Additional India resources
Understanding the relationship between economics, politics and government can give businesses an edge when entering a new market. This chapter provides general information on political and legal structures, relevant government agencies, key states and the bilateral relationship with Australia.
Country information
Politics and government
India is a parliamentary democracy modelled on the Westminster system. It is divided into 28 states and eight union territories. The president is the head of state while the prime minister is head of the executive branch and the union government. The legislature is bicameral, with The Council of States (Rajya Sabha) as the upper house and The House of the People (Lok Sabha) as the lower house. There can be a maximum of 250 members in The Council of States, with up to 12 members selected by the president and the rest elected from constituencies in the states and union territories.
Under the Constitution, The House of the People, which selects the prime minister, can have up to 550 members, with 530 representatives from the states and 20 from the union territories.
There are two main political parties in India as well as a large number of registered and unrecognised parties at the state and local levels. The Bharatiya Janata Party (BJP) is the party of the current prime minister, Narendra Modi, who has been in power since 2014.
Legal system
India’s legal system has elements of common law, civil law and religious law, with significant influence from English law, although there have been deviations to comport with local conditions and traditions. The judiciary is three-tiered. The Supreme Court sits at the top tier, holding final authority to interpret the constitution. Its decisions are binding, just as in other democracies.
Below the Supreme Court sit the High Courts, which are in each of the 28 states. The High Courts are allowed to interpret the constitution, but their jurisdiction is limited to the states where they preside. The Lower Courts, or Subordinate Courts, are a group of courts that decide cases on both civil and criminal law. They are further sub-divided into regional and district-level courts and magistrates.
India’s Government and Judicial Structure
Key government agencies
Key government agencies and industry associations will need to be consulted throughout the process of setting up a business in India. Some of these agencies can also be useful for providing advice and initiating contacts.
The main agencies and their areas of authority relating to foreign businesses are:
| Government agency | Responsibilities | Website |
|---|---|---|
| Ministry of Corporate Affairs (MCA) | Regulates corporate affairs in India through the Companies Act, ensuring corporate governance and compliance with statutory requirements. | mca.gov.in |
| Reserve Bank of India (RBI) | Central banking institution responsible for regulating the monetary policy of the Indian rupee and ensuring financial stability. | rbi.org.in |
| Central Board of Direct Taxes (CBDT) | Oversees the administration of direct taxes through the Income Tax Department, including the collection of income tax and corporate tax. | incometaxindia.gov.in |
| Securities and Exchange Board of India (SEBI) | Regulates the securities market in India to protect investor interests and promote the development of the securities market. | sebi.gov.in |
| Intellectual Property India (IP India) | Manages the intellectual property rights system, including patents, trademarks, and designs, to promote innovation and creativity. | ipindia.gov.in |
| Directorate General of Foreign Trade (DGFT) | Implements foreign trade policy to promote India’s exports and regulate import policies to ensure balanced trade and economic growth. | dgft.gov.in/CP |
| Ministry of Labour and Employment (MOL&E) | Formulates and implements labour policies to promote employment, improve working conditions, and ensure social security for workers. | labour.gov.in |
| Ministry of Micro, Small and Medium Enterprises (MSME) | Supports the growth and development of MSMEs through policy measures, schemes, and programs aimed at enhancing their competitiveness and market access. | msme.gov.in |
Largest Indian States by Contribution to National GDP, 2022 - 2023
| Maharashtra | |
| Major cities (by population) | Mumbai, Pune, Nagpur |
| GDP contribution | 13% |
| FDI inflow contribution | 40% |
| Total trade contribution | 16.9% |
| Gujarat | |
| Major cities (by population) | Ahmedabad, Surat, Vadodara |
| GDP contribution | 8% |
| FDI inflow contribution | 19% |
| Total trade contribution | 29.9% |
| Tamil Nadu | |
| Major cities (by population) | Chennai, Coimbatore, Madurai |
| GDP contribution | 9% |
| FDI inflow contribution | 5% |
| Total trade contribution | 13.4% |
| Karnataka | |
| Major cities (by population) | Bangalore, Mysore, Hubballi-Dharwad |
| GDP contribution | 8% |
| FDI inflow contribution | 22% |
| Total trade contribution | 7.8% |
| Uttar Pradesh | |
| Major cities (by population) | Kanpur, Lucknow, Ghaziabad |
| GDP contribution | 8% |
| FDI inflow contribution | 1% |
| Total trade contribution | 5.6% |
Free trade and special economic zones
India has 280 special economic zones (SEZs). These employ over 3 million people and generate approximately AUD 249 billion in exports. SEZs in India are duty-free sites considered as outside the customs jurisdictions of India. No import license is required in India’s SEZs and manufacturing and service activities are permitted.
Goods for an SEZ company can be sourced duty free from within India and from overseas. Companies in an SEZ are income tax exempt for the first five years of operation, pay 50 per cent tax for the next five years, and pay 50 per cent of the ‘ploughed back export profit’ for the five years after that. They are also exempt from a range of other taxes, including Central Sales Tax and Service Tax. Units within an SEZ must demonstrate Positive Net Foreign Exchange over a cumulative period of five years from the start of production.
Despite the large number of SEZs in India, each zone is unique. Australian businesses are advised to conduct a market entry study to compare sites, resources, tax incentives and costs before making a site visit to explore establishing an operation within an SEZ. Information about India’s SEZs is available from India’s Ministry of Commerce & Industry SEZ website.
