Business practicalities in India

Land and property rights

Foreign nationals of non-Indian origin resident outside India are not permitted to acquire any immovable property in India. Foreign companies, however, are permitted to buy property in India to carry out specific business activities with proper government approval. Government approval is not required for foreign companies to lease property for periods of less than five years.

Cybersecurity

India’s Information Technology Act is the country’s primary legislation that deals with cybersecurity, data protection and cybercrime. It aims to safeguard electronic data, information and records and identifies activities such as denial-of-service attacks, hacking, identity fraud and electronic theft as punishable offenses.

The Indian government has also developed a draft National Cybersecurity Reference Framework that sets the standard for cybersecurity in India. It has not yet been officially released and provides recommended guidelines, not mandatory regulations, on cybersecurity. It is expected to clarify the cybersecurity roles and responsibilities that organisations should follow under existing rules, policies and guidelines.

Sectoral regulators like the Reserve Bank of India (RBI), the Insurance Regulatory and Development Authority (IRDAI), and the Securities and Exchange Board of India (SEBI), also mandate cyber security standards to their respective regulated entities. The Indian criminal code provides provisions for punishment in case of offences relating to cybercrime.

Intellectual property (IP)

India is working to support innovation, technology, and enterprise by strengthening its intellectual property (IP) framework. India fully complies with the provisions under the Agreement on Trade Related Intellectual Property Rights (TRIPS) under the framework of the World Trade Organization (WTO). India is also a signatory to the Paris Convention, the Berne Convention, the Madrid Protocol, and the Patent Cooperation Treaty, bringing its IP framework in line with World Intellectual Property Organization standards, which cover patents, industrial design and copyright, among other IP issues.

The Office of the Controller General of Patents, Designs and Trademarks (CGPDTM) is responsible for grant of patents and registration of designs, trademarks, copyrights, geographical indications and integrated circuit lay-out designs. The registration of new plant varieties is handled by the Protection of Plant Varieties and Farmers' Rights Authority. India has also established several Intellectual Property Rights (IPR) cells and technology transfer offices to support IP management and commercialisation.

Intellectual property portfolios are managed by the Department for Promotion of Industry and Internal Trade (DPIIT). Within DPIIT, the Cell for IPR Promotion and Management is responsible for executing India’s National IPR Policy. This unit leads governmental initiatives to simplify IP procedures, raise awareness, encourage commercialization, and strengthen enforcement. However, the enforcement of IP laws by Indian courts and police remains inadequate. The system suffers from insufficient knowledge of investigative methods and the lack of a centralised agency dedicated to IP enforcement.

There are a range of intellectual property types in India, covering areas such as trademarks, patents, copyrights, designs and geographical indications. The following rules apply:

Violation of IP and enforcement options

Despite a strong IP protection framework, violations can occur. Businesses seeking to enforce their IP rights in India have several options. Enforcement actions can include negotiation, expert determination, arbitration or litigation. Most IP disputes in India are resolved through litigation, though the process can be lengthy and uncertain. The Intellectual Property Appellate Board (IPAB) handles appeals related to IP disputes over trademarks and geographical indications. Businesses can also consult IP Australia for advice.

Import duties and tariffs

India’s customs duties are regulated by the Central Board of Indirect Taxes and Customs (CBIC). The primary components of import duties include Basic Customs Duty (BCD), Integrated Goods and Services Tax (IGST), and Social Welfare Surcharge (SWS). Duty rates vary based on the product category and its classification under the Harmonized System (HS) codes.

The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) helps to promote trade between the two countries. Currently, 85 per cent of Australian imports can enter India tariff-free, rising to 90 per cent by 2026. Additionally, high tariffs on some products, such as agricultural goods, are set to be reduced.

The Central Board of Indirect Taxes and Customs is responsible for levying tariffs on imported goods. For up-to-date information visit the Central Board of Indirect Taxes & Customs. To find the tariff rate for specific goods from Australia, visit the Department of Foreign Affairs and Trade’s FTA Portal.

Calculations and payments

India follows the WTO Valuation Agreement of imported goods. The Basic Customs Duty (BCD) is determined by multiplying the imported good’s dutiable value by the corresponding import duty rate. The dutiable value of imported goods is typically based on the cost, insurance and freight (CIF) level under the International Commercial Terms (incoterms).

