PREFACE
India is a highly diverse country - in languages, religions, traditions, cuisine, and demographics. The country is divided into 28 states and 8 union territories. Each state and union territory has its own distinct language, culture, and administrative set-up. There are 22 scheduled languages, 120 major languages, and 1,600 minor languages spoken across the country. India has a total population of nearly 1.484 billion, making India the world's most populous country with a population density of approximately 492 people per km². The country has a young demography with over half of India's population being under the age of 30; only 7% are 65 years or older. The median age is about 28.7 years.
India is predominantly Hindu (about 80%) yet has the world's second-largest Muslim population (14.2%), as well as significant Christian, Sikh, Buddhist, and Jain communities. There are hundreds of ethnic groups, each with distinct traditions, dress, and food habits. Practices, festivals, and cuisines vary significantly between regions.
As of 2025, India has around 65 metropolitan cities, which are major urban centers with populations over 1 million. These include Mumbai, Delhi, Chennai, Bangalore, Hyderabad, Ahmedabad, and Pune. India has about 12 major ports, with key ones being Mumbai, Chennai, Kolkata, Visakhapatnam, and Kochi. Additionally, there are over 200 minor and intermediate ports spread across the coast. India has around 135 operational airports as of 2025, including major international hubs in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, and others.
India has one of the world's largest railway networks. The Indian Railways operates over 68,000 route kilometers with more than 7,000 stations, connecting virtually every part of the country.
This resource is designed to help foreign investors, entrepreneurs, and multinational organizations navigate the key legal and regulatory considerations essential for establishing and operating a business in India's dynamic market. Whether you are new to India or seeking to expand your operations, this FAQ aims to clarify the complexities of India's regulatory environment and empower you with practical insights for informed decision-making.
The questions in the FAQ are arranged topically as follows:
- Navigating entry routes.
- Understanding the corporate structure of a limited company and a limited partnership.
- Foreign direct investment into India.
- Introduction to M&A routes.
- Employment: Law and Practice.
- Laws on Data Privacy.
- Overview of Intellectual Property Right Protection in India.
- Introduction to Anti-trust laws.
Snapshot of the Indian Economy
India is one of the fastest-growing economies globally, with a GDP growth of around 6.2% in the fiscal year ending March 2025. In 2025, India became the world's 4th largest economy, surpassing Japan in nominal terms. Given its heavy manufacturing history, India attracts substantial domestic and foreign investments due to a large skilled workforce, a massive consumer base, improved ease of doing business, and a stable political environment. Policy reforms and government incentives, such as single window clearance and relaxed FDI norms have eased doing business in India.
The top Indian states receiving the most Foreign Direct Investment (FDI) in recent years are Maharashtra, Karnataka, Gujarat, Delhi, and Tamil Nadu. These five states dominate India's FDI landscape, collectively accounting for the majority of inbound foreign investment.
- Maharashtra: The top destination for FDI. The clear leader by GDP and FDI inflows, with major hubs in Mumbai and Pune. It offers advanced infrastructure, a large skilled workforce, and a diversified industrial base—key for automotive, electronics, pharmaceuticals, and IT manufacturing. Maharashtra hosts many global investors due to pro-business policies and its status as India's commercial heart.
- Karnataka: The Silicon Valley of India. It has a global reputation as an IT and innovation hub, thriving startup ecosystem, and strong industrial corridors for aerospace, biotechnology, and electronics. It has received about 15-20% of India's total FDI. Bengaluru anchors a robust ecosystem including aerospace PSUs and foreign R&D centers. The state's high innovation profile and skilled talent make it especially attractive for foreign high-tech and specialized manufacturing investments
- Gujarat: Third highest FDI destination of India. Gujarat attracts investment through its advanced industrial parks, ports and proactive state government. The GIFT City is also located in Gujarat.
- Delhi: Fourth highest FDI destination of India. The National Capital Region's business climate, world-class infrastructure, and policy incentives support strong inflows into IT-BPM, health care, and manufacturing. This region is a vital automotive and electronics hub, with major export-oriented industrial estates. The NCR offers foreign companies' proximity to India's largest consumer market and advanced infrastructure for both production and warehousing.
