Summary
US Companies in India are tapping into massive growth opportunities driven by a young workforce, cost-efficient talent, supportive government reforms, and strong digital infrastructure. With EOR or subsidiary models, US firms can scale quickly, stay compliant, and expand confidently in 2025.
Why would a business miss the opportunity to excel and expand rapidly?
Why would a business miss the opportunity to extend beyond the borders without any risk?
Why would a business miss the opportunity to work with loyal partners?
Don’t know about others, but US companies should definitely not miss these opportunities to expand business in India.
But, if life gives you India – a land of growing business opportunity- bring your business to new heights.
Now you must be ready with so many questions, like why the US Businesses should expand in India.
How is it possible? What are the opportunities in India? How do we tackle laws and regulations?
Do not let your short attention span keep you away from the most important information.
Read this blog till the end to know all the answers to these questions.
Why is India the Best For the US to Expand Business?
According to CNN Business, the US is already India’s largest trade partner, accounting for almost $120 billion. This directly suggests how the US trusts India for business.
Additionally, expanding business in India would definitely be cost-effective.
Also, the huge youth population brings a vast talent pool. But there are more important reasons why the US should expand business in India.
Let’s understand those reasons.
Legislative Reforms and Proposed Regulations
Before expanding into a new country, laws and regulations are the most important concerns for a company.
However, India has acts that support and make foreign businesses feel secure from the risks. These policies make India a desirable location for US-based companies.
The Digital Personal Data Protection Act of 2023 (DPDP Act) was enacted by the Indian government in 2023.
By ensuring security and privacy under its terms, this act protects the company’s personal data. As a result, American companies can now enter the Indian market without fear of data privacy issues.
Numerous laws, or the Jan Vishwas Act, amend several existing laws, such as:
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- The Information Technology Act, 2000
- The Payment and Settlement Systems Act, 2007
- The Copyright Act, 1957
- The Legal Metrology Act, 2009
- The Environment Protection Act, 1986
- The Trademarks Act, 1999,
protects foreign companies.
Favorable Government Policies
To create a better business environment, the Indian government has implemented several policies that favor foreign businesses.
These policies would be beneficial for US companies in India to nurture and protect the innovations.
Also, these initiatives generate a large number of employment opportunities.
US companies in India can leverage these schemes and expect sustainable business growth.
Policies like easing Foreign Direct Investment (FDI) regulations, simplifying tax structures, and launching initiatives such as “Startup India” to support startups and new innovative ideas, and “Digital India” to create digitally empowered businesses.
The aim was to improve online infrastructure and internet connectivity.
Market Potential
India is widely known as a major economy.
Given its market potential, the nation attracts companies from all around the globe.
The Indian government launched the Pradhan Mantri Gram Sadak Yojana to promote rural development.
This project has enhanced connectivity and infrastructure, helping foreign companies grow in India.
Given its large population, India is also an attractive consumer market for manufactured goods and services.
India’s consumer market is ever-changing, and shifts in consumer behaviour offer greater opportunities for international businesses.
India is transforming digitally and presenting rapid growth in opportunities for foreign businesses.
Digital payments or cashless exchanges have given a boost to entrepreneurs.
For example, brands like Amazon, Uber, Apple, and Netflix have experienced rapid growth.
India offers access to huge markets in South Asia, Central Asia, and the Middle East.
Who would miss access to such big market chains? The US businesses can access the opportunity to expand beyond the borders of India.
Due to free trade agreements with major global economies, it is a win-win for US companies in India.
Now that you have understood the reasons why US companies should expand business in India, let’s understand the opportunities for US companies in India.
What Are The Opportunities for the US Companies in India?
India offers numerous opportunities across multiple industries. India is an absolutely lucrative market for U.S. businesses looking to expand.
1. Growing Consumer Market
India is famously known for its vast consumer base.
The country has become accustomed to the disposable income and the increasing adoption of digital payment methods.
This is why consumer spending is important and why establishing opportunities for US companies in India is important.
They can find a great retail, e-commerce, and consumer goods market and expect good growth.
2. IT and Tech Industry Expansion
India has built a great reputation in the IT and technology sector.
Indians provide a strong workforce that is skilled in software development, cybersecurity, and artificial intelligence.
Well, about AI, even a schoolkid in India has become a pro at it.
In fact, in 2024, Forbes’ AI 50 list featured 6 companies led by Indian Americans. This shows the high adaptability of Indians to new technologies.
US companies setting up operations in India can take advantage of outsourcing.
Also, with the help of an Employer of Record, US companies can hire a remote team in India.
3. Manufacturing and Industrial Growth
India is also known as a global manufacturing hub, with schemes such as the Production-Linked Incentive (PLI) and “Make in India”.
The US companies establishing business in India should consider the electronics, automobile, and pharmaceutical industries.
US companies in India can benefit from lower costs and government incentives.
4. Healthcare and Pharmaceutical Industry
India’s healthcare sector is rapidly growing, creating opportunities for US companies in India in the pharmaceutical and medical device industries.
India produces generic medicines on a large scale and is among the world’s largest producers.
US companies in India can benefit from research collaborations, contract manufacturing, and expanded access to affordable healthcare solutions.
5. Renewable Energy and Sustainability
India has set ambitious targets for hydroelectric, wind, and solar energy. India has made a substantial financial investment in renewable energy due to their significance.
American companies in India that are successful with renewable energy technologies can work with local companies.
Here’s a list of US companies involved in renewable energy in India:
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- General Electric (GE Vernova)
- Husk Power Systems
- SunPower Corporation
- Blue Oak Energy
- US Development Finance Corporation (DFC)
- Augment Infrastructure
Now that we are aware of all the opportunities, let’s examine how American companies enter or expand in India.
How do US Companies do Business in India?
US companies can enter the Indian market in various ways.
The ways are owning a subsidiary, partnering with a local, or offering a franchise model.
Reforms and policies of the country have simplified for US companies in India to invest and operate.
Let’s understand two important and beneficial ways in which US companies do business in India.
Owning a Subsidiary
Large US companies prefer to follow Indian law and own subsidiaries in India.
Having one’s subsidiary offers complete control over the operations. However, this does not mean the owner is relieved of local tax and labor laws.
Employer of Record (EOR)
This is the best option for companies that want to understand the Indian market but cannot immediately form a subsidiary.
The employer of record (EOR) helps US companies form a team of experts in India.
Indian laws and regulations also apply here, but US companies do not have to worry about compliance, which makes it easier to enter the Indian Market.
Conclusion
India provides a balance of scale, skill, and speed for US businesses with global aspirations.
It is not just a desirable location but also a crucial component of any global expansion strategy, given its young population, thriving market, and digital transformation journey.
American businesses are already reaping the rewards of doing business in India, whether through outsourcing operations, establishing a consumer brand, or creating an R&D center.
Strong diplomatic links, a common legal system, and a shared interest in innovation make the US-Indian corporate partnership ready for even bigger things.
In today’s rapidly changing global economy, expanding to India isn’t just an opportunity—it’s a smart, strategic move for long-term success.
About Remunance
Remunance is an Employer of Record (EOR) services provider in India, helping global companies hire, manage, and support full-time employees without setting up a local entity. We take care of HR, payroll, compliance, and benefits so businesses can focus on growth while building their teams in India with confidence.
Remunance enables businesses from UK, Australia, Canada, France, US, and the Middle East to recruit, hire, and manage workforce and benefits in India.
