Who the route is written for
The eight steps are written for a vehicle maker moving from imports to assembly to full manufacturing. A component or battery maker skips the import step and applies for the state package before investing; PLI-Auto is limited to its approved applicants. A maker with a land-border owner may use the 60-day route for advanced battery components. The authority responsible is shown after each step.
From imported cars to local manufacturing in eight steps
- Confirm ownership and FDI route. Vehicles and components are 100% automatic. Map beneficial owners: a land-border owner above 10%, or with control, needs government approval; up to 10% without control needs prior reporting. DPIIT; FIF portal. See FDI rules.
- Enter with imported vehicles. Press reports put import duty at 70%, or 110% above USD 40,000. From 15 July 2026, UK-built cars within CETA quotas pay 30–50%, falling to 10% by year five. Plan certification with a testing agency. Customs; ARAI, ICAT, NATRAX or GARC.
- Choose the state and apply early. Compare SGST refunds and capital subsidies. Apply before investing: Uttar Pradesh counts only projects with at least 80% of capital investment made after the policy’s effective date. State investment agency. See state incentives.
- Begin assembly and localise. Raise local content in line with the value-addition tests: the Phased Manufacturing Programme for PM E-DRIVE and, for PLI-Auto beneficiaries, at least 50% DVA. MHI; testing agencies.
- Certify value addition. PLI-Auto beneficiaries need DVA certification for each model or component variant before claiming; the SOP and the pliauto.in portal set the process. MHI; IFCI (project management agency).
- Register for EPR. Producers must meet scrapping targets under the End-of-Life Vehicles Rules 2025 for vehicles they put on the Indian market. MoEFCC.
- Claim incentives each year. PLI-Auto claims are paid in the year after each performance year: claims for FY2023-24 were paid in FY2024-25. Tamil Nadu pays its capital subsidy over up to 15 years. Annually; MHI; state agency.
- Export from the Indian base. From year six of the UK CETA, Indian-built electric, hybrid and hydrogen vehicles priced GBP 20,000–80,000 enter the UK duty-free within quota. From year 6 of CETA; customs; DGFT.
Before claims are made
Three conditions must be in place before any incentive is paid:
- DVA certificate per variant for PLI-Auto (step 5). Only products with at least 50% domestic value addition qualify; by 31 December 2025, 8 Champion OEMs held certificates for 94 variants and 10 Component Champions for 37.
- State application before investment (step 3). Under Uttar Pradesh’s rule, investment made before the policy date can disqualify the project.
- Phased Manufacturing Programme compliance for any vehicle claiming PM E-DRIVE demand incentives (step 4), with all claims filed by 31 December 2027.
For UK quota imports in step 2, the importer also needs a DGFT TRQ certificate (valid 12 months, not transferable) and a UK certificate of origin; only OEMs and their authorised dealers may apply.
Entry vehicles
Most investors use a private limited subsidiary; offices serve narrow aims. A company or LLP is an Indian resident entity. Branch, liaison and project offices are extensions of the foreign parent, opened through an authorised dealer bank under RBI rules.
