Establishing Your Sourcing Platform in India

Published: November 2014

In this issue of India Briefing, we highlight the advantages India possesses as a sourcing option and explore the choices available to foreign companies seeking to create a sourcing presence here. In addition, we examine the relevant procurement, procedural and tax duty concerns involved in sourcing from India, and conclude by investigating the importance of supplier due diligence – a process that, if not conducted correctly, can often prove the undoing of a sourcing venture.

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  • No. of Pages: 12 pages

In this issue:

  • An Introduction to Sourcing from India
  • Sourcing and Procurement: Key Considerations
  • Exporting from India: Procedures and Duties
  • Expert Commentary: Supplier Due Diligence 

Purchases commonly represent the largest part of a company’s spending. Cutting these costs is often unachievable within the restrictive boundaries of a domestic market, and for that reason global sourcing has become an integral part of almost every businesses’ operations. When done correctly, a company which sources its products is simultaneously able to reduce operational costs, enhance efficiency, stabilize its supply chain, reduce risk, and gain access to both a multi-skilled workforce and a new market.

As a sourcing destination, India is a country that has long been thought to hold huge promise. Its multi-skilled and low-cost labor force is one of the largest in the world, and the country’s high level of English fluency equips it with a distinct edge over some of its better established competitors. A complex regulatory framework and a perceived high level of risk has previously limited India’s ability to unlock its potential, but with the election of Narendra Modi and his BJP party as the country’s new government, India now looks perfectly positioned to challenge the world’s premier sourcing destinations.

In this issue of India Briefing, we highlight the advantages India possesses as a sourcing option and explore the choices available to foreign companies seeking to create a sourcing presence here. In addition, we examine the relevant procurement, procedural and tax duty concerns involved in sourcing from India, and conclude by investigating the importance of supplier due diligence – a process that, if not conducted correctly, can often prove the undoing of a sourcing venture.

For foreign companies selecting a country to begin global sourcing – as well as companies considering a change of location for their platform – India is an option that can no longer be ignored. As the country’s new government pushes ahead with structural and regulatory reforms that will further simplify the sourcing process, we hope that this issue of India Briefing Magazine will provide foreign firms with a comprehensive understanding of how to manage their sourcing operation in India.


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