Costs of Doing Business in India
Doing Business in India Guide > Costs of Doing Business in India
While many foreign companies are initially attracted to India because of low labor costs, it is a good idea to draw out the complete picture.
Compared to most other countries the cost of taxes may be higher in India. Utility costs can also be higher: India imports most of its gas and oil. Electricity costs are higher and most factories and offices require backup power in the form of diesel-fired generators, batteries are more. While road and rail transportation is improving, your relative cost of transport logistics may be higher than other countries. The relative cost of real estate can seem surprisingly high in major Indian cities. And so can the cost of top hotels.
Many costs besides labor are lower in India. Medical insurance and health benefits don’t drain employers as they do in the United States. Workers’ compensation and other insurance is lot more affordable as a percentage of payroll. Since corporate laws don’t vary from state to state in India, you don’t have to hire attorneys in multiple states. Hiring a chauffeur driven car or a nice taxi for the day won’t dent the budget of most overseas travelers.
Distributing products for sale in India can be much more complex than in the West. Multiple channels and multiple layers are common; while each layer may be relatively inexpensive their cumulative effect on costs can be substantial; more important this system can isolate the foreign company from the end-customer and their changing preferences. A competent advisor can guide you on how to stay informed.
We hope that our Doing Business in India Guide will help answer some of the routine questions we get asked. Please Contact Us if you need more in-depth assistance when looking to do business with India. We'll be glad to help.Useful Links
Third Party Resources
Doing Business in India Guide - World Bank Group
India Bribe Taxes and the Cost of Doing Business - The Tax Foundation
