US Companies in India: How to Expand, Hire, and Stay Compliant in 2026

US companies in India now run AI data centres, chip plants, bank technology hubs and retail businesses across the country. US investors put $11.17 billion of FDI equity into India in FY26, more than double the year before, according to Invest India’s FDI data.

They did it amid a tariff fight.

So if you’re planning a move to India, you have company. Microsoft, Amazon, Google and Eli Lilly alone have committed about $68.5 billion since October 2025.

This guide gives you the trade numbers, the deal status, the companies already here, and the 2026 rule changes that hit your payroll. You’ll also get worked cost examples and the five routes to your first hire. New to the market? Start with our guide to doing business in India.

How Big Is the US-India Business Relationship In 2026?

The US is India’s largest trading partner and its third-largest source of FDI since 2000.

Two-way goods trade hit a record $140.79 billion in FY26, per IBEF’s India-US trade data. India exported $87.31 billion and imported $53.48 billion.

Add services and the number grows. The Office of the US Trade Representative puts US-India goods and services trade at $239.6 billion in calendar 2025, up 12.1% on 2024.

Investment tells the same story. Cumulative US FDI equity reached $81.8 billion by March 2026, behind only Singapore and Mauritius.

Did The 2025 Tariff Fight Slow US Investment Into India?

No. US FDI equity into India more than doubled to $11.17 billion in FY26, even while US tariffs on most Indian goods sat at 50%.

Trade flows moved too. India’s exports to the US grew under 1% in FY26, while imports from the US jumped 17.2%, led by crude oil and LNG, per IEEFA’s analysis.

So if you sell US-made goods, India is now one of your faster-growing export markets.

Where Does the India-US Trade Deal Stand In September 2026?

There is no signed India-US trade deal yet. Both sides agreed an interim framework in February 2026, and the full bilateral trade agreement is still under negotiation.

Here is how it got there:

• • August 2025: US tariffs on most Indian goods reached 50%, a 25% reciprocal rate plus a 25% penalty tied to Russian oil purchases.
  • February 2026: An interim framework cut the reciprocal rate to 18% and removed the oil penalty. India agreed to cut or remove tariffs on all US industrial goods and many farm products, per the US Embassy fact sheet.
  • February to July 2026: A US Supreme Court ruling on emergency tariff powers forced Washington to rebuild the legal basis of its tariffs, so headline rates moved again.
  • September 2026: Commerce Minister Piyush Goyal said India will sign once the US offers a rate better than competitors such as Vietnam and Bangladesh, as Bloomberg reported.

Hence, treat any tariff figure you read as provisional. If you ship goods either way, check the live rate on your HS code before you sign a price.

Do US Tariffs Affect You If You Only Hire A Team In India?

Mostly, no. Tariffs apply to goods crossing the US border, and the work your India team does is a service.

The policy to watch is the HIRE Act. Senate bill S.2976 proposes a 25% excise tax on payments to foreign persons for services that benefit US consumers. It would also deny the tax deduction on those payments.

It was introduced in October 2025 and hasn’t moved past that stage. It isn’t law.

But don’t assume a captive team sits outside it. Advisers at RSM point out that payments to your own foreign affiliates could count as outsourcing payments.

How Does the H-1 B Fee Fight Change Your Hiring Plans?

It makes an India team a practical hedge. A September 2025 proclamation added a $100,000 fee to new H-1B petitions for workers outside the US.

A federal court vacated that fee in June 2026. The First Circuit then refused to reinstate it on 24 July 2026 while the appeal runs, per Littler.

The rules may flip again. Your engineers in Bengaluru don’t need a visa lottery to start on Monday.

We’ve unpacked what the new H-1B rules mean for your hiring strategy, and how an EOR helps with US labour shortages.

Which US Companies Already Operate In India?

The list runs from Big Tech and chipmakers to banks, drugmakers and retailers. If you searched for US-based companies in India, this table shows the biggest recent moves by American companies in India.

For a wider directory, AmCham India’s compendium of US companies profiles its members and their India work.

How Many Global Capability Centers Run In India?

India hosts 2,117 GCCs employing 2.36 million people, with $98.4 billion in FY26 revenue, per the Nasscom-Zinnov GCC report.

506 of the Forbes Global 2000 run one here. US banks, retailers and software firms own many of the largest.

See where they cluster in our guide to GCC hubs in India.

Which Sectors Give US Companies The Biggest Opportunities In India?

