Choosing how to enter India is a decision about what you are willing to commit, control and pay for. An Australian SME can sell through a distributor, work through a partner, open a liaison presence, or establish an Indian entity. Each route locks in a different mix of commitment, control and overhead, and each is reversible at a different cost.
Why the route shapes everything else
The route decides who contracts with the Indian customer, who carries customs and compliance work, and how much fixed cost sits on your business before revenue starts. It also decides whether you can support the paperwork needed for tariff treatment under the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA).
AI-ECTA came into force in December 2022. DFAT states that from 29 December 2022 more than 85 per cent of Australian goods exports by value to India were tariff free, with a further 5 percentage points to be eliminated or reduced on full implementation by 2032, and that high tariffs were substantially reduced on a range of agricultural products. DFAT also states that 100 per cent of Australian imports from India are now tariff permitted to enter Australia duty free. Those outcomes depend on your goods qualifying, so the entry route has to be able to carry the evidence.
Austrade's Australia-India Business Exchange (AIBX) provides access to insights and opportunities, introductions and connections in India, pathways to commercial partnerships, and access to Austrade advisers in major cities across India. Austrade lists priority sectors including agrifood, defence capability, education and skills, green economy, and critical and enabling technologies including health.
Route 1: Distributor — lowest commitment, lowest control
A distributor buys or resells your product and usually holds local inventory and the customer relationship. You commit to supply, margin or marketing support and often some exclusivity; control is limited because the distributor typically sets resale pricing and owns day-to-day customer contact; overhead is low because you avoid a local payroll, office and statutory presence.
The commitment is not zero. DFAT states that only goods that originate in Australia or India are eligible for ECTA preferential treatment, so you still need the correct HS code, confirmation of India's tariff schedule treatment, evidence of origin, and a Certificate of Origin. Verify who handles import clearance, local taxes and product approvals, and what happens to stock and customer data if the arrangement ends.
Route 2: Partner or joint delivery — shared commitment, shared control
This route covers commercial partnerships, joint delivery and, where suitable, a joint venture. You commit more than with a distributor — shared branding, staff time and joint service delivery — control is shared through joint decisions, and overhead is moderate once you add partner management, travel and the legal work to document the arrangement.
Austrade supports this route through AIBX's pathways to commercial partnerships. The AIBX page names the Australia-India Future Skills Initiative, which helps match Australian training providers with emerging skills-training opportunities in India, and the Australia-India Innovation Network, which supports Australian technology companies to access customers, partners and investors in India's innovation ecosystem. Verify intellectual property ownership, who bears regulatory approvals, how revenue is shared, and the exit terms.
Route 3: Liaison office — moderate commitment, high control of representation
A liaison presence represents the Australian business in market, coordinates distributors or partners and builds relationships. You commit a local presence, staff or secondees and local registration; control is high over brand, partner and market activity even if sales are still contracted from Australia; overhead is moderate once office, staff and local compliance are added.
Austrade's AIBX gives access to advisers in major cities across India, and the AIBX page lists india@austrade.gov.au for specialists who can advise on the opportunities and challenges of doing business in India. Confirm what activities a liaison office is permitted to carry out under current Indian rules — including whether it can invoice, hold inventory or earn local revenue — because that determines whether you still need a distributor or partner to trade.
Route 4: Indian entity — highest commitment, highest control
Establishing or acquiring an Indian entity means operating as a local company. You commit local directors and staff, statutory accounts, tax registrations and ongoing corporate compliance; control is highest because you own invoicing, pricing, customer data and hiring; overhead is highest because payroll, office, professional fees and compliance costs sit on your business whether or not revenue follows.
SMEs usually take this step when an Indian customer or tender requires a local contracting party, or when service and support must be delivered inside India. Confirm current Indian company registration, foreign investment and tax requirements with Indian authorities and your own professional advisers before committing.
What ECTA requires whatever route you choose
DFAT sets out four steps. First, classify the goods by HS code, using DFAT's FTA Portal (ftaportal.dfat.gov.au); for exports to India, DFAT notes India's Central Board of Indirect Taxes and Customs database (cbic.gov.in) can be searched by product name, and Australian importers can use the Australian Border Force working tariff. Second, understand the tariff treatment: India's schedule ranges from immediate elimination on entry into force to staged elimination over up to 10 years, with categories for reduced, conditional, tariff rate quota and excluded lines; Australia's schedule uses 'A' for immediate elimination and 'B5' for elimination over five equal annual instalments, with B5 goods becoming tariff free from 1 January 2026. Third, meet the rules of origin: a good qualifies if wholly obtained or produced in Australia and/or India, produced there from originating materials, or made there from non-originating inputs that satisfy the applicable Product Specific Rule, with methods including change in tariff classification, qualifying value content or a product specific process. Fourth, obtain certification — preferential claims must be accompanied by documentation including a Certificate of Origin, and advance rulings on HS code, valuation or origin are available on request.
If your supply chain cannot evidence origin, the preferential rate is not available and the goods may face the most favoured nation rate instead.
Comparing the four routes
| Route | Commitment | Control | Overhead |
|---|---|---|---|
| Distributor | Supply and margin support; possible exclusivity | Low — distributor holds pricing and customer contact | Low — little or no fixed India cost |
| Partner / joint delivery | Shared brand, staff time, joint delivery | Shared — joint decisions | Moderate — partner management, travel, legal costs |
| Liaison office | Local presence, staff, registration | High over representation and coordination | Moderate — office, staff, local compliance |
| Indian entity | Local company, directors, staff, full compliance | Highest — pricing, invoicing, data, hiring | Highest — payroll, office, professional and statutory costs |
Treat this as a decision framework, not a cost quote.
Questions to verify before you commit
- What is my product's HS code, and what does India's ECTA schedule say today?
- Can my supply chain evidence Australian origin, or do I need a Product Specific Rule or advance ruling?
- Does my target customer require a local contracting party?
- Who handles customs clearance, local taxes and product approvals in each route?
- What is my exit if the route underperforms?
- Have I contacted Austrade's India team and verified current Indian regulatory requirements?
Your next step
Start with the lowest-commitment route that still meets your customer's requirements, then add commitment only when revenue justifies the overhead.
- Confirm the HS code and ECTA treatment using DFAT's FTA Portal, and check India's treatment through CBIC; seek an advance ruling if classification, valuation or origin is uncertain.
- Email the Austrade India team at india@austrade.gov.au for introductions and advice on doing business in India.
- Shortlist one route from the table, write down the commitments you are accepting, and test them against your first Indian opportunity before signing.
General information only
This article is general information about market entry routes for Australian businesses. It is not legal, tax, migration, credit or financial advice, and it does not promise commercial outcomes, approvals, savings or returns. Indian company, tax, foreign investment and product approval rules are not set out here and change over time; verify current requirements with Indian authorities, Austrade and your own professional advisers. Australian Asia is an independent information publisher, not a lender, broker, government body, regulator or comparison panel.