Medical Device Industry – Payroll In India
The Medical Devices industry in India is presently valued at USD 5.2 billion and contributes 4-5% to the USD 96.7 billion Indian health care industry. Currently, India is counted among the top 20 global medical devices market and is the 4th largest medical devices market in Asia after Japan, China and South Korea. The Central Drugs Standard Control Organization (CDSCO) is the national regulatory body for Indian pharmaceuticals and medical devices, and serves parallel function to the European Medicines Agency, PMDA of Japan, FDA of United States of America and Medicines and Healthcare Products Regulatory Agency of United Kingdom.
Why There Is a Trend for Overseas SMEs to Hire Sales/Country Manager/ HR for Developing Business In India
Owing to the growth in the medical device industry in India, foreign companies are showing an increasing trend to hire a person to work in India as it is one of the most progressive countries across the globe. Hiring a person locally gives them access to several things such as assessment of the total market, potential buyers and target market, knowing about competition, cost & product mix, entry options, regulatory environment, choosing a dynamic business model and then most importantly, implementation of the business strategy. People are generally hired for sales or as a country manager who can help them with imports and other processes which enables the foreign company to quickly establish their presence in India. The medical device industry is a highly fragmented market and requires a complete access to various distributors across the country. It needs a dedicated person who is accessible to these distributors at all times and is locally present in the country to boost sales.
Compliance’s To Keep In Mind When Recruiting HR In India
When hiring in India, an overseas manufacturer has to keep in mind several laws which directly and indirectly affect operations even in their home country. One of the most important law is – Permanent Establishment Act. Apart from PE, there are several taxation’s (Payroll’s) to be kept in mind for any foreign company hiring in India.
- Permanent Establishment Act
- Social Security – Shop And Establishment Act & Factories Act, 1948
- Wages – Payment of Wages Act, 1936 & Minimum Wages Act, 1948 & Payment of Bonus Act, 1965
- Benefits for Women – Maternity Benefit Act, 1961 & Equal Remuneration Act, 1976
- Industrial Relation – Employee State Insurance Act, 1948 & Employee Provident Fund Act, 1952 & Payment of Gratuity Act, 1972 & Labor Welfare Fund Act, 1965
Different Ways Overseas Manufacturers Can Hire Human Resources For Indian Market
- Via consultancy contracts
- Direct overseas payroll
- Establishing a local office and recruiting via the same
- Recruitment via partner firms
What Is The Taxation / Compliance Impact
It is important for overseas companies to understand that while engaging with Human Resources for Indian Business Development, how the above laws impact operations. For example, in many instances (including engaging with consultants) Permanent Establishment may be applicable resulting in company’s having to comply with local taxation on business generated in India. Additionally, even if a overseas company engages with even one human resource personnel, they would have to comply with certain labor laws and employee security funds.
How Morulaa Can Help?
To know more on how you can avoid such compliance/payroll issues, email us at [email protected] for further details.