Find a business partner in India: choosing and checking a distributor, integrator, contract manufacturer or licensee

Short answer: To find a business partner in India, decide first what the partner must do (resell, integrate, manufacture or license), because that choice fixes who owns the customer, who holds the stock and how hard the relationship is to end. Then check each shortlisted company in the public records before signing: its company filings, directors and registered charges on the Ministry of Corporate Affairs portal, its GST registration, court and insolvency records and EU sanctions lists, followed by references and a site visit [1][2][3]. The first agreement matters as much as the search: tie exclusivity to minimum performance, keep the trademark in your own name and agree notice and stock buy-back on termination, because a restraint on the partner after the agreement ends is void under Indian contract law [4].

Who this is for: Export directors, CFOs and general counsel of Spanish, Italian, French and other European component and equipment makers appointing their first partner in India.

Distributor, system integrator, contract manufacturer or licensee: which Indian business partner?

A distributor buys your products and resells them on its own account. A commission agent finds customers who buy from you, for a commission. A system integrator builds your components into larger systems for its own customers. A contract manufacturer makes products to your design. A licensee makes and sells using your technology and pays fees and royalties.

Licensee. Royalties and technical fees are withheld in India at 10% under the India–Spain treaty with a tax residency certificate and Form 41 [6][7]; the economics are in licensing your technology to an Indian company instead of investing.

System integrator. Integrators often ask for a trial installation before they design your part in; set it up as in from pilot to paid contract with Indian companies. Automation integrators are covered in industrial automation in India through local system integrators

Contract manufacturer. If you are buying from India rather than selling into it, the supplier checks are in sourcing from India: a checklist for European buyers

Equity. If either side will take shares, it is a joint venture, with foreign-investment rules and shareholder terms: see India entry strategy: joint venture, acquisition or greenfield and Joint venture in India or acquisition: deal structure and shareholder protections (ATB Legal).

How to find candidates and build a shortlist

Start where your customers already buy: the distributors, integrators and contract manufacturers that your European customers' Indian plants use, the exhibitors in your product category at Indian trade fairs, and the vendor lists of the Indian buyers you want to reach. Shortlist three to five, and score each on the customers it already serves, its technical and service staff, the states it covers and its balance sheet. The wider entry picture for European companies is in India for European companies: entry, structuring and the EU–India deal.

Due diligence India: checking a partner in public records

1. Company record. Start with "View Company or LLP Master Data" on the Ministry of Corporate Affairs (MCA21) portal [1]. The registered name and office should match the partner's letterhead, GST registration and bank account.
2. Filed documents. "View Public Documents" opens the company's filings once a fee is paid [1][8]. Read three years of financial statements: revenue, receivables, debt and auditor's remarks.
3. Directors. Run "View Director Master Data" and "Enquire DIN Status" for each director, look at the other companies they run, and check the MCA's list of companies and directors under prosecution [1].
4. Charges. "View Index of Charges" lists the security interests registered against the company, so you can see who has lent against its assets [1].
5. GST. Ask for the GST registration number (GSTIN) and enter it in "Search Taxpayer" on the GST portal, which anyone can use without logging in: check the effective date of registration, any date of cancellation and the record of returns filed [2].
6. Litigation and insolvency. Have Indian counsel search court and tribunal records against the company and its directors, including insolvency petitions.
7. Sanctions and owners. Ask who owns the company, then screen it, its owners and directors against the EU consolidated sanctions list and the EU Sanctions Map [3].
8. References and a visit. Call three customers you choose, not the ones offered, visit the premises, and meet the people who will sell and service your product.

Red flags. A name, address or GST number that does not match the company record; payments to or from accounts in another name; accounts not filed; directors with a trail of short-lived companies; fresh charges over all assets; owners it will not name; requests for unexplained commissions; and a demand for all-India exclusivity with no minimum.

What the first agreement must fix

• Territory and exclusivity. Grant exclusivity by state or sector, tied to minimum purchases; if a target is missed, exclusivity lapses rather than the whole agreement.
• Prices. You may recommend or cap resale prices. Fixing a minimum resale price can breach section 3(4) of the Competition Act where it causes, or is likely to cause, an appreciable adverse effect on competition in India; since 18 May 2023 the rule expressly covers services and any direct or indirect restriction [5][9].
• Brand and IP. File your Indian trademark before the appointment (see trademark application in India for foreign brand owners), license it to the partner, and forbid filings in the partner's name.
• Competition after the end. A restraint on the partner after the agreement ends is void under section 27 of the Indian Contract Act, save on a sale of goodwill [4]; restraints during the term and the alternatives are in non-compete clauses in licence, distribution and joint venture agreements in India
• Termination. Notice and cure periods; buy-back of saleable stock at net invoice price; handover of customer lists, service records, certifications and product registrations.
• Sanctions. If your products are aviation goods, jet fuel, firearms or "common high priority items" under EU sanctions on Russia, an EU exporter must include a "no re-export to Russia" clause with remedies in sales contracts with Indian buyers, as India is not a listed partner country [10]; check the current lists for each product.
• Governing law and disputes. Arbitration under institutional rules with a neutral seat, and a governing law chosen with its consequences in mind. Choosing Spanish law for a commission agent can bring in Spain's agency law (Ley 12/1992), whose rules are mandatory: an agent that brought in customers or grew the business can claim a goodwill indemnity on termination where its work will go on benefiting you substantially and an indemnity is fair, of up to its average annual remuneration over the last five years and within a year; there is none if you ended the agency for the agent's breach [11].

