How to enter the Indian market

India was Australia’s fifth largest export market in 2024, with Australian exports to India valued at AUD 34.2 billion, and two-way trade in goods and services cumulatively valued at AUD 50 billion. Coal and education dominate Australia’s exports, but other sectors offer promising opportunities, including food and agribusiness, aviation and aerospace, professional and financial services, technology and logistics.

Market entry models for exporting goods and services

Choosing an appropriate market entry model is essential for businesses looking to export to India. Any choice should be informed by factors such as the overarching business strategy, target sector, and business size and maturity. Market entry models frequently evolve over time.

A. Agents and distributors

Many Australian firms doing business internationally rely on agents or distributors. The roles of agents and distributors differ, and they can vary across industry. It is therefore critical that roles and responsibilities are clearly defined early in any agreement.

Agents: Agents act as representatives of suppliers and do not take ownership of the products they sell. They are usually paid on a commission basis, which provides an incentive for them to drive sales. Being based in India, they will often represent several complementary products or services. They can be retained exclusively as the sole agent for a company’s goods or services or as one of several for the exporter.

Distributors: Unlike agents, distributors buy the goods from exporters and then resell them to local retailers or direct consumers. In some cases, a distributor may sell to other wholesalers who then on-sell to retailers or consumers. Distributors may carry complementary and competing lines and usually offer after-sales service. They earn money by adding margins to product prices. Distributor margins are generally higher than agent fees because distributors have costs associated with carrying inventory, marketing and extending credit for customers.

Choosing an agent or distributor: Whether using an agent or distributor, building a close working relationship is essential. Due diligence when selecting an agent or distributor is important. Companies should ask for trade references and seek a credit check through a professional agency. It is best to meet any potential agents or distributors in India. This gives them an opportunity to demonstrate knowledge of the market and to build a business relationship.

B. Direct exporting

In direct exporting, businesses sell directly to an Indian customer from Australia. Exporting directly to India requires a significant level of involvement in the export process, including market research, marketing, distribution, sales, product registration and approval, import-export licencing and receivables.

Any international business aiming to export to India must adhere to requirements set by the Foreign Trade Policy of India 2023. Some of these requirements can be onerous, including multiple documents that are required to export to the country. The Central Board for Indirect Taxes and Customs (CBIC) has introduced several initiatives to streamline import and export processes. However, the process remains cumbersome at present.

Exporters can utilise the Indian Customs Compliance Information Portal to access comprehensive information on customs procedures and regulatory compliance for nearly 12,000 Customs Tariff Items, free of charge.

Direct exporting has some advantages, including:

• Greater control of commercial processes, including sales 
• Better margins, as it avoids intermediaries
• More direct customer relationships. 

While there are advantages, direct exporting may ultimately involve higher establishment costs in India, as employing dedicated in-house staff and other resources may be necessary to manage the complexities of exporting and sales. Businesses that use this model may need to consider ways to offset these costs, including employing an agent or distributor to handle local product registrations, while still maintaining control over other aspects such as marketing and supply chain management.

For goods exporters, approaching retailers directly in the large consumer markets of Mumbai, New Delhi and Bangalore may be a more cost-effective option. A direct approach should be supported by letters, brochures, catalogues and other product and business information.

This approach will require businesses to engage with customers regularly to build awareness and understanding of the products they are selling on your behalf. In return, their understanding of the Indian market can be applied to product development, pricing and marketing. Selling directly to local retailers can generally cut commissions, reduce expensive travel and create an effective conduit to market.

C. Online sales

India has over 806 million internet users and 491 million social media users. It boasts relatively high mobile phone penetration rates, with 97.4 per cent of households possessing mobile smartphones. This has spurred growth of e-commerce and Q-Commerce which is being supported by a range of government initiatives to close the urban-rural internet access gap and increase access to affordable data.

India’s e-commerce market is among the top ten largest globally with YouTube, Instagram and Facebook the strongest advertising platforms. The e-commerce market is also one of the world’s fastest growing: the segment is expected to be worth approximately AUD 542 billion by 2030.