Other taxes and charges

India’s Integrated Goods and Services Tax (IGST) is a combined state and federal tax applied to most goods and services. The rate depends on the type of good or service. As of September 2025, India simplified GST slabs to:

• 5% (merit rate for essentials)
• 18% (standard rate for most goods/services)
• 40% (demerit rate for luxury and sin goods)

For more information, refer to the CBIC’s GST rates.

Other taxes include the Social Welfare Surcharge (SWS), levied at 10 per cent of the value of goods. Anti-dumping duty is charged if the goods are being imported below fair market value, causing injury to domestic industry. Any anti-dumping duty is levied following an investigation. The government may also choose to impose a safeguard duty if it feels that an increase in imports might damage domestic industry. Additionally, some luxury goods are subject to a GST rate of 40 per cent luxury/sin tax.

Exemptions

India has a Duty Exemption Plan in place for imports required for the production of exported goods. Advanced approval from customs is required to obtain the exemption. While exemptions extend to many imported inputs, in recent years the focus has been on inputs for manufacturing, particularly electronics.

Export duties

India typically only imposes export duties on specific raw materials and primary commodities to ensure their availability in the domestic market. Most manufactured goods and services are exempt, though exporters must follow certain procedures. These can be found on India’s Directorate General of Foreign Trade (DGFT) website.

Import and export regulations

The Central Board of Indirect Taxes and Customs (CBIC) administers tariff collection. The Directorate General of Foreign Trade (DGFT) formulates and implements foreign trade policy, including negotiating trade agreements and rules.

Certain goods in India are subject to import restrictions or complete prohibition. A list of controlled goods and services is available on the DGFT website. 

India’s import and export regulations mandate comprehensive documentation, including invoices, packing lists, bills of lading, and certificates of origin. The process is facilitated through the Indian Customs EDI System (ICES), an online platform which provides a single point of entry – or Single Window – for all documentation.

All businesses or individuals wishing to import goods to, or export from, India must first obtain an electronic Import Export Code (IEC) from the DGFT. Importers must also have an Indian business number (BN), permanent account number (PAN), any applicable import licences and be sure to file import declarations and pay all taxes and fees. Exporters are required to apply for an export licence, if applicable, and register with the Indian Chamber of Commerce (ICC) to obtain a Non-Preferential Certificate of Origin which certifies that the goods originated in India. Details regarding all required steps can be found on the DGFT website.

The Central Board of Direct Taxes (CBDT) oversees the corporate and personal tax regime. The Central Board of Indirect Taxes and Customs (CBIC) administers other taxes such as the Goods and Services Tax (GST) and customs duties. This section provides an overview of the taxes Australian businesses can expect to face when operating in India. Not all applicable taxes are covered in this guide, and the information provided is of a general nature. Businesses should seek professional tax advice for understanding the taxes specific to their activities.

Table 1: Overview of India's taxes for businesses

Corporate Income Tax (CIT)

Non-resident companies in India are taxed only on the portion of income that is received in India, or that accrues or arises, or is deemed to accrue or arise, in India. Resident companies are taxed on worldwide income.

If an Australian business is not deemed to be a tax resident, it is subject to rules set out in the IndiaAustralia Double Taxation Avoidance Agreement (DTAA). Under the DTAA, most non-resident Australian companies will be taxed only on certain portions of their income in India and may pay withholding taxes at a reduced rate.

India offers a range of tax benefits for companies, including tax exemptions for eligible startups and exemptions on export profits for companies located in Special Economic Zones (SEZs).

Personal income tax 

Individuals who meet one or more of the following criteria are classified as tax residents under Indian law: 

• A resident Indian citizen; or 
• A foreign national who has stayed or worked in India for at least 182 days within the past financial calendar year or 60 days in the previous year and 365 days over the past four years.

For individuals not classified as tax residents, income tax rates are governed under the India-Australia DTAA. Individuals who qualify as tax residents in India are subject to the following progressive tax rates, plus an additional 0-25 per cent surcharge and 4 per cent health and education cess:

Indirect taxes

Goods and services tax (GST): India charges Central GST (CGST) as well as State GST (SGST) or Union Territory GST (UTGST). Together, these constitute Integrated GST (IGST). The rate ranges, after the Sept 2025 GST tax reform, from 0, 5, 18, to the top rate of 40% for some luxury goods.

