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Employee Leasing in India

As the second-most populous country in the world, India offers access to a market of over 1.3 billion individuals. The country also enjoys a strategic location that has put it at the crossroads of global trade routes for several millennia. This makes India a privileged destination for businesses wishing to expand their activity in the Asia-Pacific region at competitive costs.

The employee leasing services provided by FMC Group in India allow businesses to explore their potential in the large Indian market without having to set up a local subsidiary or worry about local regulations. This presents clients with tremendous flexibility that allows them to increase or decrease their investment as they measure their growth potential. It also helps businesses significantly reduce the time and financial costs needed for expanding into India.


  • Advantages of Employee Leasing in India
  • Employee Leasing Services Offered by FMC Group
  • Advantages of the Indian Market
  • Recruitment in India
    • Minimum Wage and Payroll
    • Social Contributions and Taxes
    • Working Hours and Overtime
    • Vacation Days
    • Parental Leave and Sick Leave
    • Notice Period
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Stephan Dorn FMC Group

Advantages of Employee Leasing in India

  • Employee leasing in India allows businesses to quickly expand their activity into the large Indian consumer market with reduced costs.
  • Employee leasing helps businesses recruit the best candidates from a large talent pool, thanks to adapted job advertisements and a strict hiring process.
  • Expanding into India through employee leasing gives companies control of a highly-skilled local team that is very familiar with the Indian business environment and the various opportunities it offers.
  • Employee leasing lets companies expand their activity into India without having to set up a local subsidiary or dealing with administrative and legal obstacles.

Employee Leasing Services Offered by FMC Group

  • We choose candidates that perfectly fit your business needs;
  • We negotiate and sign employment contracts with successful candidates;
  • We manage the payroll according to international standards;
  • We pay social contributions, taxes, and other expenses according to the Indian labor law;
  • We monitor the paid leaves of your employees;
  • We negotiate and implement private health insurance if needed;
  • We keep you in the loop on a daily basis regarding the management of your employees.

Management and Reporting Flow of Employee Leasing Services

Management and Reporting Flow Chart

Advantages of the Indian Market

  • India has one of the world’s fastest-growing economies. In the 2020-2021 financial year, the country attracted its highest FDI inflow ever, at more than USD 83.5 billion. The Indian economy is also expected to maintain its rapid growth for years to come. According to the Indian Ministry of Finance’s calculations, India’s GDP is projected to grow at 9.0% in 2021-2022 and 2022-2023, and at 7.1% in 2023-2024, making India the fastest-growing major economy worldwide.
  • India has the largest youth population in the world, with nearly 380 million individuals aged between 10 and 24 years. This shows that the Indian labor force and consumer market will continue to ascend in terms of size for the foreseeable future, providing businesses with immense opportunities.
  • Indian infrastructure is rapidly-developing thanks to a national infrastructure investment program that seeks to provide world-class infrastructure across the country by 2025. The program includes nearly 7,000 projects across the energy, roads, and railway sectors, with a global budget of more than INR 1,000 billion (EUR 12.5 billion).
  • India is a hub for global maritime trade between the Pacific and Indian Oceans. The country is also connected to Central Asia and Europe via the International North-South Transport Corridor (INSTC), a 7,200-kilometer-long multi-mode network of transport between Mumbai, India, and Moscow, Russia. India’s importance as a trade hub grants it a great economic influence across the Asia-Pacific region.
  • India has great potential for innovation thanks to the size of its young talent pool and its large investments in education and infrastructure. In the 2021 Global Innovation Index, the country ranked first in the Central and Southern Asia region, third amongst the Lower Middle-Income Economy Group, and 46th worldwide.
  • On India Investment Grid, you can find a comprehensive living repository that showcases a broad range of investment opportunities in India.
  • India National Investment Promotion and Facilitation Agency is another useful entity to start exploring India as an investment destination.

Recruitment in India

Minimum Wage and Payroll

  • There is no national minimum wage in India. The minimum salary is defined by state governments in each region and uses a method that takes into consideration the geographical area, the type of employment, the industry, the skill level, and the seniority of the employee.
  • Salaries are paid monthly, usually on the 28th of each month.
  • The 13th-month salary is mandatory in the majority of Indian states. It is typically paid before the end of the financial year (March 31st).

Social Contributions and Taxes

Employer Contributions
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) 12.00%
Employee’s State Insurance (ESI) 4.75%
Total 16.75%
Employee Contributions
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) 12.00%
Employee’s State Insurance (ESI) 1.75%
Total 13.75%
Employee Income Tax
Less than INR 250,000 (EUR 3,127) per year 0.00%
Between INR 250,001 and INR 500,000 (EUR 3,127 – EUR 6,252) 5.00%
Between INR 500,001 and INR 750,000 (EUR 6,252 – EUR 9,377) 10.00%
Between INR 750,001 and INR 1,000,000 (EUR 9,377 – EUR 12,503) 15.00%
Between INR 1,000,001 and INR 1,250,000 (EUR 12,503 – EUR 15,632) 20.00%
Between INR 1,250,001 and INR 1,500,000 (EUR 15,632 – EUR 18,759) 25.00%
Over INR 1,500,000 (EUR 18,759) 30.00%


Working Hours and Overtime

  • The legal working hours limit in India is set at 48 hours per week and nine hours per day.
  • Overtime work is paid at a rate of 200% of the regular salary.

Vacation Days

  • Employees in India have the right to a minimum of 15 days of paid vacation per year after they complete 240 days of service.
  • Employees have to request their paid leave at least 15 days before its start date.
  • India celebrates only three public holidays that are observed in all Indian states:
    • Republic Day: January 26th;
    • Independence Day: August 15th;
    • Gandhi Jayanti: October 2nd.
  • Other holidays are state-specific and mostly include religious holidays for Hindus, Muslims, Sikhs, Christians, and Buddhists.

Parental Leave and Sick Leave

  • Female employees in India can take fully-paid maternity leave for 26 weeks after the birth of their first two children. The leave’s duration decreases to 12 weeks after two births. Pay is covered by social security.
  • Public sector male employees are entitled to 15 days of paid leave after the birth of their child, but there are no statutory paternity leaves for the private sector.
  • Employees in India can take 15 days of paid sick leave per year. Sick pay is calculated at a rate of 70% of the regular salary and it is covered by the employer.

Notice Period

  • The minimum notice period in India is set at 30 days.

Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.