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By Travis Kliever
Updated March 10, 2024

Doing Business in India

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India stands as one of the fastest-growing major economies globally, thanks to a surge in recent developments in the IT sector, manufacturing industries, and service sectors. Its economy is multifaceted, with notable contributions from the urban and rural sectors. Traditional industries such as agriculture and modern sectors like digital services coexist, offering diverse business opportunities. Doing business in India is becoming popular for companies across various sectors and industries.

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Statistics about the Economy of India

As of the most recent data, India exhibits a promising economic landscape. It is the world’s third-largest economy by purchasing power parity (PPP) and maintains a steady growth trajectory. The services sector is a substantial contributor to the GDP, followed by industries such as manufacturing and agriculture. The government has initiated various policies to foster a friendly business environment and propel economic growth.

Statistic	Value
Rank by Nominal GDP	5th
Rank by PPP GDP	3rd
Nominal GDP	$3.732 trillion
PPP GDP	$13.119 trillion
GDP Growth Rate (FY 2022/23)	6.90%
GDP Growth Rate (FY 2023/24)	6.3% (projected)
Per Capita Income (Nominal)	$2,629
Per Capita Income (PPP)	$9,309
Inflation Rate (CPI)	7.0% (October 2023)
Unemployment Rate	7.8% (September 2023)
Ease of Doing Business Rank	63rd (out of 190)
Major Economic Sectors (GDP Contribution)	Agriculture (16.38%), Industry (29.34%), Services (54.27%)
Current Account Balance	-$38.7 billion (2021-22)
Public Debt to GDP Ratio	83% (2022-23 est.)

The World Bank, the IMF, the Centre for Monitoring Indian Economy (CMIE), and Deloitte were used as sources for this information.

Why to Consider Doing Business in India

Doing business in India comes with a plethora of advantages including a vast consumer market driven by a burgeoning middle class. The nation’s democratic setup, strategic location, and abundant natural resources offer a conducive environment for businesses. Furthermore, government initiatives such as “Digital India” and “Make in India” encourage entrepreneurial endeavors and foreign investments, facilitating business operations in the country. Indian business culture is also highly entrepreneurial and with such a burgeoning Indian market at the fingertips of businesses operating there, companies have huge opportunities, even in new sectors.

Top Reasons for Doing Business in India:

India’s booming economy and vast untapped potential offer a plethora of opportunities for businesses across various sectors. Here are some of the most compelling reasons to consider India for your next venture:

1. Massive and Growing Market:

5th largest nominal GDP globally and 3rd largest by PPP, with projections of surpassing Japan and Germany by 2027.
Young and expanding middle class: exceeding 300 million individuals and poised for further growth, creating robust consumer demand.
Rapidly urbanizing population: creating new centers of economic activity and demand for various services and goods.

2. Competitive Workforce:

Largest English-speaking population outside the US, facilitating communication and knowledge transfer.
Ample skilled and educated workforce: in fields like IT, engineering, and healthcare, at competitive costs.
Strong entrepreneurial spirit: fostering innovation and adaptability within the Indian business landscape.

3. Government Reform Efforts:

Improved Ease of Doing Business Rank: climbing to 63rd out of 190, simplifying regulatory processes and attracting foreign investment.
FDI liberalization: opening up more sectors for foreign investment and easing restrictions.
Infrastructure development initiatives: improving connectivity and logistical efficiency across the country.

4. Strategic Location:

Gateway to South Asia: offering access to a regional market of over 1.8 billion people.
Well-connected with major trade routes: air, sea, and land links facilitating global trade and partnerships.
Emerging manufacturing hub: “China+1” alternative for companies seeking diversification and cost-effectiveness.

5. Diverse and Vibrant Economy:

Strong growth across various sectors: including IT, pharmaceuticals, manufacturing, agriculture, and tourism.
Significant government investment in key areas: like renewable energy, education, and healthcare, creating potential partnerships and market opportunities.
Rising tech innovation: India is a hotspot for startups and technological advancements, fostering a dynamic business environment.

Remember: While India offers immense potential, conducting thorough research and understanding the specific challenges of the market are crucial before entering. However, for businesses willing to adapt and navigate the unique landscape, India can be a springboard for significant growth and success.

Business Culture in India

India’s vibrant business landscape thrives on a unique blend of tradition and modernity. Understanding its cultural nuances can pave the way for fruitful collaborations and successful ventures. Here are some key points to remember:

Relationship-driven: Building strong personal relationships is paramount. Invest time in getting to know your counterparts, fostering trust and mutual respect. Patience and genuine warmth go a long way in establishing rapport.
Hierarchical: Indian society, including professional settings, has a hierarchical structure. Be mindful of addressing individuals by their appropriate titles and respecting positions of seniority.
Indirect Communication: Communication in India can be more indirect than in Western cultures. Pay attention to non-verbal cues and subtle expressions. Openly voicing disagreements or strong opinions may be seen as disrespectful.
Formal Attire: While business dress codes are becoming more relaxed, professional attire remains important. Opt for neat and conservative clothing, especially during initial meetings.
Gift-giving: Gift-giving can be a symbol of goodwill and appreciation in India. Small, thoughtful gifts are common, but avoid extravagant offerings that could be misconstrued as bribery.
Time is Fluid: Meetings may not always start or end promptly, and deadlines can sometimes be flexible. Adapt to a more fluid approach to time management while maintaining professionalism.
Negotiation with Patience: Negotiations in India can be a lengthy process with back-and-forth discussions. Be prepared for a patient approach, focusing on building consensus and finding win-win solutions.
Embrace Diversity: India is a land of immense cultural diversity. Be open to different perspectives, customs, and linguistic variations. Sensitivity and respect go a long way in navigating this vibrant tapestry.
Celebrate and Adapt: Indian business culture is a dynamic journey. Embrace the unexpected, celebrate small wins, and be prepared to adapt your approach. With an open mind and a genuine interest in understanding the unique rhythm of Indian business, you can forge lasting partnerships and achieve success.

Cultural understanding is a continuous learning process. By respecting local customs and adapting your approach, you can navigate the exciting world of Indian business with confidence and build fruitful relationships.

Networking in India

Networking in India is an art form, a blend of tradition and modern innovation. Here are some key aspects to ace your networking game in this vibrant land:

Go Beyond Online: While online platforms like LinkedIn play a role, face-to-face interactions are crucial. Attend industry events, conferences, and workshops to connect with potential partners and collaborators.
Leverage Professional Groups: Join industry associations, alumni networks, and business chambers to meet like-minded individuals and access relevant events and opportunities. Ask for detailed information in important topics like intellectual property, special economic zones, and dealing with foreign investors.
Tap into the Power of Referrals: Recommendations from trusted contacts carry significant weight. Build strong relationships with colleagues, mentors, and clients who can introduce you to valuable connections.
Master the Art of Relationship Building: Invest time in genuine conversations (not small talk), listen actively, and offer value before seeking it. Remember, it’s not just about what you can get, but what you can contribute to the network of experienced professionals in which you operate.

More tips for networking in India:

Embrace Diverse Connections: Don’t limit yourself to your immediate industry. Cross-pollination of ideas and connections can lead to unexpected opportunities. Be open to networking with individuals from different backgrounds and sectors.
Utilize Social Media Strategically: Maintain a professional online presence, actively engage in industry discussions, and tailor your content to attract relevant connections. Always maintain a balance between online and offline engagement – information technology is not the be all and end all! Foster innovation in your offline networks as well.
Follow-up is Key: Strengthen connections by following up after meetings with personalized messages and staying in touch through regular communication. Networking is a continuous process, not a one-time event.
Mind the Cultural Nuances: Respect hierarchical structures, address individuals by their proper titles, and adapt to indirect communication patterns. Be patient, adaptable, and demonstrate genuine interest in building long-term relationships. Show a commitment to growing relationships with investors, communities, consumers, and the team you’re working with, embracing cultural differences and striving for significant improvements in cultural understanding.
Seek Out Mentors and Champions: Find experienced individuals who can guide you through the networking landscape and advocate for you within their circles. Their insights and connections can be invaluable in accelerating your career journey.

By immersing yourself in the unique tapestry of Indian networking, you can build bridges to new opportunities, access valuable knowledge, and establish yourself as a trusted player in the dynamic Indian business ecosystem. Remember, networking is a continuous journey, so embrace the process, build genuine connections, and watch your professional network flourish.

How to Hire in India

The hiring process in India is facilitated through various channels such as job portals, recruitment agencies, and headhunters. It is crucial to abide by the labor laws of the country which govern contractual agreements, working hours, and employee benefits. India boasts a considerable talent pool with a wide array of skills, providing businesses with ample choices to find the right candidates.

Introducing the Employer of Record and PEO Solution

Employer of Record (EOR) and Professional Employer Organization (PEO) solutions offer businesses an efficient alternative to setting up a legal entity in India. These solutions manage various administrative and compliance tasks, allowing companies to focus on their core competencies. Utilizing EOR and PEO solutions can fast-track market entry and reduce operational complexities.

How to Get a Work Visa

Obtaining a work visa involves securing a job offer from a recognized employer in India. Essential documents for the application include a letter of invitation from the employer and proof of the applicant’s expertise in the relevant field. Processing times can vary, and it is advised to apply well in advance to mitigate any delays.

How to Register a Company

Company registration in India follows a systematic process, involving obtaining a Director Identification Number (DIN), registering the company name, and acquiring necessary approvals from the Ministry of Corporate Affairs (MCA). Following this, the company must register for tax codes and adhere to the regulatory compliances to ensure smooth operations.

How to Acquire Real Estate for Business

Acquiring real estate for business purposes necessitates careful due diligence to verify the legality of the property and to ensure it meets all the requisite norms. Collaborating with experienced real estate consultants and legal advisors can facilitate a hassle-free acquisition process.

Conclusion

Embarking on a business venture in India promises substantial rewards given its dynamic and rapidly evolving market. While the journey may entail navigating through diverse cultures and regulatory norms, a nuanced understanding of the local business environment coupled with strategic planning can pave the way for successful business operations in India. It is a land of burgeoning opportunities, ready to welcome entrepreneurs and businesses with a landscape rich with potential.

Article By

Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.