• Access and hire global talent & deploy them anywhere in the world
  • Remove restriction from only hiring from local markets
  • Enter any international market without the requirement of opening a local entity

Expanding into India – which is characterized by an educated and skilled workforce, employment and tax laws, a developing infrastructure network, and leading sectors in agriculture, metal, information technology, real estate, electricity, and healthcare – can bring excitement but also significant stress to ensuring full compliance with the country’s rigorous legal structures and laws.

Indeed, Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework. This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

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India – The Economy

India, officially the Republic of India is a country in South Asia and the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Its geographical location is an ideal launch pad for companies to expand further into Asia, the Far East and the Pacific Rim.

India’s economy has accelerated throughout the 21st century to become the sixth largest globally and a significant global player. India had nominal GDP in 2021 of 2,946 billion US dollars, equating to 3.10% of the global economy. A growth rate of 9.50% made it the world’s fastest-growing economy, while Goldman Sachs predicts that by 2035 only China and the USA will have economies larger than India’s.

Foreign Direct Investment (FDI) is expected to reach between 120-160 billion US dollars annually by 2025, according to statistics from the Department for Promotion of Industry and Internal Trade. It proves a significant attraction for foreign companies planning expansion. 

India has been a member of the World Trade Organization since 1 January 1995 and has one of the world’s highest billionaires and extreme income inequality. Because of several exemptions, barely 2% of Indians pay income taxes.

Small and Medium-Sized Companies

India’s SME sector is considered the backbone of the economy, contributing to 45% of the industrial output and 40% of India’s exports, employing 60 million people, creating 1.3 million jobs every year and producing more than 8000 quality products for the Indian and international markets.

There are approximately 30 million SMEs in India, with 12 million people expected to join the workforce in the next three years and the sector growing at a rate of 8% per year.

According to the provisions of the Micro, Small & Medium Enterprises Development (MSMED) Act, 2006, Micro, Small and Medium Enterprises (MSME) are classified into two classes, i.e., Manufacturing Enterprises and Service Enterprises. The enterprises are further categorized based on investment in equipment and annual turnover.

New Delhi
No. of States/Provinces
28 states; 8 Union Territories (Ladakh, Chandigarh, Delhi, Dadra and Nagar Haveli and Daman and Diu, Jammu and Kashmir, Andaman and Nicobar Islands, Lakshadweep, and Puducherry)
Principal Cities
Mumbai, Delhi, Bangalore, Hyderabad, Ahmedabad, Chennai, Kolkata, Surat, Pune, Jaipur
Hindi and English
Local Currency
Indian Rupee (INR)
Major Religion
Hinduism (80%), Islam (14%), Christianity (2.3%) and Sikhism (1.7%)
Date Format
Time Zone
Indian Standard Time (UTC+5:30) / No Daylight Saving Time
Country Dial Code
1.4 billion
Border Countries
Afghanistan, Bangladesh, Bhutan, China, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
Tax Year
1 April to 31 March
18% and 12% (depending on goods)
Minimum Wage
N/A (minimum wages may be set by state or sector of industry)
Taxpayer Identification Numbers
Permanent Account Number (PAN – Personal) / Tax Deduction and Collection Account Number (TAN – Personal and Businesses) / Taxpayer Identification Number (TIN – VAT Number)
Leading Sectors
Service 53.9%, industry 25.9%, agriculture 20.2%.
Main imports
Refined Petroleum, Packaged Medicaments, Diamonds, Rice, and Jewelry
Main exports
Crude Petroleum, Gold, Coal Briquettes, Diamonds, and Petroleum Gas
Main trading partners
United States, China, United Arab Emirates, Hong Kong, Germany, Saudi Arabia, and Iraq
Government Type
Federal Parliamentary Constitutional Republic
Current President
Droupadi Murmu (since July 2022)

