10 Tips for Doing Business in India in 2024

India presents great opportunities, but foreign companies would be wise to navigate around these prospective challenges.

As a location for operational expansion and as an export market, India presents one of the largest economic opportunities in the world. The country’s recent investments in infrastructure and logistics management, coupled with its growing skilled workforce, are advantageous to foreign companies looking for trade partnerships. But like many great opportunities, doing business in India also presents some risks.

Boasting a consumer base of 1.3 billion people, India offers a tempting prospect for exporters. The country’s flourishing middle class and large population of young people signal years of market growth to come. On top of these demographic trends, India offers a diverse economy and business-focused government initiatives. Many economists predict that the country will someday challenge, or even overtake, China as the unofficial “factory of the world.”

India’s rapid digitalization is a major contributing factor to its recent economic growth. Today, India has one of the world’s largest networks of digital payment interfaces, which is accessible to nearly every segment of the population. The use of cash has decreased, as most business transactions—even at the lowest level—are now conducted digitally. Exporters can tap into this new digital infrastructure to secure payments and expand their sales in India.

However, any company that has, or is considering, a presence in India would be wise to keep these 10 tips in mind for 2024:

1. Be prepared for paperwork. Though India’s government has tried to improve the “ease of doing business,” the country still has a long way to go. Exporters need to be aware of, and comply with, a multitude of customs procedures, import regulations, and documentation requirements. It is also important for prospective exporters to understand any compliance requirements for the sectors in which they operate.

In some industries, regulations favor indigenization as part of a larger “Make in India” initiative, which supports domestic production and manufacturing while limiting imports in specific areas. Foreign businesses in the electronics, automotive components, and other sectors face this challenge.

2. Do your research. Any organization looking to do business in India must do market research, preferably with a renowned local firm, to anticipate local demand for its products and services. Cultural differences between regions of India mean a product mix, and marketing efforts, that are accepted in one part of the country may not be successful in another part of the country. Different areas of India have different tastes, preferences, and buying behaviors—for example, the market in the south of India is more advanced in incorporating technology than is the rest of the country.

Understanding these types of cultural differences is vital to any organization considering doing business there. Companies can achieve these insights through proper market research, and then can effectively target the right market segment.

3. Put time and effort into choosing the right distribution channels. There is no one-size-fits-all correct approach when it comes to distribution channels. Exporters must decide whether they need to go through local distributors and agents or have their own presence.

If going through a distributor, corporate leaders should look closely at their potential partners’ business reputation, financial resources, regional coverage, and marketing capabilities. Common market-entry strategies include wholly owned subsidiaries, joint venture/equity participation, and branch offices, to name a few.

Foreign businesses exporting goods to India must also hire a local distributor to complete customer transactions. A benefit to selecting export as a market-entry strategy is that the foreign entity can gain access to the local distributor’s client base.

4. Use secure payment terms. Foreign entities need to secure their payment terms with entities in India using a letter of credit or documentary collection through the buyer’s bank. Credit insurance can also be a good option if the relationship will entail open-account transactions.

It is smart to start working with a customer using secured transactions, even if the relationship will eventually transition to trading with an open bill. Regardless of the foreign company’s approach, it must clearly state its payment terms in the contract, as settlements through the Indian court system can be tedious.

5. Avoid getting taxed twice. The company should also check to see whether the country from which it will be exporting has signed a double-taxation treaty with India. This can help ensure that the same income is not taxed twice. It is also important to understand any import restrictions, as defined by India’s Ministry of Commerce and Industry. Be aware that India has different tariff rates based on product category and country of origin. And there could be preferential trade agreements in place that might affect a particular business’s exports to India.

6. Secure all intellectual property. Intellectual property—including copyrights, patents, and trademarks—requires protection. Although India has laws and enforcement procedures covering almost every type of intellectual property rights, the litigation process is often lengthy and uncertain, and the same issues can remain pending for many years.

The Commercial Courts Act, enacted in 2015 and amended in 2018, was established to help reduce delays and increase expertise in judicial intellectual property matters. However, to date, only a limited number of courts have benefited under the act. Criminal penalties are not expressly available for trade secret misappropriation in India, and civil remedies are difficult to obtain and may not serve as an effective deterrent.

7. Understand cultural and business etiquette. Although the standard language for business correspondence in India is English, there are cultural nuances for doing business there that differ from those in other countries. Maintaining relationships and fostering partnerships with Indian partners can be highly valuable, and can set up a foreign business for growth in the years to come.

8. Do your due diligence. Private limited companies in India must share their financial information on an annual basis; the process is fully digitized, and the data is easily accessible online. Other types of companies do not have to make their financials public. But any organization considering open-bill trading in India without trade credit insurance should buy additional financial data through a trusted provider. Hiring a local consultant who can check on trading partners’ licenses, local compliance, and financial creditworthiness is also a good idea.

9. Be prepared for delayed payments. It is not unusual to encounter payment delays in India, so it is a good idea to build up experience with a trading partner before expanding the relationship. Delays in payments are often caused by interdependent value chains, and they may cause domino effects. Nevertheless, it is exceedingly rare for buyers to default in order to avoid financial obligations.

10. Avoid legal battles. If a foreign company does ever need to recover an unpaid debt, settlement outside of court is the norm in India. Avoiding the court system often results in a better and quicker outcome. This is partly because, in a cultural context, bankruptcy is not viewed positively in Indian society. Buyer-seller relationships are strong, and amicable settlements are often the best way to settle disputes and recover monies. Debt recovery through legal recourse can be both risky and time-consuming.

As India’s global presence grows, so will its opportunities. Businesses with a clear strategy for navigating this exciting and growing market will be prepared to reap the dividends.


Arun Soundarajan is the country manager for India at trade credit insurer Atradius. Soundarajan joined Atradius in 2010. Ever since, he has supported the steady growth of Atradius in India. He has more than 25 years of credit management experience.