Best Practices to Doing Business in India
3E Accounting offers an insightful read on doing business in India, one of the world’s most vibrant marketplaces.
India is an economic powerhouse that has a lot to offer. As of 2019, it ranked 63rd on the World Bank’s Doing Business Index. While the second largest in the world, India’s population is also mostly young and very technologically savvy. A burgeoning economy, robust business landscape, and a vast consumer market make doing business in India a lucrative venture.
India’s capital market is backed by a strong, mature financial and banking sector. There is also stable governance and investor-friendly policies being aggressively pushed to attract more foreign direct investment (FDI).
However, India is a land that is large and complex and can be intimidating for the novice businessman. Regulatory inconveniences can pose significant roadblocks to doing business here. India’s market scene and investment climate tend to vary according to individual state and central government regulations. Hence, being cognizant of local laws, culture, and government requirements are essential to succeed in any venture.
Most issues are regulatory and bureaucratic in nature. Compliance regulations and paperwork can be tedious and repetitive. It can be notoriously difficult to enforce a contract as the legal system still needs refinement. Similar arguments crop up with regards to taxation, company incorporation, and property registration. Licensing is another hurdle that may appear impossible. Most business activities require both State and Central government approval. This sometimes results in a glut of licenses and confusion on compliance issues.
The Importance of Doing Business Right
To get a good grasp of the business arena, it is necessary to have a working guideline that can act as a framework for success. Consider the following factors:
- Cultural Issues: customs and etiquette are myriad in India and permeates the business world. Developing culturally correct business relationships is a necessity for successful outcomes, especially when it comes to negotiations.
- Business Start-up: this can be time consuming and expensive. Numerous steps need to be attended to, from incorporation to construction permits, to securing credit as well as getting your business activity adequately licensed.
- Compliance: entry and exit strategies are essential for smooth business operations. Similarly, due diligence should be done on rules and regulations, some of which can be tedious and opaque.
- FDI: this is a fluid landscape that is continuously undergoing change. FDI is allowed in most industries, but the negative list is revised regularly.
- Taxation: different taxation rules apply for a resident and non-resident taxpayers. India has also entered into Double Taxation Avoidance Agreements (DTAA) with many countries to avoid double taxation issues.
Hence, doing business in India may be very lucrative, but it takes know-how and practice to get it done seamlessly. The business landscape is culturally complex, while rules and regulations are a minefield of bureaucracy. Engaging business consultants with an on-the-ground experience like 3E Accounting is your best course of action. 3E Accounting offers practical, customizable, and country-centric business solutions for the discerning entrepreneur.
Contact 3E Accounting for the business edge you need to build your corporate empire.