India’s vast and diverse geography presents both an opportunity and a challenge for global businesses looking to set up operations. With 28 states and 8 union territories, each offering unique advantages in terms of infrastructure, policy incentives, industry focus, and talent, selecting the right location can significantly influence your foreign venture's success.
Unlike centralized economies, India’s federal structure gives individual states the power to frame industrial policies, tax incentives, and ease-of-doing-business reforms. So, choosing the right Indian state isn’t just about geography — it’s about aligning your business goals with the state’s ecosystem, workforce, and regulatory climate.
Top Factors to Consider Before Choosing a State
1. Industry Focus and Sector Strengths
Each state has developed sectoral strengths:
Maharashtra (Mumbai, Pune): Finance, media, SaaS, manufacturing
Karnataka (Bengaluru): IT, biotech, deep tech, aerospace
Tamil Nadu (Chennai, Coimbatore): Automotive, electronics, renewable energy
Gujarat (Ahmedabad, Surat): Textiles, chemicals, engineering, ports
Telangana (Hyderabad): Pharma, agritech, SaaS, logistics
Delhi-NCR (Gurugram, Noida): Fintech, D2C brands, consulting
2. Ease of Doing Business
States like Andhra Pradesh, Gujarat, Telangana, and Karnataka frequently top the Department for Promotion of Industry and Internal Trade (DPIIT) rankings for ease of doing business. Factors include:
Single-window clearances
Online registration systems
Investor facilitation cells
3. Talent Availability
India’s talent pool varies by region:
Bengaluru, Hyderabad, Pune: Best for tech, product, and engineering teams
Chennai, Coimbatore: Ideal for manufacturing, supply chain, and quality control
Delhi-NCR: Strong for business development, finance, and D2C operations
4. Connectivity & Infrastructure
Evaluate access to:
International airports and sea ports
Industrial parks and SEZs
Power, logistics, and internet readiness
5. Incentives & Policy Support
Many states offer capital subsidies, tax exemptions, land at subsidized rates, and R&D grants. For example:
Gujarat’s GIDC parks
Tamil Nadu’s MSME facilitation
Telangana’s TSiPASS single-window system
6. Language, Culture & Local Partnerships
While English is widely spoken in business, cultural familiarity and ease of communication with local vendors, regulators, and talent matter. Some regions are more global-business friendly, while others may require stronger local partnerships.