Basic customs duty (BCD): Basic customs duty must be paid on most imported goods. Rates range from 1 to 100 per cent, depending on the category of the import and its origin. An additional social welfare surcharge is charged on all imports, generally at a rate of 10 per cent of the BCD. Integrated Goods and Services Tax is also levied at par with domestic transactions considering the reduced rates and admissible exemptions.

Auditing and accountancy play a vital role in enhancing transparency and accountability in a business, especially one engaged in a foreign market. It increases business performance by identifying risks and highlighting areas for improvement.

Accounting standards

Local and foreign businesses are required to comply with the Indian Accounting Standards (Ind AS). Although India has not formally adopted International Financial Reporting Standards (IFRS), much of Ind AS aligns with IFRS.

Although the Australian Accounting Standards (AAS) also converge with IFRS, Australian businesses with Indian operations should review the differences between jurisdictions to ensure their records are compliant with both countries’ accounting authorities.

Accounting standards in India are determined by the Institute of Chartered Accountants of India (ICAI) and overseen by the Ministry of Corporate Affairs (MCA).

Audits

India’s Companies Act 2013 requires companies to comply with several different audit regulations. This section provides an overview of the most common types of audit. Businesses should seek professional advice to ensure compliance with local laws.

Statutory audit: All companies are required to be audited at least once per year by a qualified chartered accountant in accordance with the Standards on Auditing (SA) issued by the ICAI. Small companies may be exempt from auditing requirements if they meet two of the following criteria: 

• Annual revenue less than INR 50 million (AUD 905,000) 
• Total assets that do not exceed INR 20 million (AUD 362,000) at financial year end (FYE)
• No more than 50 employees at FYE

Internal audit: Mandatory for all public companies as well as private companies with paid-up capital of INR 500 million (AUD 9 million) or turnover of INR 2 billion (AUD 36 million) to assess internal controls and risk management.

Secretarial audit: Required for all public companies as well as private companies that have paid-up capital of INR 500 million (AUD 9 million) or more, or turnover of INR 250 billion or more (AUD 45 million).

Cost audit: Companies operating in regulated sectors must perform cost audits if their annual turnover exceeds INR 500 million (AUD 9 million). In unregulated sectors, cost audits are required when turnover exceeds INR 1 billion (AUD 18 million). 

Tax audit: All companies, LLPs and professionals are required to conduct a tax audit once turnover crosses a particular threshold:

• INR 100 million (AUD 1.8 million) for individual business operators
• INR 5 million (AUD 90,700) for individual professional service providers
• Medium, small and micro enterprises (MSMEs) are exempt from tax audits if their turnover is less than INR 50 million (AUD 907,000)

GST audit: India’s GST system requires a selfassessment of tax liability. GST audits are required for any company whose turnover exceeds INR 20 million (AUD 362,800).

Social Audit: Under the Corporate Social Responsibility (CSR) provisions of the Companies Act, 2013, companies that engage in CSR activities must monitor and report on them. This audit is expected to assess the company’s social impact and applies to companies that meet any of the following criteria during the immediately preceding financial year:

• Net worth of INR 5 billion (AUD 90 million) or more, or
• Turnover of INR 10 billion (AUD 181 million) or more, or
• Net profit of INR 50 million (AUD 907,000) or more.

Companies operating in specific or regulated industries may also require additional audits specified by the concerned regulatory bodies. For example, industries specified in the Environmental Protection Act, 1986 may require Environmental Audits. Similarly, the Telecom Regulatory Authority of India (TRAI) prescribes specific audit requirements for telecommunication companies operating in India. Firms Operating in Financial Markets or Banking will be subject to audit requirements specified by the Securities Exchange Board of India (SEBI) or the Reserve Bank of India (RBI) respectively. Businesses should obtain professional advice where these regulations apply.

Books and records

Businesses are required to maintain accurate and detailed financial records to ensure compliance with statutory requirements. These records should include details of income, expenses, assets, and liabilities, and must be preserved for at least eight years. Financial statements may be presented in any currency, provided all transactions are translated into the chosen currency.

Transactions should be documented according to the Indian Accounting Standards (Ind AS). Companies must also adhere to specific formats prescribed by the Ministry of Corporate Affairs (MCA) for financial statements, which are audited annually by a qualified chartered accountant to verify accuracy and compliance.

Annual General Meetings (AGMs)

Annual General Meetings are a statutory requirement for Private Limited and Limited companies in India. Every company, whether public or private, is required to hold an AGM every year. A company must hold its AGM within six months from the end of the financial year, which is the twelve months period from 1 April to 31 March in India. A company’s first AGM must be held within 18 months from its date of incorporation.

