India is one of the fastest-growing large markets in the world — and one of the most structured to enter. Success is less about demand than about choosing the right legal vehicle, the right FDI route and the right sequence. Here's the map, with the laws that govern each step.
Entering India runs on three decisions: the legal vehicle (from a liaison office to a wholly-owned subsidiary, under the Companies Act 2013 and FEMA 1999), the FDI route (automatic for most sectors, government approval for a few, under the DPIIT policy), and the compliance sequence (incorporation, RBI reporting, tax and GST registration, and any sector licence — e.g. CDSCO for medical products). Get the structure and sequence right and the rest follows; get them wrong and you rebuild.
For a German manufacturer, India offers scale, a large engineering talent base and a government actively courting foreign investment through “Make in India” and Production-Linked Incentive (PLI) schemes.
But India is a federal country with a layered regulatory system: national law sets the framework, states handle land, labour and incentives, and sector regulators gate specific industries. “Entering India” is therefore an architecture decision before it is a sales one — and the architecture is what this article maps.
In India, the entity you choose on day one decides what you're allowed to do for years after.
India offers a ladder of entry structures — from a lightweight representative presence to a full operating company. Each is governed by specific law and permits a different scope of activity.
Most German companies serious about operating (rather than just observing) land on a wholly-owned subsidiary — but the right answer depends on whether you're selling, manufacturing, or testing the market first.
A wholly-owned subsidiary is the fullest path; the sequence below is the one most operating entrants follow. Timelines vary, but the order rarely does.
Decide the vehicle, the target state(s) and whether you go own-entity, JV or distributor. This choice constrains everything downstream. Companies Act 2013 · FEMA
Confirm whether your sector is automatic (no prior approval) or needs government approval, and any equity cap. DPIIT FDI Policy
Register the company through the MCA (SPICe+ form): name approval, director IDs, PAN & TAN, registered office. MCA / ROC
Open the bank account, remit share capital, and file the foreign-investment report with the RBI (Form FC-GPR). RBI / FEMA
Activate PAN / TAN, register for GST, and any state professional tax. GST 2017 · Income Tax
Where your product is regulated, secure the relevant licence — e.g. CDSCO for medical products, BIS for certain goods. Sector regulators
Annual ROC filings and audits; repatriate profits and dividends under FEMA, benefiting from the India–Germany double-tax treaty. FEMA · DTAA
Foreign investment enters through one of two lanes, set by the DPIIT policy under FEMA. Which lane you're in depends entirely on your sector.
Most sectors, often up to 100% foreign ownership. You simply notify the RBI and comply with sector rules. Over 90% of FDI inflows use this route.
Sensitive sectors (e.g. defence, certain media, some brownfield pharma) require approval from the relevant ministry plus DPIIT concurrence, and may carry equity caps.
Checking your exact sector, cap and route on the current DPIIT FDI policy is the first regulatory step — it determines whether entry is a filing or a full approval process.
Four things shape the running cost and cash flow of an Indian entity. None are optional; all reward being set up correctly from the start.
The unified Goods & Services Tax (2017) applies to most supplies; registration is mandatory above thresholds.
Rates depend on structure and turnover; concessional rates have applied to new manufacturing companies.
The double-taxation treaty prevents the same income being taxed twice and caps withholding on dividends, interest and royalties.
Profits and dividends can be sent home, subject to FEMA rules, tax clearance and documentation.
Registrations to line up early: PAN and TAN (tax IDs), GST, and — for employers — provident fund and state professional tax. Annual ROC filings and a statutory audit are standard for a company.
India's healthcare market is large and growing fast — but drugs and medical devices are gated by the CDSCO (Central Drugs Standard Control Organisation) under the Drugs & Cosmetics Act 1940 and the Medical Device Rules 2017, which classify devices by risk into Class A / B / C / D.
Crucially, a foreign manufacturer cannot import directly: you must appoint an Indian Authorized Agent who holds the right wholesale/manufacturing licence and obtains a registration certificate (Form MD-42, via the SUGAM portal). The import licence itself is applied for on Form MD-14 and granted as Form MD-15.
This is the reverse of what we do into Germany — and the same discipline: authorization is one project, distribution and market access another. If your product is regulated, the licence path belongs in the entry plan from day one, not after incorporation.
The German engineering mindset builds the product perfectly. India rewards building the structure just as deliberately.
Start with a fixed, low-risk deliverable, then pressure-test it in a working session. You never commit more than the next step requires.
A one-off, written roadmap tailored to your product and sector — so you know the structure, route and cost before you commit.
A focused session to pressure-test the roadmap, weigh the trade-offs for your case, and plan execution — entity, partners and first moves.
This article is a general educational overview of market entry into India and is not legal, tax or regulatory advice. FDI caps, tax rates, licence requirements and forms change; verify the current position for your sector and product on the official portals above, or with qualified Indian counsel, before acting.