Executive summary
Japanese and Korean companies increasingly look at India for engineering and R&D capacity, not only for sales. An India R&D centre can be a small product-engineering team or part of a larger global capability centre (GCC). This guide sets out the decisions that matter most: whether India fits the work, which legal route applies, and what to settle on talent, intellectual property and tax before committing. It relies on official Indian sources and says plainly where the evidence stops.
Decide what the centre is for
Start with the work, not the location. Common mandates are:
A narrow mandate is easier to staff, measure and protect. If several functions are planned, read our India GCC overview and the GCC setup guide, which cover the multi-function model.
Choose the legal route
Most foreign companies run R&D through a wholly owned private limited subsidiary. Under India's FDI policy, most sectors allow up to 100% foreign ownership under the automatic route, meaning no prior government approval, subject to sectoral conditions. Investors from countries that share a land border with India follow a separate approval route; Japan and Korea do not fall in that group, but group structures with such shareholders need checking.
Other options include a branch or liaison office (narrower permitted activities), an engineering contract with an Indian service provider, or a build-operate-transfer arrangement. Each carries different control, cost and IP consequences.
Company law sets basic requirements. A private company needs at least two directors, and section 149(3) of the Companies Act, 2013 requires at least one director who stays in India for at least 182 days in the financial year.
Treaty context for Japanese and Korean companies
India has a Comprehensive Economic Partnership Agreement with Japan (in force 1 August 2011) and with Korea (in force 1 January 2010), according to India's Ministry of Commerce and Industry. These agreements cover trade, services and investment, but they do not approve or fund any specific centre. India also has income-tax treaties with both countries; how they apply to cost-plus R&D service income, secondments and royalties is a question for qualified tax advisers.
Settle five questions before committing
What this guide does not tell you
How Nirji Ventures engages
The Nirji Community is a private network for companies and startups exploring Asia Pacific expansion; expressing interest is free and does not promise funding, introductions or programme admission. NirjiX, the group's consulting firm, takes on paid market-entry, partner-diligence and project-execution engagements. The two paths are separate: Community participation is not a consulting engagement, and consulting enquiries do not require Community membership.