Quality control

Audits are overseen by the National Financial Reporting Authority (NFRA). NFRA offers guidelines and frameworks to help businesses conduct quality audits and ensure compliance with statutory requirements.

NFRA is responsible for overseeing the quality of company audits as well as of services provided by professional accountants and auditors in India. NFRA is a member of the International Forum of Independent Audit Regulators.

Doing business in India will often require employing local and foreign workers. Understanding India’s labour market regulations, recruitment methods and country-specific management styles is crucial to building and supporting an effective team.

Labour market

Skill level: Owing to the size of its population and the strength of its university system, India has a large pool of educated, skilled labour. However, the share of the labour force with an advanced education is still only 14 per cent and 88 per cent remain in informal employment, defined as work not covered or insufficiently covered by formal agreement. Among the educated, or those seeking advanced education, India’s labour market faces issues with out-migration.

Employment contracts: Employment laws in India are governed by central and state-based legislation. These laws cover a wide range of employment concerns, including workers’ wages and rights and industrial disputes. The Indian Contract Act regulates all contract provisions. There are four main types of employment contracts in India: permanent, part-time, fixed-term and a freelance contract.

The most common contracts are full-time or parttime. Fixed-term contracts are for the duration of a specific project or seasonal work, and provide clarity on employment duration and expectations. Freelance and consultancy agreements are also becoming increasingly popular as they allow a professional to offer their services to multiple clients without being tied to a single employer.

Minimum wage: India has a highly complex minimum wage system that is determined at state level and even at the zone level. It is also determined by the skilllevel of the employee and the type of work. India is currently in consultations with the International Labour Organization to establish a national ‘living wage’ policy, with a targeted date for implementation in 2025, but has yet to eventuate.

For the current breakdown of minimum wages by state, please see the table below. Due to the complexity of the system, this represents the maximum a company may pay for labour.

Minimum wages for states across India (per month) in AUD.

* Many Indian states have stipulated minimum wages based on skill levels and zones of work. Businesses are recommended to consult the relevant state laws for exact minimum wage guides.

Human resources and employment law: There are at least three categories of labour law and enforcement in India. At the Central level, there is the Employees’ State Insurance Act of 1948 and the Employees’ Provident Fund and Miscellaneous Provisions Act of 1952. Passed at the Central level but enforced at both the federal and state level are laws such as the Child Labour Act of 1986 and the Industrial Disputes Act of 1947. Finally, there are laws that were enacted at the federal level but are only enforced by the states, such as the Weekly Holidays Act and the Workmen’s Compensation Act. Most of these laws have been passed for decades but have since been updated and amended.

Working hours: Adults 18 years or older cannot work more than 48 hours per week and not more than 9 hours per day. Normally, full-time employees work between 40 to 48 hours per week, as it is common for Indian companies to employ 5.5-day or 6-day weeks in many sectors. The typical working hours are 9am to 6pm, although more companies, particularly multinationals, are adopting flexible or hybrid schedules and allowing their employees to work remotely.

Holidays: Employee leave in India is governed by a mix of Central, state and industry-specific regulations and laws. Employees are entitled to a variety of types of leave, shown in the table below. Some companies do offer other types of additional leave, including marriage leave, maternity and paternity leave and bereavement leave.

Overtime: Overtime regulations and pay can vary significantly. The laws governing overtime are Section 51 and Section 59 of the Factories Act 1948. It states that employees should not work beyond 48 hours in a week or 9 hours in a day. If they exceed these limits, they are entitled to receive overtime pay, which is typically double their regular wages. It is customary for employers in companies with more than 20 employees to provide an extra month’s salary annually, although this is not mandatory.

The hourly basic rate of pay depends on the payclassification of the employee and is calculated using the following formula:

Social, health and unemployment insurance contributions: India has a wide-ranging social security system. It comprises social insurance and social assistance schemes at both federal and state levels. The government controlled social security system applies to only a small portion of the population. It includes an insurance payment of premiums into government funds, as well as lump sum employer contributions.

