Entry Strategies for Foreign
These websites of Indian government give adequate
With the liberalization of the India economy, the
large Indian market is being opened up to foreign investors. Several
companies are setting up or have already set up operations in India
to cater to the Indian market. There are several strategies by which
a foreign enterprise can set - up Indian operations. This module
aims to give the various entry options available to a foreign investor,
especially for foreign direct investment. This module does not deal
with portfolio investments.
Broadly, entry strategies may be classified into
two major types :-
A foreign investor may directly set up its operations in India through
a branch office or a representative office or liaison office or
project office of the foreign Company ; or
It may do so through
an Indian arm i.e. through a subsidiary company set - up in India
under Indian laws.
Generally, setting up operations through an Indian
arm is advisable, especially if the quantum of investment is huge.
A Foreign company is one that has been incorporated
outside India and conducts business in India. These companies are
required to comply with the provisions of the Indian Companies Act,
1956 as far as the Indian Operations are concerned.
Foreign companies can set up their operations in
India through opening of liaison, project and branch offices. Such
companies have to register themselves with the Registrar of Companies
(ROC), New Delhi within 30 days of setting up a place of business
The following are the entry strategies for a foreign
enterprise in case the Indian operations are to be run directly
by a foreign company through a branch office or a representative
office or liaison office or project office of the foreign company
1. Liaison Office / Representative Office
2. Project Office
3. Branch Office
4. Appointment as Agent in India
6. 100% subsidiary company
7. Joint Venture manufacturing with an Indian partner
8. Transfer of Technology
Joint venture with an
Foreign companies can set up their operations
in India by forging strategic alliances with Indian partners.
Setting up of operations through a joint venture
may entail the following advantages for a foreign investor:-
established distribution/marketing set up of the Indian partners
resources of the Indian partner
of the Indian partner which help smoothen the process of setting
up of operations.