Q-Commerce (Quick Commerce) is the ultra-fast delivery segment of e-commerce, focused on getting everyday items—like groceries, snacks, OTC medicines, household essentials, and fresh produce—to customers within 10– 30 minutes. Consumers buy fewer items but more often. Platforms like Swiggy, Blinkit and Big Basket have built dense micro-warehouse networks across major cities, matching Indian consumer preferences for convenience, low delivery fees, and quick turnaround. The model succeeds especially in urban India where population density makes micro-fulfilment efficient.

Demand from India’s growing middle-class population presently drives growth, but sales are expected to expand as access to technology in regional areas improves through the Digital India initiative. E-commerce platforms and mobile applications have enhanced the ease of online shopping for customers from Indian Tier II and III cities, which are also seeing growing disposable incomes. Their shopping preference is also shifting from unbranded to branded quality products, due to increased global awareness. The launch of 5G services in 2022 has also helped grow the use of mobile phones for online purchases. 

India’s vast consumer base and the significant growth expectations for the nation’s e-commerce market presents a once-in-a-decade opportunity for Australian companies.

The Australian government is actively working to secure new online markets for business under the Comprehensive Strategic Partnership with India. In 2020, Austrade supported the successful launch of an Australian store on Amazon India.

Accessing digital consumers: Nearly 60 per cent of Indian consumers regularly purchase goods and services online, but there is room for significant growth as smartphone ownership grows. Effective digital marketing strategies to reach India’s growing consumer base are vital, especially to build trust and brand loyalty with first-time customers.

Top product categories for online sales in India include food, fashion and electronics (Figure 2). Ed-tech and food-tech are emerging categories.

With close to half a billion social media users in 2023, social commerce is also becoming another important sales channel to consider, with Facebook and Instagram emerging as important online sales channels.

While digital payments are growing, most online purchases are still paid in cash. Almost two in three (65 per cent) Indian consumers used cash on delivery for payments for their last online transaction. This proportion will reduce as digital payments continue to expand, but businesses must be prepared to receive cash payments for online purchases.

Search engines: Google is by far the dominant search engine, followed by Bing, Yahoo and DuckDuckGo. Almost one-third of Indian consumers use search engines for brand discovery.

Figure 2: E-commerce spending on consumer goods (2025), AUD billion

Online sellers and marketplaces: Amazon and local player Flipkart are the dominant online marketplace platforms. Myntra and Snapdeal are smaller platforms and there are also a range of specialist category-focused platforms, such as Nykaa for cosmetics. The Ministry of Commerce and Industry regulates online sales in India. Foreign businesses can sell on all these platforms, but they are required to establish an Indian entity and register for goods and services tax, or partner with an Indian distributor.

Social media: India had 491 million social media users in 2024. WhatsApp, Instagram and Facebook are the most popular social media platforms. The reach of social media platforms has grown significantly and they are having a major impact on growth in the digital economy. Almost 80 per cent of consumers now use social media platforms to find inspiration for products and services to buy. WhatsApp is particularly popular in India, both for personal and business use. JioMart, an e-commerce platform owned by Reliance Industries, one of India’s biggest conglomerates, has a partnership with WhatsApp, through which it offers an end-to-end shopping experience, allowing Indians to browse catalogues, place orders and complete purchases.

Government customers: Those wishing to sell to the public sector can do so via the Government e-Marketplace (GEM), an online platform managed by the Directorate General of Supplies and Disposal. The platform has significantly reduced the need for face-to-face interactions in vendor registration, order processing and payment handling. Annually, the central and state governments in India purchase goods and services valued at approximately AUD 108.3 billion (INR 5.9 trillion) via GEM. The portal currently has over 2.28 million registered sellers in over 11,000 categories.

Investment environment

India’s large population and improving business environment make it an attractive destination for foreign investors. In FY 2024 -25 , India received foreign direct investment (FDI) inflows amounting to AUD 125 billion (INR 6.89 trillion) and total FDI inward stock stood at AUD 830 billion (INR 45.6 trillion).

