Human Resources

One of India’s advantages as a business location is the availability of a large base of skilled manpower in industry and service sectors. This advantage is most visible in knowledge-based sectors such as information technology, medicine and pharmaceuticals. Conversance in English is an additional advantage in services, marketing and communication- oriented industries, especially in the IT-enabled service sector. The availability of skilled and suitable personnel largely depends on the industry concerned. There is considerable turnover in some sectors, especially in the IT sector.

The assumption of India being a low-cost location within Asia is not always correct: Indian costs in service sectors; marketing and financial professions are often higher than many Asian countries, and are almost at the same levels as in East Europe. Labour costs too, are low only in nominal value; adjusting for productivity Indian manufacturing wages are higher than many Asian countries. Trade unionism and political interference have a considerable influence on work-force rationalization, layoffs, closure and restructuring. Finding personnel for start-ups is most conveniently done through manpower placement firms and head-hunters, and several international firms have a presence in India. There is also an increasing trend in the employment of expatriates, even in entirely Indian owned companies.

Corporate Remuneration structures (median)

Appointment of Expatriates)
Foreign nationals are allowed, in principle, to be employed in India either on a short duration or in regular employment on a non-permanent basis, for periods usually up to three years.
The basic requirements are:

• a) A valid business visa/working permit
• b) Prior approval by the Reserve Bank of India, for repatriation facilities.
• c) Permission from the Ministry of Home Affairs, for extended stay in India (exceeding three months)
• d) Permission from the Dept of Company Affairs for appointment of an Expatriate as Whole time Director if he was not resident in India during the past twelve months
• e) Clearance from the Dept of Company Affairs for managerial remuneration to the Managing or Whole time Director, in excess of specified norms

Foreign nationals in regular employment of Indian Companies (including joint ventures) can remit up to 75% of their monthly earnings abroad to meet their overseas expenses or maintain the family etc, after payment of any taxes in India. Retirement facilities to foreigners allow capital repatriation up to Rs 1 million (Euro 16,129), besides all savings generated from bonafide income, without any restrictions.

While there is no official confirmation, since 2009, there has been a tightening of regulations for the issue of business visas, Tourist visas are not allowed to be used for the purposes of conducting business, and the Indian government has instituted appropriate procedures to regulate the issue of business visas, which are initially issued for not more than six months. Business visas are issued more easily to foreigners that are Directors in Indian companies or are employees of foreign companies already having business in India.

Outsourcing: Increasingly, several functions such as payroll, public relations and advertising, even customer management are being outsourced in India. As this attracts the provisions of contract labour regulations, the scope and nature of contract employments is being redefined. With major changes expected in the Contract Labour Act, outsourcing will only increase in the future, making steady and permanent jobs a distant memory from the past.