page 5 of your proposed disclosure you state that in China you own and operate iron ore beneficiation plants and iron ore mines. Please advise.

IGC answer:

In India, through our subsidiary IGC-IMT, we maintained shipping hubs on both coasts that initially consisted of a rented loading area to store iron ore, some equipment to move iron ore as well as a rented office for the staff.  However, when the Indian mines were shut down we gave up the loading area and cut back to staff with no facilities. In fiscal 2013, we maintained a presence that included a skeleton staff with no facilities or properties in the anticipation that the mines in India will reopen.

Further, through our subsidiary IGC-MPL, the Company in previous years operated rock aggregate quarries and was in the quarrying business through partnerships that included facilities and rock aggregate quarries.  However, we downsized, sold the quarries and machinery and in all of fiscal 2013 we did not own or operate rock aggregate quarries. Still, in fiscal 2013, we maintained a skeleton staff with no facilities or properties, in the anticipation of infrastructure growth in India in the near future.

In China, the Company owns two beneficiation plants and one under construction. As explained in our response to comment one above, these assets are on our balance sheet both as PP&E and capital work-in-progress.  However in fiscal 2013 they were not used to beneficiate any iron ore and thus generated no revenue from operations. Our subsidiary in China has a business license to trade and beneficiate iron ore.  We do not have a mining license.  As such there is no mining activity.  Our activity thus far has been to search for an adequate supply of raw materials.

Item 1A.  Risk Factors, page 8

3. We note from your proposed disclosure for Item 9A, Controls and Procedures, in response to comment 5 of our letter dated April 2, 2014 that you state your Chief Executive Officer and Principal Accounting Officer now are unable to conclude that your disclosure controls and procedures were effective as of March 31, 2014.  Please further revise to state clearly whether your management concluded your disclosure controls and procedures were effective or not effective pursuant to Item 307 of Regulation S-K.  In addition, we re-issue our comment in part.  Please tell us how you evaluated these factors at March 31, 2013 in concluding that both disclosure controls and procedures under Item 307 of Regulation S-K and internal control over financial reporting under Item 308 of Regulation S-K were effective.

IGC answer:

Fiscal 2014:  Our initial conclusion on April 2, 2014 that disclosure controls and procedures were not effective as of March 31, 2014 is based on receiving comments from the Staff.  However, since then, we increased our staff with accounting experts, consultants and lawyers and now our management is able to conclude that our disclosure controls and procedures pursuant to Item 307 of Regulation S-K were effective for fiscal 2014.

Fiscal 2013: Management of the Company conducted a detailed review of disclosure controls and procedures and internal control over financial reporting using the criteria under the COSO Framework. Management conducted the review by using standard checklists taken from well-known and dependable sources, and by testing the internal controls while conducting walk through tests, test of sample transactions and through staff interviews. After this review, Management concluded that for fiscal 2013 the disclosure controls and procedures pursuant to Item 307 of Regulation S-K and internal control over financial reporting under Item 308 of Regulation S-K were effective.

However, based on receiving Staff’s comments for fiscal 2013, management has revised its position and now believes that the disclosure controls and procedures pursuant to Item 307 of Regulation S-K were not effective for fiscal 2013.

4. In your response to comment 5 of our letter dated April 2, 2014, you provided proposed disclosures that state “…..the SEC notified the Company of a potential material weakness in the internal controls……”  This proposed disclosure is not entirely accurate.  Please revise this proposed disclosure to state instead that we asked how you evaluated certain factors concerning your accounting personnel in reaching the conclusion that both disclosure controls and procedures and internal controls over financial reporting were effective at March 31, 2013.

IGC answer:

Please see below the proposed disclosure in Item 9A revised as per the Staff’s comments that we will include in the amendment to the Form 10-K for fiscal 2013:

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive and Principal Accounting Officer (“PAO”), carried out, an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15-d-15(e)) for fiscal 2013.  Based upon that evaluation, the Chief Executive and the PAO concluded that as of March 31, 2013, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we filed or submitted under the Exchange Act (i) was recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) was accumulated and communicated to our management, including our chief executive and PAO, as appropriate to allow timely decisions regarding required disclosure.

We have addressed this matter by hiring accountants with sufficient background in SEC reporting and filing requirements; formalizing accounting and reporting controls and procedures at all our operating units; and providing on-going training to all accounting staff.  In addition we have engaged a legal firm with extensive SEC reporting expertise and an individual with extensive SEC and GAAP reporting experience to review our disclosure controls and procedures and internal controls over financial reporting.

Our management, including our Chief Executive and PAO, do not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, management’s evaluation of controls and procedures cannot provide reasonable assurance that all control issues and instances of fraud, if any, within fiscal 2013 have been detected.

Management's Report on Internal Control over Financial Reporting

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Those rules define internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles  and includes those policies and procedures that: 1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; 2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation  of financial statements in accordance with generally accepted accounting principles, and that out receipts and expenditures are being made only in accordance with authorizations of our management and directors;  and 3) Provide reasonable assurance regarding prevention or timely  detection of unauthorized acquisitions, use or disposition our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting and disclosure controls and procedures as of March 31, 2013. In making this assessment, our management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on our assessment, in light of the comments from the Staff of the SEC, and the fact that maintenance of our accounting records, controls and procedures and of our internal reporting controls and procedures are done by individuals who may not be experts in SEC reporting requirements, we have concluded that as of March 31, 2013, our internal control over financial reporting and disclosure controls and procedures were not effective.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

Item 2. Properties page 11

5. We note your response to comment 7 from our letter dated April 2, 2014 and we partially reissue the comment.  Please provide this information for all geographic locations in which you operate, including India.  Please discuss any encumbrances in obtaining your permits.

IGC answer:

In fiscal 2013, our company operated