LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

Companies that employ local or foreign staff in India must contend with complex – often overlapping – employment laws and regulations

Any foreign company looking at establishing a presence in India will inevitably be confronted with issues relating to human resources, labour and employment laws. To understand these laws, it is important to bear in mind that much of the country’s labour-related legislation was passed before India gained independence. The statutes deal primarily with working conditions, general welfare, remuneration, financial security and termination procedures.

Under the constitution of India, both the central and state governments can pass legislation in these cases. However, certain matters must be reserved exclusively for the legislative authority of the central government. The consequence of this decentralization is that various laws co-exist at the federal, state and municipal levels making compliance a difficult task. The lack of a standardized law to regulate employment terms and conditions means foreign entities must do significant groundwork in order to establish which laws apply to their companies and their employees. Factors including the nature of a company’s activities, an employee’s role and responsibilities, the number of employees in an organization and each employee’s salary must be taken into consideration.

Establishing a business presence

Foreign investment in India continues to be regulated and restricted in some sectors. Exchange controls exist and apply to any remittance of foreign exchange into or out of the country. Broadly speaking, most activities are covered under the “automatic approval route” or the “prior approval route”. In the case of the former, foreign investors can proceed to establish a business presence and are merely required to inform the Indian government of their activities within a prescribed time. In terms of the latter, prior permission from the Indian government is necessary before certain proposed activities can be undertaken. Foreign investment policies outline the industrial sectors that qualify for automatic approval and those that require prior approval, so companies may be aware in advance of potential regulatory restrictions to their businesses.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Shalini Agarwal is a partner at ALMT Legal and is based in the firm’s London office. She can be contacted at sagarwal@almtlegal.com.

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link