India is one of the most attractive talent markets in the world. With over 500 million working-age adults, competitive salary levels, strong English proficiency, and a deep pool of technical talent, it's no surprise that thousands of UK and international businesses are hiring in India.
But navigating Indian employment law, entity structures, and cultural expectations can be complex. This guide breaks down everything you need to know.
Why Hire in India?
The business case for hiring in India is compelling. Salary costs for equivalent roles are typically 60–70% lower than in the UK or US. India produces over 1.5 million engineering graduates annually, and the country's time zone (UTC+5:30) provides useful overlap with both European and Asian business hours.
Beyond cost, Indian professionals bring strong technical skills, English language fluency, and increasing familiarity with global business practices. The remote work revolution has made it easier than ever to integrate Indian team members into distributed teams.
Entity Setup vs Employer of Record (EOR)
Foreign companies have two primary routes to hire in India. The first is setting up a local entity — a subsidiary or branch office registered with Indian authorities. This gives you full control but involves significant upfront costs (₹5–15 lakhs), legal complexity, and a timeline of 2–4 months.
The faster alternative is an Employer of Record (EOR) arrangement, where a local partner (like VLS Sourcing) becomes the legal employer on paper while you manage the day-to-day work. EOR lets you hire in India within days, with no entity setup required.
Key Indian Labour Laws to Know
India's employment regulatory landscape includes several important laws. The Industrial Disputes Act governs termination and layoff procedures. The Employees' Provident Fund (EPF) requires employer contributions of 12% of basic salary. The Payment of Gratuity Act mandates gratuity payments after 5 years of service. Shops and Establishments Acts vary by state and regulate working hours, leave, and conditions.
Companies must also comply with the Sexual Harassment of Women at Workplace Act, professional tax obligations (which vary by state), and income tax withholding (TDS) requirements.
Salary Benchmarks (2026)
Salary expectations vary significantly by role, experience, and city. A mid-level software developer in Bangalore commands ₹12–20 LPA, while a similar role in a tier-2 city might be ₹8–14 LPA. Customer support roles typically range from ₹3–6 LPA, while senior management positions can reach ₹30–50 LPA in metros.
Beyond base salary, Indian compensation packages typically include House Rent Allowance (HRA), medical insurance, EPF contributions, and performance bonuses — adding 20–35% to the CTC (Cost to Company).
Recruitment Channels in India
The most effective channels for hiring in India include job portals (Naukri.com dominates the market), LinkedIn (increasingly important for mid-senior roles), employee referrals, campus recruitment from top institutions, and recruitment agencies like VLS Sourcing that maintain pre-vetted candidate databases.
How VLS Sourcing Can Help
As a recruitment firm with 10+ years of experience and offices in both India and the UK, VLS Sourcing simplifies the entire process. We handle sourcing, screening, compliance, and can act as your EOR — letting you hire in India within days, not months.