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Tariffs, Visas, and Market Access: The New Reality of Doing Business in India

The Changing Landscape of Doing Business in India

2025 is reshaping global business, and India is at the center of attention. Tariffs, visa challenges, and evolving trade policies are forcing companies to rethink how they operate. For foreign businesses, the question is no longer if to enter India — it’s how to do it efficiently and safely.

Despite uncertainties, India remains one of the world’s most promising markets. Its skilled workforce, expanding consumer base, and state-level incentives make it a hotspot for strategic growth. Companies that approach the market thoughtfully can navigate challenges and seize opportunities effectively.

Tariffs and Trade Policies: Managing Costs Smartly

Rising tariffs and changing trade rules are impacting costs for foreign companies. Import duties on goods, fluctuating exchange rates, and sector-specific policies require careful planning.

However, these factors don’t have to be barriers. Businesses that source locally, form strategic partnerships, or optimize supply chains can maintain profitability while doing business in India. Flexibility is key — adapting operations to local conditions ensures resilience and efficiency.

Visa Regulations: Hiring the Right Talent

Stricter visa rules, higher fees, and longer processing times are reshaping workforce strategies. Relocating staff has become more complicated and expensive, challenging traditional expansion plans.

The solution? Hiring locally. India offers a rich talent pool familiar with market dynamics. By building teams in India, companies bypass visa complications, gain local insights, and operate without unnecessary delays.

Accessing the Indian Market

India’s market is massive but complex. Regional regulations, compliance requirements, and infrastructure variations can be intimidating.

Yet, companies that navigate these considerations strategically gain a significant advantage. Efficient entry into India allows businesses to secure top talent, build brand presence, and establish operations before competitors. Proactive planning is critical to long-term success.

Compliance and Legal Navigation

Understanding labour laws, payroll rules, and tax regulations is essential for foreign companies. Missteps can lead to penalties or delays.

Partnering with local experts simplifies this process. Businesses can focus on core operations while professionals manage compliance, ensuring smooth hiring, payroll, and employee management.

Hiring Without a Legal Entity

Setting up a legal entity isn’t always necessary. Companies can leverage local partners or Employer of Record (EOR) services to employ staff legally.

Benefits include:

Quick onboarding without entity registration delays.
Full compliance with labour laws and payroll obligations.
Freedom to focus on strategy while administrative tasks are handled by experts.

For a deeper understanding, explore our full Employer of Record (EOR) guides

Turning Challenges into Opportunities

Tariffs, visas, and regulatory complexities may seem like hurdles, but they are opportunities for companies that plan proactively. Those who act decisively can:

Access the best talent efficiently.
Expand operations without unnecessary risk.
Establish a strong, competitive presence in India.

Strategic planning, combined with local expertise, allows businesses to transform potential obstacles into growth advantages.

Moving Forward Confidently

India remains open and full of potential. Businesses that hire locally, leverage EOR services, and plan strategically can continue doing business in India confidently.

At Team Management Services (TMS), we help foreign companies navigate tariffs, visas, and compliance while building and managing teams efficiently. Partnering with TMS ensures your business can focus on growth while we handle the complexities of entering and operating in the Indian market. Discover how we make expansion seamless, safe, and effective.

The 2026 picture: visa economics have hardened the case for hiring in India

Since this article was first published, the trends it described have accelerated sharply. The United States raised the cost of new H-1B petitions to USD 100,000 from late September 2025 and reweighted selection towards higher-paid roles — a structural change, not a fee tweak. Tariff measures on Indian goods have persisted through trade negotiations. The combined effect on workforce strategy has been unambiguous: rather than moving Indian talent to the work, global companies are moving the work to Indian talent.

The clearest evidence is the boom in global capability centres (GCCs). India now hosts well over a thousand GCCs employing millions of professionals, with dozens of new American-headquartered centres launched in 2025 alone and industry projections pointing to continued double-digit growth through 2026 and beyond. For roles that once justified a visa petition, the comparison now looks different: one year of the new H-1B fee alone exceeds the fully loaded annual cost of many senior technology hires in India.

Three routes into the Indian workforce — compared for 2026

The strategic question has shifted from "should we build in India" to "through which vehicle". The three realistic options:

Factor	Employer of Record (EOR)	Own entity / GCC	Independent contractors
Time to first hire	Days to weeks	Months (incorporation, registrations, bank accounts)	Days
Upfront investment	None beyond service fees	Significant — entity setup, premises, leadership	None
Compliance ownership	Carried by the EOR as legal employer	Fully yours, across central and state law	Nominally none — but misclassification risk sits with you
Suits	Testing the market, teams from 1 to ~50, speed-critical hiring	Long-term scale, IP-heavy operations, 100+ headcount	Short, genuinely independent engagements only
Exit complexity	Low — contractual	High — entity wind-down	Low, unless reclassified as employment

Many companies sequence these: enter through an EOR in India, validate the team and market, then graduate to their own entity once headcount justifies it — often transferring the EOR-employed team into the new entity with service continuity preserved. The contractor route deserves the most caution: India's enforcement climate around misclassification has tightened, and disguised employment converts saved costs into back-dated liability.

The regulatory baseline has changed too: the Labour Codes

Foreign employers evaluating India in 2026 face a materially different — and in most respects simpler — regulatory frame than the one this article originally described. India's four Labour Codes came into force on 21 November 2025, consolidating 29 legacy statutes. For a foreign employer the practical implications are threefold: written appointment letters are mandatory for every employee; the statutory definition of wages requires basic pay to form at least half of total remuneration, which shapes how offers should be structured from day one; and fixed-term employment is now a recognised category with benefit parity, useful for project-based market entry. State-level rules are still being finalised through 2026, so multi-state operations need location-wise tracking — all data on which is verified and date-stamped by the TMS compliance team. A partner handling statutory compliance end-to-end absorbs this complexity so the market-entry decision does not stall on regulatory uncertainty.

Frequently asked questions

How do the H-1B changes affect hiring strategy for India?

The USD 100,000 petition cost and wage-weighted selection make relocating mid-level Indian talent to the US economically unviable for most roles. The rational response, visible across 2025–26, is to keep those roles in India — via an EOR for speed or a GCC for scale — and reserve visa spend for genuinely US-critical positions.

Is an EOR still the fastest way to do business in India?

Yes. An EOR remains the only route that produces compliant Indian employees within days, with no entity, no registrations and no capital commitment. It also de-risks the decision: if the market test fails, exit is contractual rather than a corporate wind-down.

Should we set up a GCC or use an EOR first?

Headcount and horizon decide it. Below roughly fifty employees, or where the India plan is still being validated, EOR economics and flexibility usually win. A GCC pays off with committed scale, dedicated leadership and IP that must sit inside your own entity. Starting on EOR and migrating the team into a later GCC is a well-trodden path.

Do India's new labour codes make hiring harder for foreign companies?

On balance, no. Consolidation of 29 laws into four codes simplifies the framework, and formal recognition of fixed-term employment adds flexibility. The genuine new obligations — mandatory appointment letters and the reweighted wages definition — are absorbed automatically when hiring through an EOR that structures offers compliantly from the outset.

Evaluating India entry against the new tariff, visa and regulatory landscape? Talk to the TMS EOR team for a country-entry briefing and a costed hiring plan within 48 hours.

Tariffs, Visas, and Market Access: The New Reality of Doing Business in India