Known for its strengths in technology, finance, pharmaceutical manufacturing, and healthcare, India’s vast talent pool and dynamic economy make it an attractive destination for companies seeking new opportunities in Asia. However, navigating the complexities of local labor laws, taxes, and compliance requirements can be overwhelming.
This is where an Employer of Record (EOR) can simplify the process and help you hire in India seamlessly, without setting up a legal entity. With a best-in-class EOR in place, coupled with G-P Gia™, our AI-based global HR compliance advisor, companies can leverage deep expertise in employment law, talent insights, and workflows to build and manage global teams anywhere.
From understanding India’s employment laws to the benefits of partnering with an EOR, here is everything you need to know about hiring in India.
Why are companies expanding to India?
India’s youthful population, diverse language skills, and proficiency in English make it a valuable market for companies looking to scale rapidly and build a global team.
India has several emerging talent hubs, each known for unique strengths and talent profiles, including:
- Bengaluru: Often referred to as the “Silicon Valley of India,” Bengaluru is a global hub for technology and software development.
- Mumbai: As the financial capital of India, Mumbai is home to leading talent in finance, media, and technology, making it a great operational hub for companies across different industries.
- Delhi NCR-National Capital Region: This large metro area has a wide talent base in IT, telecom, retail, and easy access to government infrastructure.
- Hyderabad: Known for its rapidly growing economy, Hyderabad is a key tech center, mainly for IT services and the pharmaceutical industry.
- Chennai: Chennai boasts a strong presence in the automotive, manufacturing, and technology sectors.
- Pune: Pune is one of India’s emerging tech hubs, with talent in engineering, finance, and IT services.
Navigating India’s employment laws
India’s labor regulations are complex and vary significantly by state, creating a challenging environment for companies. Here are some of the critical areas to consider:
- Minimum wage: India’s minimum wage laws vary by state, and wage levels are determined based on factors like job role, skill level, and geographic region.
- Working hours: The standard workweek in India is 48 hours, with overtime pay required for hours worked beyond this limit.
- Employee Provident Fund (EPF) and Employee State Insurance (ESI): Employers must contribute to EPF (retirement savings plan) and ESI (health insurance program for workers earning below a certain threshold).
- Gratuity: Employees who have worked for a company for five years or more are entitled to a gratuity payment as a form of severance.
- Worker classification: Properly classifying workers is essential. Hiring an employee as a contractor can lead to costly fines.
Keeping up with these regulations requires an in-depth knowledge of India’s labor landscape. However, an EOR takes on these administrative responsibilities, freeing your teams to focus on day-to-day operations.
Benefits of hiring in India
Hiring in India can drive innovation, expand global reach, and provide access to one of the world’s largest markets. Let’s explore other key benefits of hiring in India:
The critical role of an Employer of Record (EOR)
An Employer of Record (EOR) is a third-party organization that handles employment responsibilities on behalf of a company — managing everything from payroll and benefits to compliance with local labor laws. While companies maintain control over daily operations, the EOR is the legal employer and enables seamless global hiring without the hassle of entity setup.
This arrangement can be especially beneficial for companies looking to test new markets or scale quickly, as it bypasses the time and cost of establishing a subsidiary.
How an EOR assures compliance in India
One of the key advantages of partnering with an EOR in India is the assurance that your hiring practices will meet all federal and state requirements. Here’s how an EOR can help with compliance:
- Payroll and taxes: The EOR takes responsibility for calculating wages, withholding taxes, and making contributions to EPF, ESI, and other mandatory programs.
- Employment lifecycle management: From employment contracts to termination processes, the EOR ensures that all employment practices align with federal and state laws.
- Labor law oversight: India’s labor regulations evolve frequently. An EOR stays current on these changes, ensuring that your company remains compliant.
The process of hiring in India with an EOR
With an EOR, you can focus on your company’s strategic vision and core objectives while knowing that all aspects of compliance are taken care of. This is what the process of hiring in India with an EOR typically looks like:
- Recruitment and selection. Your company identifies and selects the best fit for the role. The EOR can assist with recruitment tools if needed.
- Employment contract drafting: The EOR drafts employment contracts and/or contractor agreements tailored to India’s labor law requirements.
- Onboarding. The EOR handles the administrative aspect of onboarding like benefits enrollment and payroll setup. This allows your company to focus on team integration and training for new hires.
- Payroll and benefits administration. The EOR ensures timely salary payments, tax withholdings, and statutory benefits.
- Ongoing compliance management. The EOR continues to manage HR, payroll, and compliance, allowing you to focus on scaling your business in India.
Benefits of using an EOR to hire in India
Partnering with an EOR to hire in India provides several key benefits:
- Time and cost savings: Establishing a legal entity in India can be time-consuming and expensive. With an EOR, you can bypass this requirement and start hiring in minutes.
- Simplified compliance: India’s employment laws vary across regions and are subject to frequent changes. An EOR manages these complexities, ensuring that you remain compliant with all applicable regulations.
- Access to local expertise: An EOR is familiar with India’s regulatory landscape, offering insights and guidance on best practices for managing your global workforce.
- Scalability: EOR solutions offer flexibility to expand or reduce your workforce as needed, allowing you to adapt quickly to dynamic market conditions across India.
What makes G-P the undisputed EOR industry leader?
Hiring in India presents a valuable opportunity for companies looking to expand their global footprint and operations, but also involves a complex regulatory environment.
As the recognized leader in global employment, we deliver industry-leading global employment products and EOR solutions backed by the largest team of HR, legal, and compliance experts, so you can hire, onboard, and manage global teams in 180+ countries – regardless of entity status.
Our customizable solutions offer:
- Unmatched compliance expertise
Our dedicated team of experts focuses on global compliance — including employment, tax, benefits, and local labor laws — so your teams don’t have to. - Best-in-class integrations
We partner with today’s most proven market leaders in HCM and payroll, so you will always have access to the industry’s most feature-rich and up-to-date solutions. - AI-enabled HR technology
G-P Gia™ combines over a decade of global employment expertise with cutting-edge AI technology to provide context-specific answers to your toughest HR questions in over 50 countries and all 50 U.S. states.
Gia not only provides context-specific guidance but also creates customizable contracts, templates, and toolkits, saving you the complexity and cost of working with multiple tools and advisors.
With Gia and our industry-leading suite of global employment products, we help companies of all sizes to build and manage global teams quickly and easily.
