India represents one of the largest and most dynamic growth opportunities in the global digital economy, with hundreds of millions of new consumers coming online. Amazon.in is a dominant force in this vast market. However, selling in India is not a simple cross-border exercise; it is a significant business undertaking governed by strict national regulations.
Crucial First Point: Due to India's Foreign Direct Investment (FDI) laws, foreign entities cannot directly sell products to Indian consumers on a marketplace like Amazon using an overseas FBA model. To sell on Amazon.in, you must establish a local Indian business entity.
This guide will walk you through this mandatory process and the realities of operating in one of the world's most complex and rewarding markets.
1. The "Indian Entity" Requirement: The Only Way to Sell
The core of India's FDI policy for e-commerce prohibits foreign companies from owning inventory and selling it directly to consumers online. Therefore, the only compliant way for a foreign brand to sell on Amazon.in is to create a local Indian company.
This Indian entity will:
- Be legally incorporated in India.
- Act as the registered seller on Amazon.in.
- Serve as the Importer of Record (IOR) for all goods brought into the country.
- Own the inventory in India before it is sold.
- Comply with all Indian tax and accounting laws.
This process is a significant legal and financial commitment, akin to a foreign direct investment project, not just an e-commerce expansion.
2. The Setup Process: Building Your Indian Company
Establishing a business in India involves several mandatory steps, which require professional assistance.
- Incorporate a Local Company: The most common structure is a Private Limited Company. This involves appointing directors (at least one of whom must be a resident of India), obtaining a registered office address, and filing for incorporation with the Ministry of Corporate Affairs (MCA).
- Obtain a PAN: The new company must apply for a Permanent Account Number (PAN) from the Indian Tax Department. This is the primary tax identification for the business.
- Register for GST: It is mandatory for all e-commerce sellers in India to register for the Goods and Services Tax (GST). Your new entity must obtain a GST Identification Number (GSTIN) before it can make any sales.
- Secure an IEC: To import goods into India, your company will need an Import Export Code (IEC) from the Directorate General of Foreign Trade.
- Open a Business Bank Account: The Indian entity must have a local bank account to manage finances.
This entire setup process is complex and requires deep local expertise. Sitruna has a network of trusted Indian corporate service providers, lawyers, and chartered accountants to guide you through every step of establishing your Indian entity correctly.
3. Logistics and Operations in India
Once your Indian company is established, you can begin operations.
- Importing and FBA: Your Indian entity will act as the IOR, importing goods from your parent company or factory. These goods must clear Indian customs, with all applicable duties paid. Once cleared, the inventory can be sent to Amazon India's vast FBA network, which is essential for reaching customers across the country's diverse geography.
- Pricing in INR (₹): All prices must be in Indian Rupees. The Indian market is extremely value-driven and price-sensitive. Your pricing strategy must be highly competitive.
4. Understanding the Indian Market
- A Mobile-First Nation: The vast majority of Indian consumers shop on their smartphones. A mobile-optimized experience is critical.
- The Importance of Festivals: The retail calendar is dominated by massive sales events around major festivals like Diwali (the biggest), Holi, and Dussehra. These periods drive a huge percentage of annual sales.
- Fierce Competition: The Indian e-commerce market is a battleground between Amazon and its main rival, Flipkart (owned by Walmart). This intense competition benefits consumers with low prices and aggressive promotions.
- Linguistic Diversity: While English is widely used for business, providing listings in major regional languages like Hindi can significantly increase your reach and connection with customers.
Useful Resources
A High-Effort, High-Reward Market
Selling on Amazon India is not a simple expansion—it is a major strategic commitment to establish a physical and legal presence in the country. The regulatory hurdles are significant, but for brands willing to make the long-term investment, the reward is access to one of the largest and fastest-growing consumer markets on Earth.
Thinking about the immense potential of the Indian market? This journey requires serious legal and financial planning. Schedule a discovery call with the Sitruna team at www.sitruna.com/meet to understand the commitment and get connected with our network of Indian corporate experts.
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