How to Expand Your Businesses into India

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Atlas Team

Atlas helps innovative companies like yours to expand, onboard, manage and pay international teams in 160+ countries.

Published: 07 Mar 2024

If you’re looking to expand into Asia, India is an ideal central hub, granting access to markets in East Asia, Southeast Asia, and the Middle East. It’s also one of the fastest-growing major economies with no end in sight. In other words: there’s a lot of opportunity in a range of industries—but you’ll need to learn the ropes. 

Like all countries, India has different employment laws, business requirements, taxes, and cultural norms. It can be tricky to navigate, which is why many businesses use an Employer of Record (EOR) to handle the red tape.  

Why Expand into India? 

India is a great choice for global expansion. Though the benefits depend on your overall business goals, this country has a booming economy, a wealth of skilled workers, a relatively low cost of living, and a growing middle class that can increasingly afford name brand goods. Some of the biggest benefits include: 

  • Notable economic growth: India has a huge economy that’s in a period of rapid growth. S&P Global Ratings predict that it will become the world’s third-largest economy within the next decade, while private consumption is also rising year-over-year. 

  • Large consumer market: With a population of more than 1.4 billion people, India has one of the largest consumer markets in the world. This leaves a large opportunity for new businesses to grow. 

  • Language: Though Hindi is the most prominent first language in India, English is the most widely spoken second language. It’s especially common in corporate settings. This limits the language barrier for western companies looking to expand into Asia and helps simplify business operations. 

  • Large pool of skilled workers: India doesn’t just have a booming population. This population happens to be filled with highly skilled workers—whether you’re looking for expert software developers, designers, researchers, or employees in other industries. Culturally, Indian workers are ambitious, and according to a recent survey, 88% of Indian workers view upskilling as integral to career growth. 

  • Strategic location: India is in close proximity to the Middle East, Southeast Asia, and East Asia. As a result, companies often use this country as a gateway to these key markets. The time zone also overlaps with Europe and the United States during business hours, which helps communication across all international operations. 

  • Government initiatives: India has a few different government initiatives that help foreign business owners looking to expand within the country. For example, Startup India offers business development resources for startups, including programs to help further expansion into countries like Taiwan, the UK, and Japan. Similarly, the Direct Line program provides resources to American businesses. 

  • Cost-effective business environment: Compared to regions like the United States, Canada, or the United Kingdom, labour is generally more affordable in India. This can lead to potential cost savings. 

Top Industries in India 

India is no longer the India of yesteryear. Historically, the country was known for industries like steel, textiles, sugar, paper, jute, and cement. Though businesses continue to thrive in those sectors, there’s increasing opportunity for new businesses in other areas: 

  • Life sciences: India is a leader in life sciences—especially pharmaceuticals. As a whole, the pharmaceutical industry in India is worth $50 billion and expected to hit $130 billion by 2030. The country already supplies 40% of generic pharmaceuticals in the US and 25% of all medicine in the UK. It’s also the leading supplier of vaccines globally. This projected growth is supported by various government initiatives that specifically aid pharmaceutical and biotech companies.  

  • Information technology (IT): Part of India’s recent economic growth is due to a booming technology sector. In 2022, it saw the highest growth since 2011. Today, the industry is worth $245 billion, and it’s expected to continue growing at a rate of 11% to 14% through 2026. In other words, there’s plenty of space for new businesses to thrive. In 2022, alone, the Indian tech sector added almost half a million jobs. 

  • Fintech: India has the highest fintech adoption rate in the world – 87% against a global average of 64%. The pandemic created a perfect environment for the widespread adoption of fintech across the country, enabling financial market fluidity. With a reported industry market size of $50 billion in 2021 and an estimated $150 billion by 2025, the fintech industry is booming in India.  

What to Expect with Expansion in India 

Like any country, launching a business requires a lot of paperwork. There’s a list of different laws and processes you’ll need to follow in order to stay compliant. This includes: 

  • Choosing a business structure: Five of the most common business structures in India are sole proprietorship, general partnership, limited liability partnership, one person company (OPC) and private limited company. You could also choose to open an NGO or non-profit. Which one you choose depends on your organizational structure.  

