New Delhi: The number of foreign companies operating in India has seen a notable decline over the past seven years, according to data released by the Union Ministry of Corporate Affairs (MCA).
The data indicates that among registered foreign companies in India, the share classified as “active” stood at 70% in the 2018-19 financial year. As of January in the current year, this has dropped to 62%.
Experts attribute the shift to changes in how overseas businesses structure their presence in India. Many firms are reportedly shutting small liaison or branch offices and instead registering direct subsidiaries to benefit from stronger business management and tax advantages.
Typically, foreign companies enter India by setting up branch or liaison offices. Once operations mature, they close these initial setups and establish subsidiaries with wider powers—leading to a reduction in the count of active foreign-company registrations under the earlier office formats.
