Engage In India

Table of Contents

About India

Capital City

New Delhi

Population

As of March 2024, the estimated population of India is 1.4 billion.

Currency

The currency in India is the Indian Ruppe (INR). The currency symbol is ₹.

Exchange Rate Calculator

USD

Overview

India, officially known as the Republic of India, is a diverse and vibrant country situated in South Asia. With a population of over 1.4 billion people, India is the most populous country in the world. It shares its borders with several neighboring countries, including Pakistan to the northwest, China, Nepal, and Bhutan to the north, and Bangladesh and Myanmar to the east. Known for its rich history, cultural heritage, and geographical diversity, India is a land of contrasts that stretches from the snowy peaks of the Himalayas to the sandy beaches of the Indian Ocean. The country is a federal parliamentary constitutional republic, with New Delhi serving as its capital city. India is home to a multitude of languages, religions, and ethnicities, making it one of the most diverse nations on Earth. It is known for its contributions to literature, spirituality, art, and science throughout history. From the iconic Taj Mahal to the bustling streets of Mumbai, India offers travelers a variety of experiences and an opportunity to explore its ancient traditions, modern cities, and breathtaking natural landscapes.

Employment Relationship

Permanent Employment

Permanent employees are those hired for any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, with no fixed termination date. Employees in industrial establishments become permanent after their probation of 6 months. Permanent employees enjoy statutory benefits such as paid annual leave, sick leave, gratuity pay, provident fund, compulsory health insurance. 

Fixed-Term or Specific-Purpose Contracts

In India, fixed-term employees are persons who are engaged based on a written contract of employment for a fixed period, provided that they receive similar working conditions and benefits as those by a permanent employee and receive statutory benefits proportionately according to the period of service rendered by them. Fixed-term contracts are allowed to be used in all industries. The maximum term under which this designation may run is seven years. The laws in India aim to prevent fixed-term contracts from replacing positions that are typically permanent or to avoid statutory provisions for permanent employees.

Temporary Employment Contratcs

In India, a temporary worker as a worker who has been engaged for work that is of an essentially temporary nature likely to be finished within a limited period. Most temporary contracts are handled through temporary work agencies (TWAs). TWAs are loosely regulated by Indian law, but temporary contract employees are protected under The Contract Labour (Regulation and Abolition) Act of 1970. Specifically, the Act regulates: Non-seasonal establishments that employ twenty or more workmen as contract labor TWAs who employed or have employed twenty or more workmen on any day of the preceding twelve months Temporary agency workers are not required to receive the same statutory benefits as regular employees. However, the Contract Labour Act empowers courts to determine when an employer has misclassified an employee as a TWA worker, by examining, among other factors, the worker's length of service.

Probationary Period

India has provisions for 6 months' probationary period for hiring permanent employees. This period can be further extended by up to 3 months. If a permanent employee is employed as a probationer in a new post, he/she can be reverted to his/her old permanent post at any time during the probationary period of 6 months. An employment contract can be terminated without notice in probation. 

Working Hours

According to the Occupational Safety, Health and Working Conditions Act 2020 of India, no employee can be required or allowed to work in any establishment for more than eight hours a day and six days a week. Children under the age of 18 years cannot be employed for more than six hours a day, no more than three hours without break. The periods of hours of work for all categories of workers must be exhibited on the notice board of the industrial establishment. The Factories Act stipulates that no adult shall be allowed to work in a factory for more than 48 hours in any week and not more than nine hours in any day. If an employer is involved in a commercial activity, the regional shops and establishments statutes provide the applicable regulations. Generally, they include maximum nine hours per day and 48 hours per week.

Holidays / PTO

Statutory Holidays

India strikes a balance between national holidays, which are observed in all states and union territories, and gazetted holidays, which the nation's tremendously diverse states may or may not grant their residents.

National holidays are celebrated nationwide with businesses and government offices shutting down.

National holidays:

  • Republic Day - January 26
  • Independence Day - August 15
  • Gandhi Jayanti - October 2

 

Nationwide gazetted holidays:

  • Republic Day
  • Independence Day
  • Gandhi Jayanti
  • Mahavir Jayanti
  • Buddha Purnima
  • Christmas Day
  • Dussehra
  • Diwali (Deepavali)
  • Good Friday
  • Guru Nanak's Birthday
  • Eid ul-Fitr
  • Eid al-Adha (Bakri id)
  • Muharram
  • Prophet Mohammad's Birthday (Id-e-Milad)

 

In addition to the holidays listed above, there are also individual state and union territory holidays.

