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India has long been a popular destination for companies around the world looking to hire overseas employees: A huge talent pool, English proficiency, strong technical expertise and lower hiring costs all contribute to its reputation as a prime destination for international expansion and hiring.
Read our comprehensive guide to find out everything you need to know about hiring employees in India.
1.412B (Labor Force 27.27 million)
New Delhi
English and French
Indian Rupee (INR)
2.256,59 USD (2021)
63rd in 2022
178 INR ($2.61)/Day 5340 INR ($65)/Month
Ranges between 2000 INR – 70000 INR/Month
12 working days annually
In 2022, India overtook the United Kingdom to be the fifth largest economy in the world. This is despite seeing significant declines in GDP (around 23.9%) due to the impacts of the COVID-19 pandemic between 2020 to 2021. For the 2022 financial year, India’s GDP increased 8.7%. For the year 2023, 4.7% has been forecast. With the world’s second largest population, India has a firm ground to conduct economic activities despite its developing country status.
Indian labor laws are also known as industrial relations. Although overall, Indian labor laws attempt to offer a certain level of protection to employees, this in practice can vary between states and the concurrent legal instruments in use that regulate labor issues at both the federal and state level. Currently, there are 44 labor laws consolidated within 4 legal codes including the Industrial Relations Code 2020, The Code on Social Security 2020, The Occupational Safety, Health and Working Conditions Code, 2020 and The Code on Wages 2019. These laws cover everything from the employee-employer associations, workplace health and safety requirements and employment standards. If you are looking to hire employees in India, it is important to understand the basic standards set out across these codes.
In 2024, businesses in India more than often follow the traditional hierarchal model and prefer the use of appropriate and associated formal titles when addressing each person. Major decisions for a company will always be conducted at the highest level.
Despite English not being a dominant language across the country, it is widely spoken for doing business, especially in foreign business endeavors. Business it is widely spoken. It is also common for Indians to shake their head from side to side when they agree with you during a meeting or in general conversation.
Greetings can include the term “Namaste”, traditional handshakes, or unique to the Indian culture, a gesture that involves pressing your palms together with your fingers pointed upwards, followed by a slight bow. In Indian culture, using the right hand for numerous activities, including business-orientated gestures such as receiving or handing a business card over, is mandatory and a sign of respect. Indians also place huge importance on building business and personal relationships.
Indians put a lot of emphasis on personal and business relationships, so word of mouth referrals are a most common recruitment method, outside of the newer online recruitment tools. In saying that, the recruitment pool in India is highly competitive with many candidates with top skills seeking jobs. To find top talent in India, there are a plethora of job sites if hiring from abroad that you can post your ad to, including LinkedIn, Naukri, Monster India and Indeed.
Depending on the seniority of the role and what industry will determine what is expected when interviewing candidates in India. However, it is common to have at least 1-2 interviews and some psychometric testing to narrow down candidates for a final interview. Candidates may have past experiences with harsh interview styles from previous roles they have gone for or been offered by traditional Indian companies. Due to this, Indian candidates are usually well prepared for interviews and take them seriously to try and avoid feeling uncomfortable or feeling inadequate during an interview.
You can ask a candidates previous salary during the recruitment process in India as there is not law forbidding it. On the other side of that though, candidates do not have to answer either.
Typically when a candidate is changing jobs, a 10-20% salary increase is expected. This will vary though, depending on the type of work and skillset a candidate has. In demand skills can see higher salary jumps when changing jobs.
India is overhauling their onboarding processes by introducing more effective onboarding processes to ensure lower turn-over rates and to ease the new employee into the company after their (usually) gruelling interview process. The process can typically last anywhere from a few weeks to a few months depending on a candidates training needs and job-role level. It begins formally on the offer of employment.
Generally, it is uncommon for a new employee to negotiate an offer once it is received. It is also a common expectation of employers of a prospective employee for them to acknowledge, accept and sign the offer as soon as possible. Once an offer is accepted, the employee will be given information in terms of an office tour, links to any training or access to any official working systems. When an employee comes in for their first day, HR will get the employee to sign off on any employment forms required to be submitted and go through company policies relevant to their position.
Indian companies embrace some of the more common global remote working tools that are highly used currently and popular including Slack, Skype, Zoom, Join.me, Base Camp and Asana.
There are three statutory national holidays in India, where all organizations must remain closed. These holidays are:
| Date | Holiday name |
|---|---|
| 1 Jan., 2024 | New Year’s Day |
| 26 Jan., 2024 | Republic Day |
| 25 Mar., 2024 | Holi |
| 29 Mar., 2024 | Good Friday |
| 21 Apr., 2024 | Ambedkar Jayanti |
| 10-11 Apr., 2024 | Ramzan ID |
| 01 May, 2024 | Maharashtra Day |
| 15 Aug., 2024 | Independence Day |
| 26 Aug., 2024 | Janmashtami |
| 07 Sep., 2024 | Ganesh Chaturthi |
| 02 Oct., 2024 | Gandhi Jayanti’s Birthday |
| 12 Oct., 2024 | Dussehra |
| 31 Oct., 2024 | Diwali |
| 25 Dec., 2024 | Christmas Day |
Unlike other countries, If a public holiday falls on a weekend, the holiday does not move over to the next working day.
Salary increases vary each year in India but typically an increase of between 8% to 11% is standard. In 2022, salaries are expected to increase by more than 9%, especially across the technology, retail and consumer products sector. In 2023, a 10.4% salary increase is forecasted.
Hire borderless talent with Horizons
Your business can easily hire employees in India without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
The main thing to know about hiring employees in India, is that you must have a legal entity set up in India, or use a compliant alternative, such as an India Employer of Record solution.
Hiring freelancers or contractors in India can be a good option for short-term or project-based work, but it is important in doing so to ensure full compliance with independent contractor rules.
There are two caveats to hiring foreigners in India, this is the abovementioned need to have your own legal entity set up in India, and that the foreigner is on the appropriate working visa and a legal resident in India. If you need to send any of your current employees to work in India, you can use the support of an EOR to help get your employee set up and ensure you meet all your obligations under Indian labor law.
Foreign entities that want to have operations out of India or legally hire employees in India must have a legal entity set up in the form of either a subsidiary company, branch or a wholly owned subsidiary company.
To open a branch offices, you’ll need an Indian resident responsible for all legal filings. Branch offices have limited working capabilities in India, but can act as a representative for a foreign parent company and conduct the same activities as the foreign parent company.
The processes and requirements to open either a subsidiary company or wholly-owned subsidiary company are different.
You can easily hire employees in India if you have a subsidiary or branch set up. You can also use the support of a global PEO/EOR such as Horizons to hire local Indian employees and get them to take over the management and payroll requirements of your Indian employees.
Holiday Schedule in India [2024]
