Ok, so you have an Indian company interested in your foreign company for all the right reasons. The Indian company gets the market, has customers, understands the supply chain and can offer access to talent, manufacturing or distribution channels.
Now it’.......NOW its time to negotiate…talk business.
The foreign company has technology. The Indian company has market access. Lets talk about joint ventures. Lets discuss equity investment. Now you suddenly have a draft agreement with provisions dealing with exclusivity, intellectual property, pricing, control, confidentiality and dispute resolution.
What started out as a conversation on how to do business has now become a legal transaction.
Take the time BEFORE entering into negotiations to meet with Indian companies to understand commercial relationships. Distribution agreements are NOT foreign direct investments. Technology licenses are NOT joint ventures. Establishing an Indian subsidiary comes with a myriad of obligations different from hiring an Indian contractor to provide services.
BK Singh Advocate will normally start any meeting by understanding the deal. How will revenue come into India? Who will own the intellectual property? Will the foreign company own equity? Do the Indian partners own clear title to the IP licenses? Who has decision making authority? If there’s a dispute, where do you litigate? Based on the answers to these questions you will be able to better identify what laws will govern the transaction.
Indian companies and foreign investors can meet with Through Corporate Law Firm to gain a better understanding of the commercial aspects of cross border business arrangements, investment structures, contracts and compliances BEFORE you spend your money or share technology.
India welcomes foreign investments and wants to do business with you. However, depending on how you want to enter India, how much you want to invest, what conditions you would like to place on your investment and what your reporting requirements are differ depending on the structure of the investment. Even if you are investing in India for all the “RIGHT” commercial reasons, if the transaction does NOT meet the requirements of the Foreign Investment policy, the transaction may have to be re-structured.
We don’t want to scare you away from doing business in India. We just want you to know WHAT you are getting yourself into.
Why Do Foreign Collaborations Matter in India in 2026?
India continues to be one of the largest recipients of multinational businesses, manufacturers, technology companies, investors and other foreign service providers.
India’s Ministry of Commerce and Industry Department for Promotion of Industry and Internal Trade (“DPIIT”) Report on Foreign Direct Investment for Year 2025, released in July 2026, reinforces strong foreign investment into India and highlights recent amendments to regulations on foreign investment.
Below are some common examples of structures for doing business with or in India:
- A German manufacturer licenses its technology to an Indian manufacturer
- An American software company enters into a technology-sharing partnership with an Indian technology company
- A Singaporean investor takes equity in an Indian company
- A foreign brand franchises or appoints an Indian distributor
Every transaction has its own risk considerations. Structured poorly, a partnership can lead to conflicts regarding intellectual property, pricing, market territory, payment terms, product liability or dissociation.
There are also standalone regulatory risks. The commercial terms of the agreement may be agreeable to all parties, but the investment, remittance, ownership percentages and/or reporting requirements may be non-compliant with FEMA and India’s foreign investment regulations.
BK Singh Advocate typically views the contractual and regulatory side of a transaction as two pieces of the same puzzle. You cannot have a great contract if the underlying investment was structured in a way that violates foreign investment regulations.
Quick Facts for Foreign Companies Entering Indian Collaborations
- Foreign investments into India are regulated under FEMA and Foreign Exchange Management (Non- Debt Instruments) Rules, 2019 (as amended).
- Investments under automatic route and investments subject to Government approval in advance are permitted only upto specified limits. Limits vary based on the nature of business of the Indian company.
- Equity is not always required to establish certain commercial relationships.
- Foreign Companies registering themselves to open a place of business in India may be subject to additional compliances under the Companies Act, 2013.
- Material transactions resulting in significant acquisitions and joint ventures should be analyzed for compliance with the Competition Commission of India regulations.
- Technology, trademark and other intellectual property related rights, data and confidentiality agreements should be finalized through a separate agreement distinct from the ownership agreement.
What Should a Foreign Company Check Before Signing?
Good Diligence leads to Good Contracts. Do Your Homework on Your Indian Counterparty. If you are a foreign company or individual, you should understand who you are really doing business with in India.
Do not be impressed by slick PowerPoint presentations.
Documents to consider reviewing (at least) include:
- certificate of incorporation / memorandum of articles / article of association;
- shareholding/ownership structure;
- board resolutions/list of authorised signatories;
- key licenses/approvals from regulators;
- financial statements/major liabilities;
- litigation history/regulatory warnings;
- intellectual property owned;
- major contracts with customers/suppliers/others
- loans/guarantees/security interests
- related party transactions
- contracts with key employees
- existing exclusivity/non-compete obligations;
- data/software and other information necessary for the joint venture to work.
Do not spend a lot of money on due diligence.
If you are signing a small, limited scope distribution agreement, you will not need to dig as deep as you would before purchasing a majority shareholding in an Indian company. However, if the deal is significant, a diligent audit/due diligence/compliance review can uncover problems BEFORE the foreign investor hands over any money.
Usually BK Singh Advocate will recommend only digging up issues that can realistically affect the transaction you are considering rather than pulling documents for the sake of thoroughness.
When Should a Foreign Company Consult an Indian Corporate Lawyer?
