Can a US food company set up a wholly owned subsidiary in India?

It may be possible, but the permitted foreign-investment route and conditions depend on the activity, sales channel and current policy. Check the actual model, including retail or e-commerce elements, before deciding ownership.

Can a US company ship its existing US-labelled products to India?

Not automatically. Check applicable FSSAI requirements, food-import conditions, ingredients, standards, declarations and product-specific rules. Packaging used in the US may need changes to meet Indian requirements.

Does FSSAI approval cover every product and location?

The licence or approval needed depends on the activity, premises and product. Confirm the applicable licensing and product requirements for the planned import, manufacturing, storage, distribution or sale.

Should a US food brand use a distributor or set up its own subsidiary?

A distributor may help test demand with less direct infrastructure, while an Indian subsidiary can provide more control over hiring, contracts and operations. Compare margins, regulatory responsibilities, inventory risk, investment and long-term plans.

What should be in a contract-manufacturing agreement?

Cover product specifications, approved ingredients and suppliers, quality testing, audits, batch records, change control, packaging, traceability, complaints, recalls, confidentiality, IP, delivery and termination.

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US to India · Food, beverage and consumer products

Setting Up an Indian Subsidiary for a US Food and Beverage Company

A US food or beverage company may enter India by importing finished products, appointing a distributor, manufacturing locally, using a contract manufacturer or selling through retail and online channels. The right route depends on the product, ingredients, claims, shelf life, packaging, channel and who will hold the required licences.

Prepared by AU Corporate's CA-led advisory team · Published 13 October 2026 · General guidance; confirm current rules and product-specific requirements before acting.

Quick answer

What should a US food or beverage company check before entering India?

Define the products and route to market first. Check the relevant FSSAI licence or registration, food-import requirements, ingredient and product standards, labelling and claims, current foreign-investment conditions, local distribution contracts, customs, GST and ongoing product and company compliance. A company registration alone does not approve a food product for import or sale.

1. Choose how products will reach Indian customers

Compare importing finished products, local contract manufacturing, building a facility, appointing a distributor or selling through retail and e-commerce. Decide which entity will import, hold inventory, invoice customers, manage returns and take responsibility for product complaints.

Map the supply chain from manufacturer to end customer.
Decide whether the Indian entity or a local partner will be importer and seller.

2. Check FSSAI and food-import requirements

Review the Food Safety and Standards Authority of India (FSSAI) requirements for the actual product, business activity and import route. Depending on the model, licensing, importer requirements, product standards, inspection and clearance steps may apply. Confirm requirements before shipping commercial inventory.

Check licence requirements for each activity and business premises.
Confirm import clearance steps and document needs before dispatch.

3. Review ingredients, claims and packaging

Check permitted ingredients, additives, product standards, nutrition information, allergens, shelf-life details, date marking and mandatory label declarations. Health, nutrition, organic or other claims may have specific conditions. Do not assume packaging compliant in the US can be used unchanged in India.

Review artwork and claims before printing packaging at scale.
Confirm applicable label rules and any product-specific restrictions.

4. Compare import, manufacturing and distribution economics

Model customs, freight, duties, storage, cold-chain needs, wastage, expiry risk, distributor margins, marketplace fees and working capital. For local production, also assess ingredient sourcing, quality assurance, production capacity, packaging suppliers and contract-manufacturer controls.

Build a landed-cost and shelf-life model for each product.
Set quality, recall, traceability and stock-rotation obligations in contracts.

5. Check ownership and commercial agreements

Verify current FDI conditions for the actual food, retail, e-commerce, manufacturing or distribution activity. Structure distributor, retailer, marketplace and contract-manufacturing agreements to cover territory, pricing, forecasts, product quality, returns, recalls, IP and customer data.

Review the route against the exact channel and product mix.
Set clear responsibility for complaints, product withdrawal and customer communication.

6. Plan tax, customs and intercompany pricing

Review customs classification, GST, withholding and transfer pricing for imported products, royalties, brand licences, management support or contract services. Keep invoices, agreements and goods movement records aligned with the actual transaction.

Confirm product classification and tax treatment before finalising prices.
Document any brand licence or support provided by the US parent.

7. Prepare for recurring operating compliance

Plan corporate filings, accounting, audit, tax, payroll and foreign-investment reporting, together with food licences, renewals, supplier checks, traceability records, complaints, recalls and label updates.

Assign owners for food-safety and company-law requirements.
Keep batch, supplier, import and distribution records accessible for review.

Official sources to check

Use official sources to confirm current requirements for the product, activity and route to market. Licensing and compliance obligations may differ by product, business activity and location.

Related guides

AU Corporate can help map India-side incorporation, tax and ongoing compliance workstreams to the proposed operating model.

This article is general information, not legal, tax, regulatory or investment advice. Rules can change; confirm current requirements before making business decisions.