There is a point during every business expansion in India where logistics, talent, pricing and reporting collide into one uncomfortable question: which type of entity is right for the business? India offers several entity types, among which headquarters, export hubs and service centres are most adopted by foreign companies in their global expansion strategy. Many businesses select based on convenience rather than strategy and face compliance challenges or operational hurdles. As per data from the Ministry of Corporate Affairs, between 2017 to 2022, 3,552 foreign companies and subsidiaries shut down in India, largely due to misalignment between the entity chosen and business goals.
According to a report by PwC, 64 % of global CEOs consider regulatory complexity a major risk to business expansion, and the chosen structure either amplifies or contains that burden. An Indian HQ, export hub or service centre each governs cash flow, authority and risk in different ways. Selecting the right structure from the start is essential for long-term success in India.
Understanding the Three Models
Indian HQ: The Command Centre for Market Leadership
An Indian headquarters is a full-fledged operating entity with profit and loss responsibility, leadership authority and long-term market accountability. It is the preferred model for organisations that see India not just as an operating base but as a growth market and regional command centre.
An Indian HQ oversees sales, marketing, partnerships, compliance, talent development and often coordinates activity across South Asia and adjacent regions.
Advantages
Strategic control: An HQ structure allows full authority over pricing, contracts, branding and customer management. For regulated sectors such as healthcare, infrastructure, defence or financial services, direct control is often essential for growth.
Market and policy alignment: Locally headquartered entities can access government programmes, apply for subsidies, collaborate with research institutions and compete for public sector contracts. Production-linked incentives and sector-level manufacturing schemes further strengthen commercial viability.
Long-term positioning: Establishing an HQ anchors leadership inside the country. It enables faster decision-making, deeper customer insight, product localisation and stronger market credibility.
Challenges
Regulatory breadth: HQ entities are subject to India’s corporate tax, transfer pricing, GST and industry-specific regulation. Strong governance and financial controls are essential.
Capital and leadership commitment: Setting up an HQ requires long-term investment, market confidence, and a capable leadership team. Returns compound over time rather than appearing immediately.
Best suited for:
Organisations with revenue ambitions in India, regional leadership objectives, or deep regulatory exposure including manufacturers, consumer brands, infrastructure players, financial services firms and enterprise technology companies.
Export Hub: Manufacturing and Global Delivery from India
An export hub is designed primarily for manufacturing, assembly or service delivery for overseas markets using India as a cost-efficient and scalable production base. These operations usually sit within Special Economic Zones (SEZs), Export Oriented Units (EOUs) or international finance frameworks such as GIFT City.
This is the preferred route for organisations pursuing global expansion strategy such as China+1, supply-chain de-risking or offshore treasury operations.
Operational Structures
SEZs and EOUs: Duty-advantaged manufacturing and service enclaves with more than 5,700 approved units and roughly 3 million workers.
GIFT City IFSC: Designed for banking, capital markets, insurance and treasury operations with offshore-style flexibility within India.
Advantages
Lower operating cost: Duty exemptions, income tax benefits and GST relief directly improve profitability and international pricing power.
Infrastructure advantage: Export hubs offer developed industrial land, regulatory facilitation, efficient logistics and proximity to ports and airports.
Faster deployment: Many zones provide plug-and-play facilities allowing businesses to become operational with minimal lead time.
Challenges
Limited domestic flexibility: Export-focused structures are not designed for Indian market access. Domestic sales attract full taxation.
Narrow operational scope: Export units are operationally strong but strategically limited unless supported by a separate India-facing business structure.
Best suited for:
Manufacturing-led businesses, global sourcing operations, treasury centres, cross-border service exports and firms restructuring supply chains away from concentrated geographies.
Service Centre: Operational Backbone for Global Functions
A service centre consolidates business-critical activities such as finance operations, HR administration, IT support, engineering, analytics and customer operations. Unlike export hubs, service centres focus on operational enablement rather than production.
India’s combination of skilled workforce, digital maturity and cost advantage makes it one of the world’s leading markets for such structures.
Typical Functions
Finance and accounting
Procurement and supply-chain coordination
Technology support and cybersecurity operations
Data analytics and reporting
Product engineering and platform development
Customer service and back-office workflow
Advantages
Cost-to-value efficiency: Service centres can deliver 30 to 50 percent savings compared to onshore operations while maintaining quality and scale.
Operational scalability: Teams can expand quickly as business support needs grow, allowing companies to remain lean at their core.
Talent access: India provides both technology specialists and domain expertise at scale, supporting high-growth operations.
Challenges
Talent retention: Service centres must offer structured career progression and integration with global teams to avoid attrition.
Data and compliance exposure: Data localisation and information security require mature legal and IT frameworks.
Best suited for:
Global enterprises seeking efficiency across finance, technology, analytics, operations and administrative functions at scale.
Comparative Evaluation of All Three Models
The structure you choose determines how your Indian operations integrate with global leadership, supply chains and internal processes. The comparison below highlights how each model performs across strategic authority, cost profile, scalability and regulatory complexity, helping clarify which structure fits your business expansion goals best.
Decision Factor
Indian HQ
Export Hub
Service Centre
Strategic control
Full commercial and leadership authority
Operational, not strategic
Functional, not commercial
Market focus
Indian and regional markets
Global exports
Internal business support
Regulatory exposure
High
Moderate and structure-specific
Moderate
Capital intensity
High
Medium to high
Low to medium
Speed of setup
Moderate
Fast within zones
Fast
Scalability
Long-term market growth
Manufacturing-scale expansion
Headcount-based growth
Domestic flexibility
High
Limited
None
Ideal user profile
Market builders and regional leaders
Exporters and manufacturers
Process and service-driven firms
Why India is a Strategic Choice for Business Expansion Today
India offers a rare balance of scale, workforce depth, policy reform and infrastructure investment.
Government spending under the National Infrastructure Pipeline has surpassed USD 1.5 trillion, expanding highways, ports, freight corridors and aviation networks. This directly reduces logistics costs and improves time to market for exporters.
Digital reforms such as GST integration and centralised filing systems have modernised compliance.
Foreign investment rules allow full ownership in most sectors.
Trade agreements with the UAE, Australia and ASEAN members extend market access for exporters operating from India.
No other location today combines workforce depth, regulatory reform, consumer scale and cost advantage with the same consistency. Whether you choose India as a headquarters, an export base or a service engine, the country now enables outcomes at both strategic and operational levels.
Final Thought
Deciding how to structure your business in India is a choice that should be guided by strategy and long-term goals, not by convenience.
India is one of the few markets capable of supporting all three with maturity.
The winning organisations are those that treat their business expansion in India, not as a static investment, but as a platform that evolves with business priorities.