Paid Annual Leave

Employees are entitled to paid annual leave at the rate of one leave per 20 days of work if they have worked for at least 180 days in a year. For employees under 18 years of age, annual leave is calculated as one leave per 15 days of work. Up to 30 days of annual leave may be carried over to the next year. If the employment contract expires before a worker could take annual leave, compensation for leave is made in proportion to the number of months and the number of hours worked in a week.

Sick Leave

Sick leave is predominantly determined by company policy and state laws. Statutory sick leave provisions vary from industry to industry and range from 15 to 40 days. The best practice is to outline the terms and conditions of sick leave in contract documents. 

Maternity Leave

India's Maternity Benefit Act grants every female employee, with less than 2 surviving children, of a company with at least ten employees 26 paid weeks of maternity leave that can begin up to eight weeks prior to the due date. Women may not be employed during the first six weeks following the day of delivery or miscarriage. To obtain maternity benefits, an employee must work for at least 160 days in the 12 months preceding the expected delivery date. A female worker must give notice to her employer in writing and state when she wishes to take time off from work. If no notice is provided, maternity benefits begin the date she is absent from work to give birth. The amount of the benefit is equal to 100% of the wages paid by the employer.

Paternity Leave

While there is no statutory minimum paternity leave for private-sector workers, the law allows male government employees to take up to 15 days of leave if they have fewer than two surviving children. An employee can choose to take this leave once the baby is born, or anytime within six months of the delivery.

Termination of Employment

Notice Period

Employees who have worked for at least one year must be given written notice to terminate their contracts. The duration of notice period depends on the number of employees in the establishment and reason for termination: Establishments with at least 50 employees – 1 month  Closure of establishment with at least 50 employees – 60 days Establishments with at least 300 employees – 3 months 

Severance Benefits

Employees who have worked for at least 1 year are entitled to severance pay equal to 15 days' wages for each year of work or any part exceeding 6 months when they are dismissed by their employers with valid reason. No compensation is paid to employees who refuse to accept any alternative employment offered by their employers or are dismissed as a result of disciplinary action. Employees who are dismissed due to transfer or closure of establishment due to unavoidable reasons are also entitled to severance pay, provided that their severance pay does not exceed 3 months' wages. Employees who leave a job after having rendered 5 continuous years of service are entitled to gratuity payment at the rate of 15 days' pay for each completed year of continuous service or any part thereof exceeding 6 months. There is a ceiling of INR 2,000,000 (Indian rupees) when calculating severance payments. 

Social Security

Pension

India's Pension Fund Regulatory and Development Authority (PFRDA) administers and regulates the National Pension System (NPS). NPS is a voluntary, contribution-based retirement savings scheme that is structured into two tiers: Tier I – the non-withdrawable permanent retirement account into which the accumulations are deposited and invested as per the option of the subscriber. Tier II – a voluntary withdrawable account, allowed only when there is an active Tier I account in the name of the subscriber. In an effort to enroll more employees who work in the informal and unorganized sector into a pension scheme, the Indian Government established a pension scheme within the NPS called the Atal Pension Yojana (APY). Under the APY, the government will match 50% of an individual's contribution up to INR 1,000 (Indian rupees) per year for 5 years. The Employees' Provident Fund (EPF) is insurance for employers with at least 20 employees and some organizations with more than 50 employees. For companies with fewer than 20 workers, the program is voluntary. For employees with basic wages less than or equal to INR 15,000 per month, contributions are 12% of the monthly salary, and the employer contributes 3.67%. For employees with basic wages over INR 15,000 per month, the contribution is the same: 12% of the monthly salary and the employer contributes 12%.  

Dependents/Survivors Benefit

For work-related injuries resulting in death, survivors benefits are as follows: Spouse's pension – 60% of the disability pension the deceased received or was entitled to receive is paid to the widow(er). If there is more than one widow, the benefit is split equally. Orphan's and widowed mother's pension – 40% of the disability pension the deceased received or was entitled to receive is paid for an orphan younger than age 25 (no limit if disabled or an unmarried daughter) and widowed mother. Other eligible survivors pension – if there is no eligible widow(er), orphan, or widowed mother, up to 40% of the disability pension the deceased received or was entitled to receive is paid to other eligible survivors, including the deceased's father, widowed mother-in-law, grandparents; 20% for other dependents younger than age 18 (no limit for an unmarried female). The minimum monthly combined survivor pension is INR 1,200. The maximum combined survivors pension is 100% of the disability pension the deceased received or was entitled to receive. In the case of the non-occupational death of the insured person, survivors benefits will depend on the social insurance program of which the employee was a member.

