Market entry into India

Market overview

Foreign businesses may enter India through direct cross-border supply, an Indian-incorporated company, registration of a branch or liaison office where permitted, or arrangements with distributors, importers, agents, licensees, and local partners. The appropriate pathway depends on the proposed activity, foreign-investment route, sector restrictions, tax exposure, staffing, imports, premises, and state-specific operating requirements.

Typical entry routes

• Direct export or cross-border supply from New Zealand
• Indian-incorporated wholly owned subsidiary or joint venture
• Branch office where permitted and approved
• Liaison office for qualifying non-revenue-generating activities
• Project office for an eligible project
• Distributor, importer, agent, franchise, licensing, or commercial partnership
• E-commerce or remote service delivery, subject to applicable Indian requirements

Key regulatory issues

• The proposed activity should be checked against the applicable foreign-investment route, sector caps, conditions, and approval requirements
• Ownership, control, beneficial ownership, and investor-jurisdiction considerations may affect the investment pathway
• Federal, state, municipal, sector, labour, environmental, land, and premises requirements may apply concurrently
• Products may require registration, standards certification, testing, labelling, import licensing, or authority approval
• Employment, immigration, consumer, competition, privacy, data, advertising, and intellectual-property requirements may apply
• The operating model should be confirmed before capital, contracts, staffing, imports, premises, or distribution arrangements are committed

Registrations and filings

• Company-name reservation and incorporation through the Ministry of Corporate Affairs
• Corporate Identity Number and supporting incorporation registrations
• Permanent Account Number and Tax Deduction and Collection Account Number
• Declaration for commencement of business where applicable
• GST registration in the relevant state or union territory where required
• Import Export Code and ICEGATE registration where the business will import or export goods
• Sector licences, product registrations, employer filings, labour registrations, premises, and state or local approvals where applicable

Customs and trade

• Confirm the Indian importer and responsibility for customs clearance
• Obtain and maintain the required Import Export Code
• Register for the appropriate ICEGATE customs services and electronic filing access
• Classify goods under the Indian customs tariff and determine customs value and origin
• Identify prohibited, restricted, licensed, inspected, standards-controlled, or certification-dependent goods before shipment
• Prepare invoices, packing lists, transport documents, origin evidence, licences, certificates, and technical materials
• Assess customs duty, social-welfare surcharge, integrated GST, compensation cess, and available trade-agreement treatment
• Coordinate filing, assessment, inspection, tax payment, release, and recordkeeping with authorised customs and logistics providers

Tax considerations

• Assess corporate-income-tax and permanent-establishment consequences of the selected operating model
• Determine GST registration, invoicing, return, payment, and state-specific compliance obligations
• Consider non-resident taxable-person registration where temporary taxable activities are conducted without a fixed place of business
• Identify withholding-tax obligations relating to services, royalties, interest, employment, and payments to non-residents
• Review treaty, transfer-pricing, related-party, financing, management-fee, royalty, and profit-repatriation considerations
• Consider customs taxes, payroll, employee taxation, social-security, and state-level levies
• Establish compliant accounting, invoicing, tax-return, payment, reconciliation, documentation, and recordkeeping processes

Common pitfalls

• Selecting an entity before confirming the applicable foreign-investment route and sector conditions
• Assuming incorporation alone completes tax, sector, state, labour, and local operating requirements
• Using a liaison office for revenue-generating or commercial activities
• Beginning operations before filing the required commencement declaration
• Shipping goods before confirming import licensing, standards, certification, labelling, and product-registration requirements
• Registering for GST in the wrong state or failing to account for multi-state activities
• Underestimating state, municipal, employment, premises, and continuing filing obligations
• Allowing company, tax, customs, banking, and regulatory records to become inconsistent