  • Registering your business: You’ll need certain documentation to register your business with the Indian government. This includes a founder agreement, certificate of incorporation, business PAN card, Taxpayer Identification Number (TIN), Digital Signature Certificate (DSC), Goods and Services Taxpayer Identification Number (GSTIN), and proof of address. You may also need other documentation depending on the nature of your business. 

  • Obtaining licenses and visas: Businesses need certain licenses to operate in India. This can get especially complicated for global NGOs. In 2020, the government amended the Foreign Contribution (Regulation) Act (FCRA). Now all NGOs that receive foreign money must have a license, among other restrictions. Additionally, international employees require work visas. 

  • Insurance: Most companies need some kind of insurance to remain compliant. Most commonly, India requires businesses to have worker’s compensation insurance. While commercial general liability (CGL) insurance is not mandatory, it’s a good idea. 

  • Employment contracts: Employment contracts in India can be written or verbal. In India, most employees work 48 hours per week, and overtime is double an employee’s standard hourly rate. There are varying minimum wages depending on the region, job, and seniority. 

  • Required leave: Leave entitlements in India can vary between states and industries, with local governments stating minimum leave entitlements and individual organizations deciding their own paid leave benefits. Depending on the region, employees are also entitled to a number of paid public holidays.  

  • Employment termination: There’s a 30-day notice period for terminating an employment contract for an employee that has worked continuously for at least one year with the same employer, but you can make a payment instead of giving the required notice. Depending on the type of worker, severance may also be a requirement. 

  • Health insurance: India has universal healthcare for all citizens, but some employers choose to offer private health insurance as part of a competitive benefits package. 

The above points generally reflect the federal requirements for expansion into India, but each state has their own variations. Clarifying the distinct requirements and regulations of the states you wish to expand into is of great importance – and this is where an EOR can help. 


Streamline Indian Expansion With an EOR 

Most businesses aren’t experts in foreign compliance. It’s something that either takes a lot of research or significant outsourcing. That’s where an EOR comes in. Atlas already has a large pool of worksite employees (WSEs) in India, so we’re well-versed in local business operations. We handle the red tape; you handle the core of your business. Some of the other benefits of working with an EOR include:

  • Better compliance: India does have a speedy business registration process compared to other countries, but there’s still a lot of paperwork. An EOR will handle the legal HR and administrative work to ensure your business is fully compliant, which includes onboarding worksite employees, tax registration, and visa applications for international employees. 

  • Flexibility: There’s typically no fixed-term contract when you use a direct EOR like Atlas. This allows you to test a short-term project in a new market.   

  • Better employee experience: In an era where remote and hybrid work attract the best talent, Atlas’ visa and global mobility services can help your employees work from anywhere. In addition, the Atlas HXM platform makes it easy for employees to manage their work lives via a centralized platform. 

  • Save costs and time: Though India is relatively affordable compared to areas like the United States or United Kingdom, there’s still typically a minimum investment for foreign businesses. An Employer of Record can help you save on startup costs. They’ll also accelerate the time-to-market which, in turn, saves money.   

  • Cultural considerations: Cultural awareness is one of the biggest hurdles during global expansion. Companies need to adapt. Though there typically isn’t a huge language barrier in India, there are still cultural considerations that an EOR can help you understand. 

Need a step-by-step guide for going global?

Try Atlas’ comprehensive EOR handbook. 

Download the EOR Handbook



The information contained in this article is intended for informational purposes only and is not intended to be construed as legal advice. The content is provided as updated at the time it was published only without any warranty of any kind, expressed or implied. Atlas is not a law firm and the material provided should not be used in lieu of professional legal consultation. It is recommended that readers seek legal advice from a qualified attorney or legal expert for guidance on any legal issues addressed in this article. Atlas shall not be responsible for any damages or problems that may arise from the use of the information provided in this article.