| Vehicle | What it may do | Approval needed | Suits |
|---|---|---|---|
| Wholly owned subsidiary (private limited company) | Any lawful business within its objects and the FDI policy. At least 2 shareholders (up to 200) and 2 directors, one meeting the 182-day residence test. | None on the automatic route without a land-border owner; else government route. Incorporated with the Registrar through SPICe+. | Operating businesses that want full control and limited liability. |
| Joint venture company | As a subsidiary, with an Indian partner; caps and conditions apply to the total foreign stake. | As for the sector. Land-border investors taking up to 49% in a fast-track sector, where resident Indians keep majority ownership and control, have a 60-day decision target. | Capped sectors, or where a partner brings licences, land or customers. |
| Limited liability partnership (LLP) | Business with partnership-style governance and limited liability; at least 2 designated partners, one resident. LLP agreement filed within 30 days. | Automatic route only in sectors fully open under the automatic route with no FDI-linked performance conditions. | Service businesses in fully open sectors. |
| Branch office | Activities RBI permits for branches, such as export and import, consultancy and research on behalf of the parent. | Authorised dealer bank; parent needs a sound financial track record. RBI approval in specified cases, such as defence or telecom. | Serving Indian clients directly without a subsidiary. |
| Liaison office | Represents the parent in India; may not carry on business. Valid generally for three years. | Authorised dealer bank, with the same track-record test and RBI referral cases as a branch. | Market study and relationship building before committing capital. |
| Project office | Executes a specific contract in India; valid for the tenure of the project. | Authorised dealer bank under RBI’s project office rules. | Contractors delivering a defined Indian project. |
| No entity yet: distributor or employer of record | Sell through an Indian distributor or importer; engage staff through a third-party employer of record. | None for the foreign company itself. | Testing demand; review tax and contract exposure first. |
Sector-specific points: vehicle, component and EV manufacturing is 100% automatic, so a wholly owned subsidiary is the default for a manufacturing plant. A land-border investor in advanced battery components, magnets or electronic components can use the joint venture row with the 60-day decision target, provided resident Indians keep majority ownership and control; vehicles themselves are not on the fast-track list. The import-first stage in step 2 can run through an Indian distributor or importer before an entity exists. The generic comparison is at entry vehicles.
Incorporation: ten steps for a foreign-owned company
The sequence for a private limited subsidiary in an automatic-route sector. Times are shown only where a rule fixes them; state registrations depend on location and activity.
- Prepare and apostille parent documents. Constitutional documents, board resolution and identity papers of foreign subscribers and directors are notarised and apostilled or legalised. Parent company; notary; apostille authority.
- Obtain digital signatures and DINs. A digital signature certificate for at least one proposed director. Director identification numbers are applied for within the SPICe+ form. Certifying authority; MCA (SPICe+).
- Reserve the company name. Check the name against existing companies and registered trademarks, then reserve it through RUN or within SPICe+. MCA (RUN or SPICe+).
- File SPICe+ with the MoA, AoA and AGILE. One integrated filing covers incorporation, DINs, PAN and TAN. The linked AGILE form can also obtain GST, EPFO and ESIC registrations. Foreign subscribers attach a signed physical MoA and AoA. MCA Central Registration Centre.
- Receive the certificate of incorporation. The Central Registration Centre scrutinises the documents and may ask for changes. The CIN, PAN and TAN are allotted on incorporation. Registrar of Companies (CRC).
- Open a bank account and bring in capital. Receive share capital through an authorised dealer bank and allot shares within 60 days of receipt, priced at not less than fair value. Within 60 days; authorised dealer bank; board.
- Report the share issue (FC-GPR). File Form FC-GPR for shares issued to the foreign parent that count as FDI. Within 30 days of issue; RBI FIRMS portal.
- Declare commencement of business. Declare receipt of the subscription money and verify the registered office before starting business. Within 180 days; MCA.
- Register for GST and obtain an IEC. If not done through AGILE, apply for GST; low-risk applicants can opt for automated registration within three working days. Importers and exporters also need an Importer-Exporter Code. GST: 3 working days; GST portal; DGFT.
- First board meeting; staff registrations. Appoint the first auditor and open statutory registers. Obtain shops and establishments, professional tax, EPFO and ESIC registrations as applicable. Board; state labour department; EPFO; ESIC.
For a vehicle or component maker, the IEC in step 9 is needed for both the import stage and later exports, and the IEM is filed on NSWS once manufacturing is planned (see regulators and registrations). The generic incorporation page is at incorporation and the FEMA reporting cycle at FEMA compliance calendar.
What to check next
- Run the beneficial-ownership test before choosing the entry vehicle; it decides whether the 60-day joint venture route or the automatic route applies.
- File the state incentive application before any capital is committed.
- Book certification slots with ARAI, ICAT, NATRAX or GARC before the first import or launch.
- Map EPR scrapping targets under the End-of-Life Vehicles Rules 2025 from the first vehicle put on the market.
- Diary the FEMA, MCA and incentive claim dates in the FEMA compliance calendar.