Foreign business is booming in India

What you probably already know: India is a hot destination for foreign businesses looking to relocate or expand operations. The country had approximately 1,800 offshore corporate offices in 2024, most of which were owned by American companies with global reach. Amazon, Google, and Coca-Cola are a few of the biggest players leading offshore expansion in India. Walmart is particularly aggressive in its pursuit of suppliers in the country, running a development program that’s helped over 50,000 businesses in India grow and integrate into local supply chains. The retail giant plans to source $10 billion in India-manufactured goods annually by 2027.

Why? Many factors contribute to India’s increasing attractiveness to foreign multinational businesses. For starters, India has a massive pool of skilled labor, particularly in technology and engineering (1.5 million Indians graduate with engineering degrees annually). There are nearly 2 million people in India working for offshore companies — a figure that’s expected to creep closer to 3 million by 2030, according to The New York Times. That’s good news for a country that needs 10 million new jobs every year to sustain an average gross value added growth of 6.5%. American manufacturers are also diversifying their sourcing strategies and scaling back reliance on China-made goods. The U.S. increased imports from India by 44% between 2019 and 2022, while imports from China fell by 10% during the same timeframe.

What it means: Offshore businesses are leading India’s commercial real estate industry, especially in big cities like Bengaluru, with 339 foreign companies registering in the country within the last five years. Salaries are also on the rise, though the cost of labor is still significantly cheaper than in the U.S., with Indian wages about 25-33% of their American equivalent. The office atmosphere has also dramatically shifted away from the “Severance”-esque call centers of the 1990s; today, many offices embrace Silicon Valley style — think ergonomic layouts and recreation spaces. However, these companies must contend with unique challenges for women employees, including safety issues. Starbucks, for example, has a series of women-only stores aimed at protecting its female employees.

What happens now? Setting up large branches in India gives American businesses access to the country’s enormous consumer market. It’s also a strategic move to capitalize on the world’s fastest-growing economy that’s projected to move into third place behind China and the U.S. by 2035. Still, data released by Indian officials suggests the number of foreign companies registering in the country has declined year-over-year, dropping from 90 new registrations in 2020 to 53 in 2024. The NYT’s report optimistically suggests 2025 will break the trend with the addition of 100 new offices, despite President Trump’s plans to fix the United States’ $46 billion trade deficit with India through tariffs and deportations. This week, a U.S. delegation arrived in Delhi to begin bilateral trade negotiations;.Trump has set an April 2 deadline for levying “reciprocal” tariffs on India, among other nations.