Have legal review BEFORE you commit to inflexible commercial deals.
Triggers for legal review would be....
Request to invest equity. Transfer of proprietary technology / intellectual property. Foreign entrepreneurs should also demand legal review if the Indian party is insisting upon exclusivity, control provisions, personal guarantees, lengthy fixed term minimum purchase obligations or restrictions on competing activities. BK Singh Advocate can assist you if the parties are unclear whether the proposed relationship even mandates the creation of an Indian company, whether foreign investment even needs government approval or if the Indian company even has the licenses and permissions it claims.
Don't wait until tomorrow. If you've already publicly announced the commercial terms within your organization and are ready to sign the agreement first thing tomorrow morning then you waited too long to get legal review. You've engineered a crisis in negotiation instead of allowing sufficient time to plan.
How Can Corporate Law Firm Help With Foreign Collaborations?
At Corporate Lawyer we assist with joint ventures with foreign companies, cross border transactions, commercial contracts, investments agreements, due diligence and anything in between.
But first, we typically ask, why? What are you trying to commercially achieve?
Does the foreign company want into the Indian market?
Are they bringing tech? Capital?
Are they acquiring an existing business?
Are they appointing a distributor?
Structure can change depending on your response.
BK Singh Advocate can review your proposed joint venture agreement, Indian party documents, structure of ownership, foreign investment implications and key risk provisions prior to you agreeing to anything.
For business relationships that will last decades. General counsel services can help with contract management, compliance, changes in ownership and typical legal inquiries that occur.
The goal isn't to make sure every joint venture with a foreign company is profitable.
Commercial risk is inevitable.
What legal due diligence and legal structuring can do is allow both parties understand what the deal is. Including ownership, obligations, regulatory restraints and exit if the deal soured.
Frequently Asked Questions
1. Is it possible for a foreign company to enter into an agreement with an Indian company without making any equity investment?
Yes. Foreign collaboration could be in the form of a licensing, distribution, technology support, service, manufacturing or other commercial agreement without an equity investment being involved.
2. Is Government approval required for any foreign investment into India?
No. Foreign investment is allowed into certain sectors through the automatic route(i.e. subject to sectoral limits and compliance with certain conditions). Investments into India that do not meet these conditions require Government approval prior to investing. Current FDI policy is reviewed on a transaction by transaction basis.
3. What is the difference between forming a joint venture and entering into a distribution agreement?
A joint venture can take many forms but would usually involve some sort of shared ownership, control or business entity. A distribution agreement is usually just an agreement by one party to appoint another party to market or sell its products and does not imply any shared ownership between parties.
4. Can BK Singh Advocate help me with an international collaboration agreement?
Yes. BK Singh Advocate can help you with your cross border commercial agreements, investment structures, allocation of ownership, intellectual property rights, regulatory requirements and dispute resolution provisions tailored to suit your specific transaction.
5. Is it necessary for foreign companies to set up an Indian subsidiary to conduct business in India?
Not always. Whether it is more beneficial for a foreign company to operate in India through contractual arrangements, subsidiaries, branches or some other legally permissible manner for carrying on business in India will depend on the nature of the business activity, the regulatory requirements involved and commercial factors.
6. Will FEMA regulations apply if no shares are being transferred between parties?
FEMA may still apply where there is consideration involving payments to/ from India, royalty payments, bank guarantees, provision of security or any other foreign exchange transactions between the parties. Each situation would have to be assessed on its own facts.
7. Should IP be assigned to the Indian company?
Not necessarily. Foreign companies may simply license their IP rights to the Indian company. Consideration should be given to who will own the IP, how the IP can be used, improvements made to the IP, confidential information etc.
8. Can a foreign company own 100% of an Indian company?
Yes. Foreign investment of up to 100% is allowed into India depending on the industry, route of entry into India and conditions that may apply to that particular industry. Note that some industries are regulated and restricted.
9. Can an arbitration clause be used for disputes with Indian business partners?
Yes. Providing the parties have entered into a valid arbitration agreement. Consideration should be given to governing law, seat of the arbitration, forum, enforcement and specific facts of the transaction prior to agreeing to arbitration.
10. At what stage would I need to engage a Corporate Lawyer?
BK Singh Advocate should be contacted before you sign any agreement particularly if there are any concerns regarding Indian regulatory requirements or Indian ownership issues that need to be addressed.
Final Thoughts
Deal Structure. Legalisation need not be an afterthought to the commercial agreement entered into between an Indian company and its Foreign Partner.
Know your core transaction.
An equity investment, joint venture, licence, distributorship or technology transfer deal could give rise to numerous different agreements and a regulatory review process.
India’ foreign investment regime is also constantly changing. Sector specific regulations, beneficial ownership restrictions, competition law thresholds, corporate responsibilities and compliances are just a few requirements that need to be considered based on current laws prior to committing capital / equity.
Corporate Law Firm, in-house corporation with BK Singh Advocate can assist you with the Indian party, intended structure, draft agreements and review regulatory requirements prior to entering into a long term relationship.
A well drafted international agreement should fulfill the commercial intentions of the parties, not extend the life of the document.