- Tamil Nadu: Fifth highest FDI destination of India. Renowned for its strong manufacturing sector across automobiles, electronics, textiles, and engineering. Chennai and adjacent industrial corridors host several foreign automotive and electronics giants (e.g., Foxconn, Tata). With the largest number of factories in India, Tamil Nadu benefits from three major ports, a robust logistics backbone, and proactive state incentives—making it a top choice for global manufacturers.
Indian Regulatory Landscape
India's regulatory framework is characterized by a quasi-federal system featuring both central (Union) and state-level regulations. The Constitution of India is the source of legal authority and empowers Parliament and the Legislatures of States and Union Territories to enact statutes. There is also a vast body of laws known as subordinate legislation in the form of rules, regulations, and by-laws made by Central and State Governments and local authorities like Municipal Corporations, Municipalities, Gram Panchayats and other local bodies. This subordinate legislation is made under the authority conferred or delegated either by Parliament or the concerned Legislature of the State or Union Territory. The decisions of the Supreme Court are binding on all Courts within the territory of India.
Enactment Of Laws
Article 246 of the Constitution addresses the distribution of legislative powers between the Union legislature (Parliament) and state legislatures. The Seventh Schedule of the Constitution contains three lists: a Union List, a State List, and a Concurrent List. These lists set out the various subjects on which Parliament and State Legislatures are empowered to make laws.
The Indian Parliament has the power to make laws on matters enumerated in the Union List. State Legislatures have the power to make laws on matters enumerated in the State List. Both the Centre and States have the power to legislate on matters enumerated in the Concurrent List, with the laws made by the Parliament prevailing over any repugnancy or conflict between the laws made by the Parliament and the States. Parliament has power to make laws on matters not included in the State List or the Concurrent List.
All laws passed by the Parliament shall come into force only on receiving the assent of the President and in the case of state laws, the laws passed by the state legislature shall come into force on receiving the assent of the Governor.
Applicability Of Laws
Laws made by Parliament may extend throughout or in any part of the territory of India and those made by State Legislatures generally apply only within the territory of the State concerned. Hence, variations are likely to exist from State to State in provisions of law relating to matters falling in the State and Concurrent Lists.
Judiciary
One of the unique features of the Indian Constitution is that, notwithstanding the adoption of a federal system and existence of Union and State Acts in their respective spheres, it provides for a single integrated system of courts to administer both Union and State laws. At the apex of the entire judicial system is the Supreme Court of India followed by the High Courts in each State or group of States. Under the administration of each High Court are the District Courts. Village/Panchayat Courts also function in some States under various names like Nyaya Panchayat, Gram Nyayalaya, Gram Kachheri to decide civil and criminal disputes of petty and local nature. Each State is divided into judicial districts presided over by a District and Sessions Judge, which is the principal civil court of original jurisdiction and can try all offences including those punishable with death. The District and Sessions Judge is the highest judicial authority in a district. District Courts have courts of civil jurisdiction, presided over by judges known in different States as Munsifs, Sub-Judges, Civil Judges. Similarly, the classes of criminal courts include the Chief Judicial Magistrates and Judicial Magistrates of First and Second Class.
Regulatory Governance
Independent regulators govern large sectors of the Indian economy from foreign investment, tax, financial markets, anti-trust, etc. and the regulations, rules, guidelines and notifications issued by these regulators form an important part of the institution of governance in India and are key to the understanding of the legal framework for doing business in India. The list of key financial and tax regulators is set out below:
Tax regulators
- Central Board of Indirect Taxes & Customs
- Central Board of Direct Taxes
Foreign direct investment
- Reserve Bank of India
- Directorate General of Foreign Trade
- Ministry of Finance
- Ministry of Commerce
- Department for Promotion of Industry and Internal Trade
Company or LLP compliance
- Director General of Corporate Affairs
- Registrar of Companies
Securities laws
- Securities and Exchange Board of India
AML
- Directorate of Revenue Intelligence
- Directorate of Enforcement
- Central Bureau of Investigation
- Financial Intelligence Unit-India
- Serious Fraud Investigation Office
Anti-trust
- Competition Commission of India
Insolvency and Winding up
- Insolvency and Bankruptcy Board of India
We now present this resource to enable the reader to have an overview of the regulatory landscape for doing business in India.
To view the full pdf, click here.
Originally published on 30 September, 2025
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