Five stand out in 2026: AI and cloud, electronics and semiconductors, pharma, clean energy, and consumer markets.

Still comparing countries? See how India stacks up against other outsourcing destinations.

Why Is AI and Cloud The Fastest-Moving Opportunity?

Because the infrastructure money is already committed. Microsoft, Amazon and Google pledged about $67.5 billion between them in late 2025, as Business Standard reported.

Talent is the other half. Microsoft CEO Satya Nadella projects India will have 57.5 million developers by 2030, the largest base in the world, as The Hans India reported.

That cuts both ways for a mid-sized US firm. You get a deep pool, but you compete with these giants for senior AI engineers. Budget above the median if you want to hire developers in India who have shipped production AI.

What Makes Electronics And Semiconductors Attractive?

Scale and subsidies. India’s electronics exports rose to $47.96 billion in FY26 from $38.56 billion a year earlier, per IBEF.

Micron opened India’s first commercial chip assembly and test plant in Sanand, Gujarat, in 2026. The project carries about $2.75 billion of combined investment from Micron and its government partners, per CRN Asia.

Why Are US Pharma Companies Expanding In India?

Manufacturing depth. Eli Lilly announced over $1 billion for Indian contract manufacturing in October 2025, with a new quality hub in Hyderabad, as Bloomberg reported.

Building a regulated team? Read our note on offshore team expansion in pharma first. Quality roles need tighter onboarding than tech roles.

Is Clean Energy Still Open To US Firms?

Yes, especially for storage, grid equipment, and engineering services. India’s target of 500 GW of non-fossil power capacity by 2030 keeps demand high.

Our piece on renewable energy demand in India covers the demand side in more detail.

How Big Is The Consumer Opportunity?

Large and crowded. India is a market of over 1.4 billion people, and Flipkart and Amazon already fight hard for it.

If the February 2026 framework becomes a signed deal, India’s lower tariffs on US industrial and farm goods will make US-made products cheaper to sell here.

How Can A US Company Enter India?

You have five practical routes: an employer of record (EOR), a wholly owned subsidiary, a branch or liaison office, a global capability center, or contractors through a contractor of record.

Your headcount plan and time horizon decide which one fits.

Timelines are indicative. In India, candidate notice periods of 30 to 90 days often matter more than the paperwork.

When Does An EOR Make More Sense Than A Subsidiary?

When you need people fast, plan fewer than a few dozen hires, or aren’t sure yet that India will stick.

The EOR becomes the legal employer. It runs payroll, PF, tax, and labor code compliance, while you direct the day-to-day work.

Compare the numbers in our EOR vs opening an entity cost comparison, or read EOR or subsidiary: which one to choose.

One detail US finance teams miss: EOR invoices to a US client can qualify as zero-rated GST exports when the export conditions are met.

Why Do Most US Companies Choose A Subsidiary Over A Branch?

Tax, mostly. An Indian subsidiary can opt for the 22% concessional rate, while a branch of a foreign company pays 35%, per the Finance Bill 2026 memorandum.

Let’s say your India operation makes a profit of ₹10 crore.

So the gap is small if you send every rupee home. The subsidiary wins when you reinvest profits in India.

Our guide on how to set up a subsidiary in India covers incorporation step by step. And these six things to know before forming a subsidiary cover the traps.

When Does A GCC Become The Right Move?

Once you’re past about 50 roles and the work is core to your product or operations. Below that, the fixed cost of leadership, real estate and compliance rarely pays back.

Many US firms bridge the gap with a build-operate-transfer contract, where a partner builds the centre and hands it over later.

Start with our GCC setup guide and the real cost of setting up a GCC in India.

Can You Hire Contractors In India Instead?

Yes, for genuine project work. But if a contractor works fixed hours under your managers on your core product, Indian courts may treat that person as an employee.

Read our guide to employee misclassification before you scale this route. Or use a contractor of record to handle contracts, invoices and tax.

What Changed in Indian Employment and Tax Law in 2025 and 2026?

Five changes hit US employers: the labor codes, their central rules, a higher EPF wage ceiling, a new Income-tax Act, and the DPDP Rules.

What Do The Four Labor Codes Change For You?

They replaced 29 central labor laws from 21 November 2025, per the PIB announcement. The central rules took effect on 8 May 2026, as EY’s alert notes.

These are the changes that touch US employers most:

• • Wages (basic pay, dearness allowance and retaining allowance) must make up at least 50% of total pay for PF, gratuity and other benefits.
  • Every employee must get a written appointment letter.
  • Fixed-term employees earn gratuity after one year instead of five.
  • Gig and platform workers come under social security schemes.
  • Employers must offer free annual health check-ups to workers aged 40 and above.

