An Introduction to Doing Business in India 2023 for EU Businesses – New Publication from Dezan Shira & Associates

An Introduction to Doing Business in India 2023 for EU Businesses, the latest publication from Dezan Shira & Associates, is out now and available as a complimentary download on the Asia Briefing Publication Store.

What’s in this guide

Namaste and welcome to our guide on Doing Business in India for EU Businesses in 2023!

In this exclusive edition, we shine a spotlight on the robust economic partnership between India and the European Union (EU), having completed 60 years of bilateral relations in 2022. Remarkably, their bilateral trade volume reached an all-time high of US$132.09 billion in FY 2023. This milestone presents abundant opportunities for both partners to leverage their synergies across various sectors.

Recent geopolitical developments have prompted India and Europe to prioritize stronger ties, paving the way for collaboration in areas, such as digitalization, clean energy, research, manufacturing, FinTech, infrastructure, and education. These partnerships hold immense potential, particularly for small and medium-sized enterprises (SMEs) and business alliances in both India and Europe.

India’s rapid growth trajectory, coupled with its business-friendly reforms, positions it as a key player in shaping the global economy of the 21st century. Despite facing external challenges, India has experienced an unprecedented surge in mergers and acquisitions (M&A) activities and has nurtured a thriving startup ecosystem with over 100 unicorns. Moreover, India’s development agenda places significant emphasis on modernizing its infrastructure, including connectivity projects, integrated industrial townships, and initiatives to strengthen sector-specific domestic manufacturing capabilities.

European companies are actively contributing to India’s transition to an innovation-based and sustainability-driven economy. In recent years, EU investments in India have more than doubled, with a particular focus on sectors, such as high precision manufacturing, pharmaceuticals, and e-commerce.

As engagement between India and the EU continues to deepen, it becomes crucial for European companies aiming for success in India to understand market dynamics, regulations, and local consumer preferences.

To assist European businesses in formulating their India market strategy, this business guide has been created by Dezan Shira & Associates, a specialist firm that provides comprehensive business services to multinational investors in emerging Asia. Its valuable insights will support European businesses in navigating the Indian market landscape effectively.

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An Introduction to Doing Business in India 2023 for EU Businesses covers the following topics:

• India’s investment climate
• Foreign trade scenario: Policy and procedures
• India-EU investments, trade, and potential for collaboration
• Setting up a business
• Mergers and acquisitions
• Taxation
• Transfer pricing
• Financial reporting and audit
• Human resources and payroll

Doing Business in India 2023 at a glance

Doing Business in India 2023 for EU Businesses is designed to introduce the fundamentals of investing in India. Compiled by the professionals at Dezan Shira & Associates in June 2023, this comprehensive guide is ideal not only for European businesses looking to enter the Indian market, but also for companies who already have a presence here and want to keep up to date with the most recent and relevant policy changes.

Why India: When considering India or any other country as a potential relocation or investment destination, thorough research of various factors relevant to their specific situation is crucial for foreign investors. These factors encompass infrastructure, geographical locations, talent availability, access to raw materials, incentives, supply chain partnerships, logistics, and more. This chapter provides a concise overview of the essential elements that make India an appealing investment hub for foreign stakeholders. Additionally, it highlights investment opportunities in key sectors, such as automobiles, manufacturing, information technology (IT) and IT-enabled services (ITeS), clean mobility, renewables, and others.

India’s trade policy and procedures: This chapter offers valuable insights into the latest foreign trade policy, export-import procedures, and the government’s initiatives aimed at promoting trade facilitation.

Bilateral relations between India and the European Union (EU): India and the EU share a vibrant Strategic Partnership that is growing rapidly. This partnership spans politics, strategic affairs, trade, commerce, climate and sustainability, digital technology, and people-to-people connections. By understanding the evolving dynamics and capitalizing on their respective strengths, EU companies can establish a robust foothold in India’s dynamic market and contribute to the thriving EU-India partnership. This chapter delves into the patterns of trade and investment within the India-EU bilateral relationship while identifying sectors that hold potential for mutual benefits through economic synergies.

Setting up a business in India: This chapter has been updated to list the critical policies and processes relevant for establishing a corporate presence in India. It highlights various investment vehicles through which foreign investors can do business in the country.

M&A in India: Defying global downward trends, India registered a record surge in dealmaking activity in the first three quarters of 2022. This trend is likely to further propel in 2023 on the back of factors like growth in big tech, buoyant cash reserves, increasing
FDI inflows, and an enabling regulatory regime. This chapter addition provides an overview of India’s M&A regulatory landscape and key processes involved in executing a successful deal.

Taxation in India: In recent years, India has taken concerted efforts to streamline, simplify, and automate its taxation regime to increase predictability and fairness. Resultingly, India’s ease of doing business has considerably improved. This chapter provides an updated overview of taxation in India, highlighting key corporate, GST, and personal tax rates as well as incentives available for businesses.

Transfer pricing in India: Entities doing business in India that conduct international transactions are required to ensure their accounting practices and tax assessment includes compliance with transfer pricing regulations. This chapter addition provides a brief overview of regulatory framework governing transfer pricing in India.

Financial reporting and audit requirements: This chapter addition provides a brief summary of financial reporting and audit requirements in India.

Human resources and payroll in India: This chapter has been updated with a summary of the latest technology trends likely to dominate the HR sector in India in 2023. Additionally, it provides an outline of regulatory provisions governing human resources in India, including the labor codes (likely to be implemented in 2023), minimum wage, working hours policy, etc.

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