The services sector emerged as the top recipient of FDI equity in FY 2024–25, attracting 19% of total inflows, followed by computer software and hardware (16%) and trading (8%).

The Indian Government is actively looking to encourage foreign investment through Invest India, its investment promotion and facilitation agency. The agency offers investment advice, strategies and research for foreign companies. India has also established 272 special economic zones (SEZs) offering a wide range of incentives for domestic and foreign investors (details can be found in Section 5.1). These include duty-free treatment for imports, tax exemptions on export income, a single window for customs clearance, and land provided at concessional rates, among others. The two largest SEZs by export value are the Cochin SEZ in the southern state of Kerala and the Santa Cruz Electronic Export Processing Zone in Mumbai. It is important to be aware that the types of incentives can vary widely by SEZ.

The Indian Government offers a range of incentives to encourage domestic and foreign investment:

• National infrastructure pipeline: The government has committed to invest over AUD 2.8 trillion (154 trillion INR) in infrastructure projects to improve the Indian economy and quality of life for its citizens. It aims to increase both domestic and foreign investment by providing support to projects in key areas and facilitating investment in projects. Priorities include roads and highways, with 3624 projects worth AUD 599 billion (INR 33.0 trillion) and waste & water sector with 961 projects worth AUD 116 billion (INR 6.4 trillion).
• Corporate tax reduction: As part of the government’s goal to create a more welcoming business environment, the tax rate for foreign corporations has been reduced from 40 per cent to 35 per cent. For domestic companies, the corporate tax rates remain unchanged at 22 per cent.
• Startup India Initiative: Multiple schemes and initiatives are offered to build support for start-ups, including financial support, a credit guarantee scheme, and a threeyear period of income tax exemption out of 10 years since incorporation. In India’s 2024 Budget, the Indian government has abolished the long-standing angel tax (30.9 per cent), which was considered a major hurdle for the Indian startup ecosystem.
• Production Linked Incentive (PLI) Schemes: A targeted government investment program to increase the capacity of domestic manufacturing in India across pharmaceuticals, electronics manufacture, telecom and network communications, food processing, solar equipment, cars and car components, advanced batteries, LEDs, textiles and specialty steels.

More specific incentives can be found here.

Investment rules and regulations

India has made significant strides in simplifying its investment regime. Invest India, the country’s national investment promotion and facilitation agency, advises and facilitates strategic investment into India. It also supports business-friendly reforms that grow investment in all areas of the economy.

Specific programs also aim to reduce the compliance burden for businesses in India, simplify tax rules and promote projects in key areas such as infrastructure, tourism, textiles, food processing and ‘stressed’ assets. The government allows 100 per cent foreign investment in most sectors. However, foreign investment is prohibited in some real estate, railway operations and some financial services including chit funds (a pooled savings system) and Nidhi companies (peer-to-peer lending).

FDI into India is permitted via either the ‘automatic route’ or ‘government route’, depending on the sector and level of foreign ownership. Investments permitted under the automatic route do not require government approval. This means that 100 per cent FDI may be permitted without approval in key sectors including (but not limited to) agriculture, mining exploration, ecommerce and manufacturing.

For investments eligible via the government route, investors are required to apply for government review to the Department for Promotion of Industry and Internal Trade (DPIIT) and the relevant industrial ministry. If the investment exceeds INR 600 Crore (AUD 108 million), it must also be approved by the Cabinet Committee of Economic Affairs. Foreign businesses should be aware of the post-investment reporting requirements of the Indian Government.

Market entry models for investing

Market entry models for investing Choosing an appropriate market entry model is essential for businesses looking to invest in India. A business’ size, sector and growth strategy will help determine which market entry model fits best. Investment models frequently evolve over time as businesses enter and expand in a market. India offers a wider range of options than most other markets.

A. Liaison office 

Opening a Liaison office (LO) can be a useful and economical first step to explore business opportunities in India. However, LOs must be sustained by remittance from the parent company.

