Employing in India

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Expanding into
India

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.

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Global Expansion is a step to make for any business, regardless of your goal. But the opportunities that can come with an expansion can be stimulating as well as intimidating and confusing, especially when you consider all of the registration procedures that need to be done and the documentation required.

Going at it without the proper support can increase the costs, time and risks involved.

The legwork and potential red tape can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, primarily through our Employer of Record (EOR) framework.

It can be best utilised when businesses are just beginning their expansion process and require more information before incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to India

Learn all about expanding into India and see what we can do to make your expansion easier.

Download our Guide to India

Learn all about expanding into India and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in India

Hiring Staff
in India

The Main Sectors of the Indian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

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.

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.
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.
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 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%.
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.
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.
ndia 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.
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.
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.

The Main Sectors of the Indian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

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.

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.

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.

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 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%.

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.

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.

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.

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.

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.

Commercial Laws in
India

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).

  • 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.

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.

Commercial Laws in
India

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).

    • 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.

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.

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