Contributions vary depending on the form of social insurance and the size of the company. Health insurance and medical benefits are provided for those working in factories and in establishments with 10 or more people, although smaller companies in certain sectors also receive coverage. There are five types of social insurance:

• Employee Provident Fund (EPF)
• Health insurance and medical benefits
• Disability benefit
• Maternity benefit
• Gratuity

Contribution rates, allowances and compensation are as follows:

Ending employment: Employment in India can only be terminated for reasonable cause or misconduct. However, there is no uniform set of laws and procedures for terminating employment in India. For employees under contract, it is possible to write the terms and conditions of termination into the contract. However, employers should be aware that the country’s Central and state labour laws supersede contracts. When there is no contract, or the contract does not specify the terms and conditions for termination, the relevant labour laws in the state where the employee is located apply. Please refer to the Industrial Disputes Act for further information.

Under the Payment of Gratuity Act 1972, employees who retire, resign, die, or are disabled due to accident or disease are entitled to a severance payment after five years of continuous employment. The amount of severance pay is equal to 15 days’ wages for each year of service. For workers in factories, mines, plantations and other industrial establishments, those who are made redundant are also entitled to 15 days’ wages for each year of service, up to a maximum of INR 10 lakh (AUD 18,060) under the Industrial Disputes Act.

For employees who don’t fall under these laws, the amount is determined by legal provision relevant to the industry and location, or the employment contract.

Recruiting staff

Online advertising: Advertising through job portals such as LinkedIn is a popular tool for recruiting talent in India, particularly for professional, technical, sales and managerial roles. Major job portals include:

• Naukri - One of the older job portals in India, it has a substantial database of users and may be the most popular job site in India. naukri.com
• Indeed - A portal that aggregates job postings from several different sites. in.indeed.com
• LinkedIn - Has over 100 million users in India. in.linkedin.com
• Glassdoor – A popular job search site that also includes employer reviews. glassdoor.co.in
• Foundit - Offers premium services to job seekers that include resume assistance and personalised job recommendations. foundit.in
• National Career Service Portal: Government portal for job search and matching, career counselling, vocational guidance, information on skill development courses. ncs.gov.in

Executive search: For a more tailored search, particularly for senior executives or talent with high levels of technical skills, a recruitment or executive search firm may be more appropriate. International firms such as Michael Page, Korn Ferry, Egon Zehnder and Heidrick & Struggles all have offices in India.

Work permits: Foreign workers may be recruited into positions in India where local hires are not able to meet the requirements. However, all foreigners must have a valid work permit. These are issued every six months, for up to five years.

Foreigners living on an extended visa must also apply for a resident Permit with a Foreigners Regional Registration Officer (FRRO) or a Foreigners Registration Officer (FRO), in New Delhi, Ahmedabad, Amritsar, Bangalore, Calicut, Chennai, Cochin, Hyderabad, Kolkata, Lucknow, Mumbai, and Trivandrum. In all other districts where a Registration Officer is not appointed, the process will be under the jurisdiction of District Superintendents of Police.

Foreign companies establishing a commercial presence in India will need a local bank account to conduct business. Foreign companies may open accounts denominated in Rupee, but for foreign currencies they must have an Exchange Earners Foreign Currency (EEFC) account, which is also available to individuals. Only banks authorised to deal in foreign currency can open these accounts for customers.

While all types of approved institutions are permitted to take deposits, the extent of other services offered will vary. There are five types of bank accounts available:

• Current account. For making and receiving payments.
• Salary account. Interest-earning account for people receiving a salary.
• Fixed deposit account. Interest-earning account that requires the depositor to maintain the account balance for a fixed period of time.
• Recurring deposit account. Requires the depositor to make regular deposits into the account in order to earn interest.
• Non-resident Indian (NRI) account. The above accounts are available to Indian citizens not resident in India, as well as foreign currency holdings.

Australian banks in India

ANZ operates as ANZ India, providing financial services to corporate and institutional clients. Services include transactional banking, asset and trade finance, debt capital markets and structured finance.

Foreign exchange controls

The INR is a partially convertible currency. It can be used for current account transactions, i.e. trade settlement, without restriction, but India’s capital account is not yet fully open. The IMF changed its classification of the INR from a floating currency to a ‘stabilised arrangement’ due to interventions by the Reserve Bank of India in the currency markets and the band within which the INR is being traded.

Foreign exchange transactions are governed by the Foreign Exchange Management Act (FEMA), a regulation designed to liberalise India’s previously tight control on currency flows. FEMA is implemented by the Reserve Bank of India, which is also responsible for approving or restricting certain types of transactions, mostly related to gambling or lottery winnings.

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