To establish an LO, the parent company must have a net worth of not less than USD 50,000 (AUD 77,000) or its equivalent and have recorded a profit in the past three years. Licences are for the period of three years and can be renewed. However, Non-Banking Finance Companies (NBFCs) and construction companies are subject to two-year terms without renewal. LOs must operate under the name of the parent company. The office is allowed to open a single bank account to receive remittances from the parent company. LOs are required to file Annual Activity Certificates (AACs) and audited balance sheets. They must also appoint a local representative with a valid Permanent Account Number (PAN).

B. Branch office 

Establishing a branch office (BO) in India allows a company to engage in many of the same activities as the parent company. These include importing and exporting goods or services, consultancy and research. BOs are not permitted to engage in retailing, manufacturing or processing activities. They must operate under the same name as the parent company.

The parent company must have a net worth of not less than USD 100,000 (AUD 154,000) and a record of profit over the preceding five years. Licences are for a period of three years, which can be extended for another three years subject to compliance and permission from the Reserve Bank of India. Income generated from Indian operations is taxed at an effective rate of 43.68 per cent. BOs must file Annual Activity Certificates (AACs) and audited balance sheets. BOs can open bank accounts for its operations and can hire local and foreign staff. BOs must also appoint a local representative with a valid Permanent Account Number (PAN).

C. Project office 

A project office (PO) allows a company to carry out a contracted project for the duration of the contract. It functions similarly to a BO, but is limited to projectrelated activities. A PO must operate under the same name as the parent company and can only undertake activities related to the specific project for which it was established.

Project earnings are taxed at an effective rate of 43.68 per cent. POs must file Annual Activity Certificates (AACs) and audited balance sheets. POs can open bank accounts for their operations and can hire local and foreign staff. POs must also appoint a local representative with a valid Permanent Account Number (PAN).

D. Limited liability partnership (LLP)

LLPs are governed under the Limited Liability Partnership Act, 2008. LLPs exist as a separate legal entity and are subject to an effective tax rate of 34.94 per cent, but partners’ distributions are exempt. At least one partner must be an Indian resident.

There is no minimum capital requirement to open an LLP. The company name must be unique and compliant with Indian naming regulations. LLPs must open a bank account and file annual financial statements, tax returns and other financial forms.

E. Wholly owned subsidiary (WOS)

Foreign companies in sectors in which 100 per cent FDI is permitted may establish a wholly owned subsidiary. This structure provides the most control over business activities and offers the lowest tax rates, which are between 17.16 and 25.27 per cent, depending on the sector.

A WOS may operate under a different name to its parent company. The parent company may also choose to limit its liabilities to the subsidiary. Wholly owned subsidiaries have more stringent compliance requirements than other market entry models. These include residency requirements for directors, mandatory board meetings and several forms pertaining to internal financial controls, in addition to filing annual tax and financial statements.

F. Joint venture

In sectors where 100 per cent FDI is not allowed, a joint venture (JV) with an Indian partner can be a good, low-risk option. All companies registered in India are subject to local laws for taxes, labour and industry-specific regulations.

JVs can be established as an equity investment in a separate legal entity, or as a temporary contractual agreement between two businesses. They may choose to incorporate or not. Foreign investors in JVs can benefit from any arrangement, depending on the scope of business activities. Australian businesses should seek professional advice when deciding on the terms of their Indian joint venture.

G. Public-Private Partnerships

A Public-Private Partnership (PPP) is a contractual arrangement between the Indian Government and the private sector. Under a PPP, the private sector can build, operate and maintain public infrastructure facilities and provide services traditionally delivered by government. Examples of these are roads, airports, bridges, hospitals, schools, railways, and water and sanitation projects.

India instituted a formal approval process for PPPs in 2005 and has actively promoted private sector involvement in major infrastructure projects. There are several ongoing projects and others planned across a variety of sectors. PPPs are complex to structure and implement, but present opportunities for established businesses to enter the Indian market.

