An Introduction to Doing Business in India 2024

DoingBusinessinIndia 2024 ANINTRODUCTIONTO PoisedtoStaytheFastestGrowingG20Economy SpecialFocus VISITUSONFACEBOOK <DezanShira&Associates> <IndiaBriefing> VISITUSONLINKEDIN <DezanShira&Associates> <IndiaBriefing> FOLLOWUSONTWITTER @DezanShira@IndiaBriefing THEDOINGBUSINESSINASIAGUIDESSERIES AvailabletoDownloadNow: DoingBusinessinIndiaPortal •ASEANGuide •ChinaGuide •IndonesiaGuide •HongKongGuide •SingaporeGuide •VietnamGuide •ChinaSuperCityClusters •DubaiGuide OurlatestonlineDoingBusinessinIndiaPortalconsists of100+guides,videos,publications,andtoolsthatarepracticalandeasytonavigate,covering:WhyIndia,RegionstoInvest,SectorInsights,HowtoSetup,Tax,AuditandAccounting,HR,Recruitment,PEO,andPayroll,News,Events,andmore. ThiseditionofDoingBusinessinIndiawasproducedbyateamofprofessionalsat DezanShira&Associates,withNainaBhardwajasTechnicalEditorandMelissaCyrillasLeadEditor.CreativedesignoftheguidewasprovidedbyNguyenHoangLinh. ©2024DezanShira&Associates Disclaimer Thecontentsofthisguideareforgeneralinformationonly.Foradviceonyourspecificbusiness,pleasecontactaqualifiedprofessionaladvisor.Copyright2024,AsiaBriefingLtd.Noreproduction,copying,ortranslationofmaterialswithoutpriorpermissionofthepublisherispermitted. YourPartnerforGrowthinAsia AboutDezanShira&Associates AtDezanShira&Associates,ourmissionistoguideforeigncompaniesthroughAsia’scomplexregulatoryenvironmentandassistthemwithallaspectsofestablishing,maintainingandgrowingtheirbusinessoperationsintheregion.Sinceitsestablishmentin1992,DezanShira&AssociateshasgrownintooneofAsia’smostversatilefull-serviceconsultancieswithoperationalofficesacrossChina,HongKong,India,Singapore,andVietnamaswellasliaisonofficesinItaly,GermanyandtheUnitedStates,andpartnerfirmsacrosstheASEANregionandinBangladesh.Withover30yearsofon-the-groundexperienceandalargeteamofprofessionaladvisers,weareyourreliablepartnerinAsia. Preface CONTACT DezanShira&Associatesindia@dezshira.comwww.dezshira.com Welcometothe2024editionofourIntroductiontoDoingBusinessinIndiaguide. AsIndia’seconomicprowesscapturesglobalattentionandthecountryispoisedtobecometheworld’sthirdlargesteconomyby2030,thisguidewillassistbusinessesseekingtonavigatethisvibrantmarket. India’sGDPgrowthispredictedtoreach6.5percentin2024-25,andhit7percentin2026.Amidanotheryearofglobalturmoilunderpinnedbywarandconflictandunevenpost-pandemicrecovery,India’seconomyhasstoodoutasabrightspot.Anchoredbypoliticalstabilityandacontinuedfocusonbusinessfacilitation,2023sawkeyindustriesgettingaboostthroughPLIschemesandcompetitivestate-wiseindustrialpolicies. TheG20SummitwasalsosuccessfullyhostedinthecountryandpresentedtheIndianmarketasaforward-lookingbasethatcanserveasakeypointinglobalsupplychains.ThesemiconductorindustryandgreensectoraretwoareaswhereIndiahasengagedwithkeyglobalpartnersforsupportintermsofinvestmentsandtechnologytransfer.Astheseevolve,theywillsupportIndia’ssustainabledevelopmenttargetsandmovinguptheindustrialvaluechain. DesignedtointroducethefundamentalsofinvestinginIndia,thispublicationiscompiledbytheexpertsatDezanShira&Associates,aspecialistpracticeprovidingcorporateestablishment,businessadvisory,taxadvisoryandcompliance,accounting,payroll,duediligence,andfinancialreviewservicestomultinationalsinvestinginemergingAsia. DoingBusinessinIndia2024coversthefollowing: •Corporateestablishment •India’sinvestmentclimate •Tax,audit,andaccounting •Humanresourcesandpayroll •Tradepolicy ROHITKAPUR ManagingDirector DezanShira&AssociatesNewDelhiOffice What’sNewinThisGuide? TheIntroductiontoDoingBusinessinIndia2024GuideisdesignedtointroducethefundamentalsofinvestinginIndia.CompiledbytheprofessionalsatDezanShira&AssociatesinNovember2023,thiscomprehensiveguideisidealnotonlyforinternationalfirmslookingtoentertheIndianmarket,butalsoforcompanieswhoalreadyhaveapresencehereandwanttokeepuptodatewiththemostrecentandrelevantpolicychanges. Tobemorespecific,thebelowchangesarenoticeableforyourattention: WhyIndia:Despiteheadwindschallengingtheglobaleconomy,2023hasbeenayearofgrowthforbusinessesinIndia.Thecountryisestimatedtogrowat6.3percentinfinancialyear2023-24(FY2024),withaminimumandmaximumgrowthestimateof6percentand 6.6percent,respectively,accordingtotheIMF.Theprojectionisonthebackofstronger-than-expectedconsumptionduringApril-JunefollowedbycontinuedfactoryactivityexpansionintheJuly-Septemberperiod.Pergovernmentestimates,India’sGDPgrewat7.6percentintheJulytoSeptemberquarterof2023(Q2FY24).Thisiscomparedto6.2percentgrowthinQ2FY23.Inthelastthreeyears,multipleindustrialfacilitationmeasureshavebeenrolledoutliketheproductionlinkedincentive(PLI)schemesbesidesmajorcapexandinfrastructurespendingplans,creatinggreenfieldinvestmentopportunities.Thischapterinthe2024DoingBusinessGuidewillprovideacomprehensivesummaryofallthefactorsthatmakeIndiaanattractiveinvestmentdestinationforforeignstakeholdersandopportunitiesintargetsectorslikeautomotives,manufacturing,informationtechnologyandservices(ITES),e-mobilityandrenewables,etc. SettingUpaBusinessinIndia:Thischapterha