The Main Sectors of the Indian Economy

  • Agriculture – The agriculture sector in India is the primary source of livelihood for about 58% of India’s population and has experienced buoyant growth in the past two years. It is the country’s largest employer of the workforce and accounted for a sizeable 18.8% (2021- 22) in Gross Value Added (GVA) of the country, registering a growth of 3.6% in 2020-21 and 3.9% in 2021-22. India’s agri-exports crossed $50 billion for the year 2021-22. The large population and rising urban and rural income have increased the demand for agricultural products.
  • Auto Components – Indian Auto Component industry exports, valued at $13.3bn in FY21, are expected to reach $80 bn by 2026. USA, Germany, UK, Thailand, and Italy are export destinations. The Indian auto components industry, which currently accounts for 2.3% of India’s GDP, is set to become the 3rd largest globally by 2025.
  • Construction – The Construction industry in India consists of real estate and urban development. This sector is the second-largest employer in India (engaging around 51 million people) and accounts for about 9% of the country’s total GDP. FDI in the construction development sector and activities stood at $26.16 bn and $25.95 bn, respectively, between April 2000 and September 2021.
  • Electronic Systems Manufacturing – With per capita disposable income and private consumption doubling between FY12 and FY21, India has emerged as one of the world’s largest markets for electronic products. The electronic devices industry was valued at USD 118 bn in 2019-20. This sector contributed 2.7% of its total GDP, $10.6 bn in exports in 2020-21, and 16.5 million in direct & indirect employment (2019-20).
  • Healthcare – Healthcare industry in India comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance, and medical equipment. The healthcare sector is growing tremendously owing to its strengthening coverage, services, and increasing expenditure by public and private players. The hospital industry is expected to reach $132 bn by 2023 from $61.8 bn in 2017, growing at a CAGR of 16-17%.
  • ICT – In FY21, the Technology industry employed over 138,000 employees to reach total direct employment of 4.47 million people and contributed 52% to overall services exports. Out of 146 acquisitions in FY21, over 90% were focused on growing digital capabilities. Over 280,000 new digitally skilled employees were added in FY21. At 28-30% of industry revenue, digital revenues grew five times the rate of overall services growth.
  • Metals & Mining – India has extensive reserves of Iron ore, Bauxite, Chromium, Manganese ore, Baryte, Rare earth and Mineral salts. India is the world’s second-largest crude steel and coal producer and the fourth-largest iron ore producer. The Metals and Mining sector in India is expected to witness a significant reform in the next few years, owing to reforms such as the Make in India Campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects.
  • Pharmaceuticals – India ranks 3rd worldwide for production by volume and 14th by value. The pharmaceutical industry in India is currently valued at $41.7 bn. The nation is the largest provider of generic medicines globally, occupying a 20% share in global supply by volume, and is the leading vaccine manufacturer globally, accounting for ~60% of global vaccine demand. India also has the highest number of US-FDA-compliant Pharma plants outside the USA. It is home to more than 3,000 pharma companies with a strong network of over 10,500 manufacturing facilities and a highly-skilled resource pool.
  • Textiles & Retail – The Indian textiles industry is estimated at $100 billion and contributes 13% of industrial output and 2.3% of India’s GDP while employing over 45 million people directly. India’s retail market is worth $1.17 trillion, which contributes over 10% of India’s GDP.
  • Services & Tourism – The service sector makes up 50% of GDP and remains the fastest growing sector in the country. The tourism industry contributes about 9.2% of India’s GDP and employs over 42 million people.

Indian Labour Contracts Laws

International companies hiring employees in India must operate within a fluid mix of employment legislation, following the consolidation of 29 employment statutes into four Codes. The process began in 2019 but will likely stretch into 2023 before full implementation across the nation’s 28 states. The four new pieces of legislation are the Social Security Code (SSC), the Industrial Relations Code (IRC), the Occupational Health, Safety and Working Conditions Code (OHS) and the Wages Code (WC).

General points of Contracts Law include:

  • Employers generally enter into written contracts, although there is no legal requirement to do so
  • Some states stipulate contracts must give written details of wages, job descriptions and working hours
  • Where it has been implemented, the OHS Code requires employers to give appointment letters to every employee, with such information as required by that state’s laws.
  • The SO Act, pending implementation of the new IR Code, stipulates that designated ‘workmen’ must receive at least 21 days’ notice of any detrimental change to their agreement, such as those affecting wages or working hours.
  • Outside of these provisions, working conditions for ‘non-workmen’ will be determined by the written contract between the employer and employee.
  • Central and state labour laws require employers to maintain records of registrations and attendances to be available for inspection by the authorities.

Indian Tax and Labour Authorities

  • Department of Revenue – The Department of Revenue functions under the overall direction and control of the Secretary (Revenue). It exercises control concerning matters relating to all the Direct and Indirect Union Taxes through two statutory Boards, namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC).

    Each Board is headed by a Chairman who is also an ex-officio Special Secretary to the Government of India. The CBDT looks after matters relating to the levy and collection of all Direct Taxes. In contrast, those relating to the levy and collection of Customs Central Excise duties and other Indirect Taxes fall within the purview of the CBIC.

    The two Boards were constituted under the Central Board of Revenue Act 1963. Currently, the CBDT has six Members, and the CBIC has six Members. The Members are also ex-officio Special Secretaries to the Government of India.
  • The Ministry for Labour and Employment – is responsible for formulating and administrating laws and regulations relating to labour and employment. In addition to the Ministry of Labour, Ministries specialized for specific industrial sectors (for example, the Ministry of Power and the Ministry of Mines) cover certain aspects of labour administration, such as safety and particular aspects of social security and welfare, concerning defined groups of workers.


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