Success in India’s large, complex market requires businesses to tailor their product or service. This should be based on detailed analysis of consumer trends, demographics, price consciousness, branding, marketing and advertising, and payment methods.

Consumer profiles and tastes are changing, largely due to demographic, income and technological shifts. India is home to a young population and a growing consumer class. It is also urbanising at an ever-faster rate. In the next 10-12 years, India’s cities will be home to more than 600 million people with urban areas contributing almost 70 per cent to GDP. Indian consumers in the larger cities value fast delivery and are willing to pay a premium, while those in the rest of the country are more pricesensitive and drawn to better deals.

The Indian market is shaped by a large and diverse population and there are significant living standard disparities, especially among the large number of Indian consumers who will continue to dwell in smaller cities. These cities will continue to be less developed than the largest markets in terms of digital literacy, infrastructure and other sociocultural factors. As the retail markets becomes increasingly disrupted by e-commerce, there are significant opportunities for businesses that can harness innovative technologies to bridge this urban-rural divide.

Businesses entering India should adjust their value propositions to cater to emerging consumer trends. Generation Z (born 1995 to 2009) is poised to become the most influential consumer segment in India by 2040 due to its large population and high forecast incomes, with Generation Alpha (born 2010 to 2024) following close behind. These informed and researchsavvy consumers will require product and service information that is easily vetted, accurate and reliable, and companies will need to innovate to get noticed.

Consumer trends in 2024

Figure 3: Median disposable income per household (2016-2026f), AUD, current prices

Price consciousness

Despite rapid economic growth, average incomes in India are still relatively low, due in part to a widening inequality gap. The national income per capita was AUD 4,088 in 2024, significantly lower than China (AUD 20,164), Indonesia (AUD 7,465) and the Philippines (AUD 6,040). India is classified by the World Bank as a lower middle-income economy.

India has one of the highest rates of inequality globally and the richest 1 per cent of the population own 40 per cent of the country’s wealth, a gap that continues to widen. This market fragmentation means businesses must remember that price points designed for the middle class in one market may be out of reach for the middle class in another and price adjustments to an already successful product can significantly boost sales.

Indian consumers value quality but are still price conscious and are willing to sacrifice quality for price. Bargaining on price is an ingrained practice among Indian consumers and should be factored into a successful pricing strategy. Among higher-income classes, the desire to stand out contributes to a greater willingness to pay a premium for well-known brands and personalised services that are tailored to their preferences

Branding

Branding is an essential part of product differentiation, and companies need to research and understand the specific tastes of Indian consumers to achieve success. Premium quality brands are more in-demand in the more prominent metropolitan areas, but pricing will still be a major concern to many consumers.

 Tailored product differentiation is growing in popularity, particularly among consumers with middle to higher incomes. New brands have opportunities to enter the market with targeted promotional campaigns to build a product’s reputation and reach. To reach India’s rapidly growing younger generation of consumers, any branding will also need to develop a strong social media engagement strategy.

Australian businesses in some sectors enjoy a branding advantage simply by virtue of their products being made in Australia. Generally, Australian products have a strong reputation for high quality in India and an emphasis on Australian origin can be a marketing asset for businesses to leverage, particularly in the food and beverage and agricultural sectors.

Austrade’s Nation Brand toolkit provides a range of free branding assets for businesses looking to export.

Marketing

Trade marketing to distributors and retailers can be an effective way for businesses to gain traction in the Indian market. A trade show can be a useful starting point. These are efficient ways to reach new consumer bases and potential clients. They also offer insights into the operations of competitors and provide a forum for networking and relationship building.

Trade shows are popular in India, with around 500 shows every year across fashion, manufacturing, medical devices, electrics, personal care and many other sectors. There are opportunities for foreign investors to partner with trade show organisers to promote their products and services and reach multiple potential clients.

Sales promotions may also help establish a brand with high-impact campaigns, but retail companies may need to consider several different approaches to reach India’s fragmented population that is split between rural and urban, and comprised of different cultures and habits. Running campaigns and sales promotions around major festivals and offering combination deals and discounts is necessary to target consumers outside of the major cities.