States are still notifying their own rules, so compliance can differ between Maharashtra and Karnataka. Our overview of labour laws in India tracks the detail.

How Does the 50% Wage Rule Raise Your Payroll Cost?

It raises every cost calculated on wages. Suppose you pay an engineer a CTC of ₹24 lakh, and your old structure set basic pay at 30%.

Inside a fixed CTC, that ₹80,677 comes out of the employee’s take-home. So decide early whether you hold the CTC or top it up.

Pay PF only on the statutory ceiling? Then the PF line doesn’t move. The gratuity line still does.

What Does The Higher EPF Wage Ceiling Mean For You?

More of your junior hires now fall under compulsory PF. From 17 September 2026, mandatory coverage rises from ₹15,000 to ₹25,000 of monthly wages, per All India Radio.

The maximum mandatory employer contribution rises from ₹1,800 to ₹3,000 a month for each covered employee.

What Does The Income-Tax Act 2025 Change For Your India Entity?

Mostly the paperwork, not the rates. The new Act replaced the 1961 law from 1 April 2026, with renumbered sections and a single “tax year” in place of the old previous-year and assessment-year split.

So update intercompany agreements, tax clauses and any contract that cites old section numbers.

When Do India’s Data Protection Rules Start To Bite?

By 13 May 2027 for most obligations. MeitY notified the DPDP Rules on 13 November 2025 with an 18-month runway, per S.S. Rana & Co.

Penalties run up to ₹250 crore per breach. And the rules cover the personal data of your Indian employees, not just your customers.

What Does It Cost a US Company To Employ Someone In India?

Salary, plus statutory costs, plus your EOR fee or entity overhead. Statutory costs add little for senior hires and more for junior ones.

Get a role-level estimate from the EOR cost calculator, or see how EOR pricing works. For pay floors by state, check India’s minimum wage in USD. Our guide to employee benefits in India covers the rest of the package.

Why Does a US National Cost More To Employ In India?

Because India and the US have no social security agreement. Under EPFO rules for international workers, a US citizen on your Indian payroll pays PF on full wages, with no ceiling.

They also can’t take that money out when they leave India. Without an agreement, the balance stays until age 58 or another permitted exit.

India signed exactly this kind of agreement with the UK in February 2026, per All India Radio. The US still has none. Running a UK arm too? See our UK companies in India guide.

Let’s say you second a US manager to India on ₹60 lakh a year, with wages at 50%.

That’s 10 times the employer cost. And if your American employee stays on a US payroll, US FICA usually continues as well.

Does the India-US DTAA Stop Double Taxation?

For income tax, largely yes. The India-US DTAA has been in force since 18 December 1990, per the Income Tax Department, and gives relief through tax credits and lower withholding rates.

It does not cover social security. That’s the PF gap above.

Watch permanent establishment too. If your India staff habitually negotiate or sign contracts for your US company, India can tax part of your US profits. Our guide on permanent establishment risk in India shows how to structure roles.

How Do You Set Up A Compliant India Team In Your First 90 Days?

Work through these steps in order:

1. 1. Pick your route using your headcount plan and time horizon.
   2. Pick your city. Bengaluru and Hyderabad lead for engineering, Pune and Chennai pair engineering with manufacturing, and Gurugram suits sales and finance.
   3. Set salary bands on the 50% wage rule before you make offers.
   4. Plan start dates around notice periods of 30 to 90 days.
   5. Issue appointment letters with IP assignment and confidentiality clauses written for Indian law.
   6. Register PF, ESIC, professional tax and shop-and-establishment licenses, or let your EOR hold them.
   7. Map DPDP obligations for employee data, including transfers to US systems.
   8. Brief your US tax team on PE, transfer pricing and the HIRE Act.

Our EOR compliance checklist goes deeper. And our guide to termination of employment in India covers the exit rules you’ll need later.

How Does Remunance Help US Companies Hire In India?

Remunance is a Pune-based employer of record that hires, pays and manages full-time employees in India for global companies. You get a compliant team without opening an entity.

We’ve done this for US clients. We helped a US company build an operations centre in India, and we helped first-time founders of an American architecture business set up their India team.

Start with our employer of record services. Move to our India subsidiary formation service when the headcount justifies it. Every contract, payslip and filing follows the four labour codes and the 2026 rules above.

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