Invalidity Benefit

In India, disability benefits may differ depending on which pension system an employee is a member of. Under the National Pension System, the monthly pension is based on the insured person's pensionable wages. In certain cases, it may be paid as a lump sum of total employee and employer contributions plus accrued interest. Benefits are adjusted annually by the central government based on an actuarial evaluation. Under the Employee Provident Fund, a lump sum of total employee and employer contributions (plus accrued interest minus previous withdrawals) is paid. Employees who are permanently and totally disabled are entitled to pension depending on their years of service. Under the Indira Gandhi National Disability Pension Scheme, a basic pension of INR 300 a month is paid. Additional amounts may apply and vary by state. For employees who suffer a temporary disability as the result of a workplace injury, 90% of the insured person's average daily wages are paid for the duration of the disability (must last at least three days). There is no maximum duration of payments. Average daily wages are based on the insured person's wages in the last six months. Employees who suffer a permanent disability as the result of a workplace injury are eligible for a permanent disablement benefit, under which a monthly pension is determined based on the assessed loss of earning capacity.

Taxation of Compensation and Benefits

Personal Income Tax

Income tax is applicable for individuals, businesses, and all establishments that generate income from sources in India. The tax assessment year runs from April 1 through March 31 of the next year. A new tax regime has been introduced in India for individual taxpayers that provides an optional tax rate table for simplified tax calculation and removes around 70 exemptions and about 100 deductions. Income tax for residents is calculated at graduated rates and currently ranges from 0 to 30%. Health and education levy applies at a flat rate of 4% of the income tax amount. High-income surcharge also applies to income above INR 5,000,000 A standard allowance of 100% of income-tax or INR 12,500 (whichever is less) applies to resident individuals if their total income does not exceed INR 500,000.

Immigration

Types of Visas

Visas are required of all foreign nationals seeking to enter India. Types of visas include: Transit visa – granted for the purpose of traveling through India to another destination, valid for 2 entries into India in the course of the same journey and allows staying up to 3 days. Tourist visa – granted for the purpose of tourism, can be multiple entry or single entry, valid for up to 5 years with restrictions on stay up to 90 days without registration. Nationals from US, Canada, UK and Japan can stay up to 180 days. Medical visa – granted to foreign nationals to seek medical treatment in specialized hospitals/treatment centers in India, valid for 6 months. Employment visa – granted to persons who are employed at an Indian company or traveling to India to volunteer with a Non-Governmental Organization (NGO), valid for 1 year or for the term of the contract. Business visa – granted to foreign nationals wish to visit India for business purposes, valid for 10 years with multiple entry, provided continuous stay during each visit does not exceed 180 days. Student and research visa – granted to foreign nationals to pursue on-campus, full-time (structured) courses at educational institutions duly recognized by the statutory regulatory body, valid for a maximum of 5 years with 4 entries per academic year. Intern visa –  granted to a foreigner intending to pursue an internship in Indian companies, educational institutions and NGOs for a maximum of 1 year. Entry ('X") visa – granted to Persons of Indian Origin who do not possess an OCI card, or spouse and children of an Indian citizen/ Person of Indian Origin/ OCI cardholder or foreigners coming to join missionaries or monasteries. It is valid for a maximum of 5 years. Conference visa –  granted to a foreigner whose sole objective of visiting India is to attend a conference/seminar or workshop being held in India. Sports visa – granted to members of foreign sports teams to visit India for sports events. Journalist visa – granted to foreign journalist, photographer, documentary film producer or director for a maximum of 3 months.  Missionary visa –  granted to a foreigner whose sole objective of visiting India is missionary work, granted for a maximum of 1 year with multiple entries. e-Visa – issued for tourism, medical treatment or short-term business purposes, valid for a period up to 60 days with double entry on e-Tourist Visa and eBusiness Visa and triple entry on e-Medical Visa.

Work Permit

India issues Employment or E visa for one year or the term of the contract in India (up to five years) to highly skilled and/or qualified foreign nationals who wish to work in India. E visa can only be issued to an employee of an organization registered in India. Foreigners traveling to India to do volunteer work with a Non-Governmental Organization will also need an E visa. E visa is also required for self-employed individuals, consultants, foreign artists conducting regular performances, specialists, etc.  The foreign national being sponsored for an E Visa in any sector must have an annual salary above INR 1,625,000. However, this condition does not apply to ethnic cooks, language teachers or translators and staff working for an embassy in India.

I'm ready to hire in India

contact-image-popup

Get in touch!

Contact us for a free consultation

By submitting this form, you acknowledge that you have read our Privacy policy