Digital marketing methods are gaining popularity as smartphone penetration increases. Email, text, search engine optimisation and social media are now integral parts of a comprehensive marketing campaign. English is widespread among the target market for Australian products, so it is often not necessary to translate marketing and promotional material into Hindi or other regional languages. However, hundreds of languages are spoken across the country, with 22 major languages recognised under the Constitution, so translation of marketing materials may be required, depending on the advertising medium, location and target market.

Advertising and media

India’s young population is accelerating the uptake of mobile technologies and increasing the reach of digital advertising (Figure 4). In 2025, Television and video share a market volume of AUD 10.2 billion. However, digital media is the fastest growing advertising segment with over 55 per cent market share, followed by television, print media, radio and outdoor advertising. The number of online shoppers in India surged from 140 million in 2020 to nearly 260 million in 2024. While television and print advertisements remain a trusted marketing source in India, digital channels are now an essential part of any advertising campaign.

Australian businesses kicking off campaigns should be mindful of standards set out by the Advertising Standards Council of India (ASCI), a self-regulatory organisation that aims to ensure that advertising content is fair, honest and complies with the ASCI code. ASCI covers advertising, advertising agencies, print and broadcast media and other sectors including PR agencies and market research companies.

The language used in any advertising content will depend on the target audience. Australian businesses looking to promote their products or services in India can seek professional help from local and international advertising and media companies.

Figure 4: Digital advertising audiences in India (2025)

Digital payments

Digital payment methods are rapidly gaining popularity in India and have seen unparalleled growth in the past decade. They are expected to double in value from current levels to reach AUD 10.6 trillion in 2030. Among urban Indians, 90 per cent now prefer digital payments for online purchases.

The most popular B2C digital payment methods in India include e-wallets, debit and credit cards, and cash on delivery (Figure 5). UPI is the most popular digital payment platform for online purchases. In September 2025 alone, the system saw 19.6 billion transactions. Paytm, Google Pay, PhonePe and Amazon Pay are also widely used for both internet banking and digital wallets.

Other popular payment methods include credit and debit cards, like Amex, Mastercard and Visa. The Aadhaar-enabled Payment System (AePS), gaining popularity in rural areas, allows consumers without a debit card to pay for goods and services using biometric information and their Aadhaar number given to the retailer.

Digital payments can make financial transactions safer, cheaper and more convenient. As digital payment options continue to expand and evolve in the Indian market, businesses should consider integrating them into their business models.

Figure 5: Payment methods for B2C e-commerce (2025), %

A well-considered market entry strategy should take a systematic approach that supports long-term success. This section distils the factors businesses should consider when formulating an approach to the Indian market into a series of key questions.

Asialink Business provides advisory services and capability training programs to help organisations understand and access opportunities in Asian markets. Should you have questions about any aspect of your India market entry strategy, please contact us. Austrade’s India office also provides services and support to Australian businesses with an interest in India (details can be found in Section 5.2).

Calibrating Ambition

• What is your company’s aspiration for the market?
• What are the challenges and risks you will need to mitigate?

Consumers

• What is the current or potential demand for your product or service in India?
• Who are the primary customers / consumers for your product or service in the market?
• How will you tailor your product or service to local preferences?

Competitors

• Who are your competitors in the market, and what is their offering?
• How does your product or service compare to competitors on price?

Sales, Brand and Marketing

• What is your unique value proposition for the market?
• What is the ideal mix of marketing and sales channels to reach your target customers?
• Is your marketing strategy aligned with your identified consumer base and value proposition?

Mode of Entry

• What is the right market entry model for your business?
• What are the specific geographies you should target?

Delivery Partners

• Does your team have the right mix of skills and expertise to support your market entry?
• What partnerships will contribute to your business’ success in the market?
• What external advice do you need to commission?

Operating Model

• What changes do you need to make to your business across areas such as operations, HR, finance and IT?

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