Project Exports and Business Operations in India

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Dated: 03.03.2026

Project Exports and Business Operations in India

India has emerged as a global leader in project exports, offering businesses a unique opportunity to expand their operations internationally. With a robust framework of policies, incentives, and guidelines, the Government of India has created a conducive environment for project exporters to thrive. This article provides a detailed overview of project exports, export procedures, government incentives, and the steps to set up business operations in India.

What Are Project Exports? 

Project exports involve the export of engineering services, turnkey projects, construction works, consultancy services, and project construction items. These exports are governed by the Foreign Trade Policy of the Government of India and the guidelines prescribed by the Reserve Bank of India (RBI) under the Project Exports Manual (PEM).

Types of Project Exports 

Civil Construction Projects: Infrastructure development such as roads, bridges, airports, and buildings.
Turnkey Projects: Engineering, procurement, and construction from concept to commissioning.
Process and Engineering Consultancy Services: Specialized consultancy services for engineering and process industries.
Project Construction Items: Includes construction engineering products, equipment, accessories, and other project goods.

Key Sectors for Project Exports 

Indian project exporters have successfully executed projects worldwide in sectors such as:

Water: Water supply, sanitation, irrigation, flood protection.
Energy: Thermal, hydel, renewable energy, oil, and gas.
Social Infrastructure: Urban development, transportation, IT, telecommunications, health, and education.
Industry: Industrial plant projects, chemicals, mining, and metals.

Export Procedures

Step-by-Step Guide

Obtaining Import-Export Code (IEC): Apply for an IEC Code from the Directorate General of Foreign Trade (DGFT). This is mandatory for all exporters.
Membership with Project EPC: Register with the Project Exports Promotion Council of India (Project EPC) to access export-related services and facilities.
Registration cum Membership Certificate (RCMC): Apply for an RCMC to claim export benefits under the Foreign Trade Policy.
Approval from Screening Committee: Get approval from the Screening Committee to undertake overseas projects as a prime contractor or subcontractor. This ensures the technical, managerial, and financial capabilities of the exporter.
Insurance Cover: Obtain credit insurance policies from the Export Credit Guarantee Corporation of India (ECGC) to protect against political and commercial risks.
Deployment of Personnel: Secure clearance from the Protector General of Emigrants for deploying personnel abroad.
Export Promotion Assistance: Avail government schemes like Market Development Assistance (MDA) and Market Access Initiative (MAI) for financial support.

Key Export Incentives 

Government Schemes

Export Promotion Capital Goods (EPCG) Scheme: Allows import of capital goods at reduced customs duty with export obligations.
Duty Exemption/Duty Remission Schemes:
- Advance Licence: Duty-free import of inputs for export production.
- Duty Free Replenishment Certificate (DFRC): Duty-free replenishment of inputs used in export products.
- Duty Entitlement Passbook Scheme (DEPB): Refund of import charges on inputs used in export products.
Duty Drawback Scheme: Refund of customs and excise duties paid on inputs used in export products.

Marketing Development Assistance (MDA) Scheme 

The MDA scheme supports exporters in activities such as:

Participation in trade fairs and exhibitions.
Trade delegations and buyer-seller meets.
Publicity campaigns and brand promotion.

Market Access Initiative (MAI) Scheme 

The MAI scheme focuses on promoting exports through:

Market studies and surveys.
Opening showrooms and warehouses abroad.
Displaying products in international departmental stores.
Publicity campaigns and participation in trade fairs.

Setting Up Business Operations in India 

Options for Foreign Companies 

Foreign companies planning to set up business operations in India have the following options:

Incorporated Entity:
- Joint Ventures: Collaborate with Indian companies.
- Wholly Owned Subsidiaries: Establish a company under the Companies Act, 1956.
Unincorporated Entity:
- Liaison Office: Acts as a communication channel between the foreign company and Indian entities.
- Project Office: Set up for executing specific projects in India.
- Branch Office: Engage in activities such as research, export/import, consultancy, and technical support.

Procedure for Setting Up Offices 

Liaison Office

A liaison office can only act as a communication channel between the foreign company and Indian entities. It cannot undertake business activities or earn income in India. Expenses must be met through inward remittances from the head office abroad.

Steps to Set Up a Liaison Office:

Submit Form FNC-1 to the Foreign Investment Division, RBI.
Obtain initial permission for three years, which can be extended.
File an annual Activity Certificate from a Chartered Accountant to the RBI.

Project Office

Foreign companies can set up project offices in India if they have secured a contract funded by inward remittance, international financing agencies, or Indian financial institutions.

Steps to Set Up a Project Office:

Ensure the project meets RBI’s general permission criteria.
If the parent entity is from Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, or China, apply to the RBI Central Office for approval.

Branch Office

Branch offices can engage in activities such as research, export/import, consultancy, and technical support. However, they cannot undertake manufacturing or retail trading activities.

Steps to Set Up a Branch Office:

Submit Form FNC-1 to the RBI.
Obtain permission based on the company’s track record, financial position, and trade relations with India.
File an annual Activity Certificate from a Chartered Accountant to the RBI.

Incorporating a Company in India 

Incorporation of a company in India is governed by the Companies Act, 1956. A company can be a private limited company or a public limited company.

Steps to Incorporate a Company 

Choose a Name: Select a unique name and get it approved by the Registrar of Companies.
Prepare Documents:
- Memorandum of Association.
- Articles of Association.
- Agreement with managing directors or managers (if applicable).
- Proof of payment for registration fees.
- Forms for directorship and registered office details.
Submit Application: File the application with the Registrar of Companies in the state where the company will be incorporated.
Receive Certificate of Incorporation: Once approved, the company becomes a legal entity.

Conclusion

India’s export promotion policies and business-friendly environment make it an attractive destination for foreign companies looking to expand their operations. By leveraging government schemes and adhering to prescribed guidelines, project exporters can unlock immense opportunities in global markets.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: Ministry of Commerce & Industry

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