The India-Australia bilateral relationship
Political, economic and security ties between Australia and India are strong and growing. In June 2020, the relationship was upgraded to a Comprehensive Strategic Partnership (CSP), which focused on extending cooperation to education, tourism, agriculture and science and technology. Australia is only one of three countries with which India holds annual prime ministerial-level meetings. Additionally, there are 916,000 Indian-born people living in Australia, making it the second largest Indian migrant community after the UK.
The trade and investment relationship is now centred around the Australia - India Economic Cooperation and Trade Agreement (ECTA), which entered into force in December 2022. This is supported by the AustraliaIndia Business Exchange (AIBX), a multi-year program managed by Austrade.
Further information on the Australia India bilateral relationship is available from DFAT.
Ten priority Indian states identified in Australia’s India Economic Strategy to 2035
Please refer to Pages 50 and 51 of the India Doing Business Guide to access the ten priority Indian states.
Useful contacts and support resources
Government organisations
Australian Department of Foreign Affairs and Trade (DFAT)
DFAT manages Australia’s international network, including in India. Australia has a High Commission in New Delhi, and Consulates-General in Mumbai, Chennai, Kolkata and Bengaluru.
Australian Trade and Investment Commission (Austrade)
Austrade is the Australian Government agency responsible for facilitating international trade and investment. Austrade can provide advice on the market, potential in-market partners and export marketing services. Austrade has offices in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi.
EFA provides information, support and export finance solutions to Australian businesses looking to expand overseas.
State government agencies
Many state government agencies have representatives or offices in India, including New South Wales, Queensland, Victoria and Western Australia.
Business and industry associations
Australia India Business Council
The Australia India Business Council promotes bilateral trade and investment opportunities between Australia and India. In addition to networking and cultural awareness programs, it offers a B2B supply chain consultancy service for Australian businesses looking to enter India.
Australian India Chamber of Commerce
The Australia India Chamber of Commerce (AICC) is an Australian-based organisation dedicated to promoting business relationships between Australia and India. It aims to help Australian businesses navigate the Indian market, and Indian businesses navigate the Australian market.
The Export Council of Australia is the peak industry body for the Australian export community.
Confederation of Indian Industry (CII)
CII is a non-government, not-for-profit, industry-led and industry-managed organization, with around 9,000 members. CII has a representative office in Australia. CII offers location advisory, market research and analysis, and on-the-ground handholding and facilitation services to foreign companies through its Market Facilitation Services (MFS) and India Advisory Services (IAS).
Indo-Australian Chamber of Commerce: Austcham India
The Australia India Chamber of Commerce represents and promotes Australian businesses operating in India. Aust Cham coordinates a regular program of business seminars, networking and social functions for the business community in India. The Chamber is headquartered in Chennai and has chapters in Northern India, Western India, Southern India, Bengaluru and East India.
Programs and support
Information, tools and support to grow your business globally through a range of digital for every stage of the export journey.
Export Market Development Grants (EMDG)
Austrade seeks to help small to medium Australian enterprises grow their exports in international markets through their EMDG grant program.
The Industry Growth Program supports innovative SMEs undertaking commercialisation or growth projects in the National Reconstruction Fund priority areas. State or territory government trade and investment agencies may also run programs and provide support to businesses looking to expand into international markets. Please consult your relevant state or territory agency for more information.
This guide prepared by the Indo-Australian Chamber of Commerce provides in-depth information on the requirements of setting up a business in India, foreign investment policy, regulatory environment, structuring market entry, tax considerations and understanding the economic opportunities, investments and business activities in India.
The Landing Pad helps tech scaleups to expand in India through residencies, coaching, in-market connections and introductions to partners and venture capital.
References
A select list of sources used in the development of this publication are included below.
Amazon Pay
Australian Department of Education
Australian Department of Foreign Affairs and Trade
Australian Trade and Investment Commission (Austrade)
Bank of International Settlements
CBIC
Clear Tax
Dezan Shira and Associates
Economist Intelligence Unit
The Economist
Euromonitor
EY
Financial Times
IMF
International Federation of Accountants
International Labor Organization
King & Wood Mallesons
KPMG
Lagum Advisors
McKinsey & Company
PwC
QS University Rankings
Reuters
Statista
SumHR
Tech in Asia
The Heritage Foundation
Transparency International
S&P Global
UNICEF
US Chamber of Commerce
US Department of State
US International Trade Administration
India Government (various sources)
We Are Social
World Bank
A note on currency
All money amounts are in Australian dollars unless otherwise indicated.
Exchange rate used is the historical rate for the previous twelve months.
AUD 1 = INR 55.1294
AUD 1 = USD 0.6482
INR 1 = AUD 0.0181
USD 1 = AUD 1.542
Acknowledgements
Asialink Business gratefully acknowledges the assistance of the following organisations in the production of this guide:
ANZ Bank
Austrade
DFAT
Confederation of Indian Industry (CII)
Indo-Australian Chamber of Commerce
A number of businesspeople also provided anonymous review. We extend to them our sincere appreciation.
Asialink Business is supported by the Australian Government’s Department of Industry, Science and Resources.
Disclaimer
This publication contains country and industry general information and does not address the circumstances of any particular individual or entity. While all efforts have been made by Asialink Business to ensure that the data and information provided herein are accurate, the accuracy of the information in the future cannot be guaranteed.
Users of this document should undertake their own independent analysis and obtain appropriate professional advice, if required, before acting upon such information in any given situation. Asialink Business accepts no liability for any loss which may arise from the use of the information contained in this publication.
Reproduction of any part of this publication without prior written approval of Asialink Business is strictly prohibited. The information in this document is accurate as of October 2025.