Setting up Business in India
While looking at the prospect of doing business in India, it would be prudent to see what options are available to a Non Indian company to invest in India. Since 1991, India has undergone a sea of change in its outlook towards foreign investment and global collaboration. Add to that the phenomenon called Internet and you really have an explosive combination. It’s no wonder that software and Internet services have really led India’s outward push.
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While most of the policies are not specific to any industry, there are special provisions that relate only to the IT industry. Once you have decided to invest in India, the next question that arises naturally is how do I set up operations? There are primarily two ways to get your work done.
- Having your own setup
- Outsource the work to a local company
1. Having your own setup
Many foreign investors prefer to have their own setup in India. This gives them better control over management of the organization. It is also the best guarantee that the company’s processes are being followed. Furthermore, this may in some cases tend to be preferable, especially if the volume of work is large or the work is sensitive in nature. However, there are also disadvantages in this approach. One is regarding flexibility. Often these branches or subsidiaries are bound by the policies of the parent company and this may make it unwieldy when it comes to Indian legal and cultural framework. Secondly, management of a remote setup is always more difficult, especially if the work involved is intermittent and small in volume.
Basically there are four types of direct foreign investment businesses in India:
a. Branch Office
b. 100% Subsidiary
c. Joint Venture Companies
d. Acquiring Existing Indian companies
2. Outsourcing your work to India
The other option is to completely outsource your work to Indian companies. This has its own advantages. For example
For intermittent jobs, it may make better sense to pay only when you have work
Also, if the volume of work were small, it would always be difficult to achieve economy of scale
Outsourcing ensures that while you may not be the best in a certain area, you are giving the work to someone who’s really good at it. That leaves you to focus on what you do best
Many Indian companies do a lot of business with International customers, so they would often be able to bring in expertise and advice from their earlier work
Lastly but definitely not least, you have no legal hurdles to overcome when you outsource
Due to these benefits many Companies prefer to get their work outsourced, leaving you to do the things that directly impact your success. Whatever you decide, you can be assured that our international team would be happy to work with you in making your business succeed.
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