The EU–India free trade agreement affects the distributor's landed price, not the checks. It was concluded on 27 January 2026 but is not yet signed or in force [12]; once in force, India will cut its industrial duties, which average above 16%, with half of machinery tariffs liberalised at entry into force and the rest over up to ten years, and most car-part tariffs over five to ten years [13]. Price on today's duty. UK makers already have the UK–India CETA, in force since 15 July 2026, under which India has removed or reduced tariffs on 90% of its tariff lines for UK products [14].

Worked example (illustrative)

Hypothetical; rounded exchange rates, October 2026: INR 107 = EUR 1. A Spanish maker of hydraulic valve components expects India sales to reach EUR 2.4 million (INR 25.68 crore) a year by year 3 (our assumption). It is choosing between a commission agent and a distributor for western India (see the Spain–India corridor).

The checks. It ran the eight checks on four candidates. One had a cancelled GST registration and another a charge over all its assets registered the previous month; both were dropped (hypothetical). The remaining two were offered either model.

The exit cost after five years. All operating figures are our assumptions.

Average commission: (60,000 + 96,000 + 144,000 × 3) ÷ 5 = EUR 117,600.

What the numbers show. - The agent looks cheaper to run but can cost more to leave if Spanish law governs; with a distributor, the contract fixes the exit cost. - The distributor's stock is an asset you take back, so the real cost is the 15% you cannot recover, not the EUR 300,000. - Neither model survives a weak partner, which is why the checks come first.

Risks and common mistakes, ranked

1. All-India exclusivity with no minimums: one underperforming partner blocks the market.
2. Your trademark or product approvals in the partner's name: you cannot replace it without its cooperation.
3. Appointing on a trade-fair conversation without the public-record checks.
4. No exit mechanics: no stock buy-back, no handover of customers, service records or registrations.
5. Governing law chosen by habit, importing an agency indemnity you did not price.
6. Fixing resale prices instead of recommending or capping them.
7. Missing the "no re-export to Russia" clause for listed products.

Checklist to forward internally

• Partner model chosen: distributor, agent, integrator, contract manufacturer or licensee
• Three to five candidates shortlisted and scored
• MCA master data, filed documents, directors and charges reviewed for each
• GST registration active and returns filed
• Litigation and insolvency searches by Indian counsel
• Owners identified; sanctions screening done; products checked against EU Russia-sanctions lists
• Three references called and a site visit made
• Indian trademark filed in our name before appointment
• Exclusivity tied to minimums; pricing clause reviewed for competition law
• Termination, stock buy-back, handover, governing law and arbitration seat agreed

How ATB Corporate can help

ATB Corporate advises companies and investors on entering, structuring and operating in India and the UAE: choosing the entry route and holding structure, tax and exchange-control planning, regulatory compliance, and setting up and running the local business. To discuss your plans, contact ATB Corporate.

FAQ

How do I find a reliable business partner in India?

The most reliable way to find a business partner in India is to shortlist three to five companies that already sell to your target customers, check each in the public records and against sanctions lists, and take references from customers you choose before granting exclusivity [1][3]. A trade-fair meeting is a starting point, not a check.

How do I check an Indian company before signing a distribution agreement?

You check an Indian company on the Ministry of Corporate Affairs portal (master data, filed documents, directors and registered charges), on the GST portal, through court and insolvency searches, and against EU sanctions lists [1][2][3]. Add references and a site visit before you sign.

Should I appoint an exclusive distributor in India?

An exclusive distributor in India makes sense only if exclusivity is tied to minimum purchases and limited to the states or sectors the distributor actually covers. If a target is missed, exclusivity should lapse while the agreement continues.

Should I use a commission agent or a distributor in India?

Use a distributor in India when you want a partner that holds stock, carries the credit risk and services customers itself, and a commission agent when you want to keep the customer contracts and prices in your own hands. The agent is cheaper to run but leaves you with the stock, the credit risk and, if a law such as Spain's governs, a possible goodwill indemnity on termination [11].

Does a commission agent get compensation when the agency ends?

Whether a commission agent in India gets compensation when the agency ends depends on the agreement and its governing law. If Spanish law governs, an agent whose work in bringing or growing business keeps benefiting you can claim a goodwill indemnity of up to its average annual remuneration over the last five years, within one year of termination, unless you ended the agency for its breach [11].

Can I set the resale price my Indian distributor charges?

You can recommend or cap the resale price your Indian distributor charges, but fixing a minimum resale price can breach section 3(4) of the Competition Act if it causes, or is likely to cause, an appreciable adverse effect on competition in India [5].

Related reading

• Exhibiting at an Indian trade fair: visas, exhibits and turning leads into distributors
• Distribution and channel advisory
• Cross-border trade risk
• Trade, import, export and customs in India
• Automotive and auto components in India
• Industrial machinery in India
• Non-compete clauses in licence, distribution and joint venture agreements in India

Sources

1. Ministry of Corporate Affairs, MCA portal home page, "MCA Services" menu (Master Data: View Company or LLP Master Data, View Index of Charges, View Director Master Data, View Companies/Directors under Prosecution; DIN Services: Enquire DIN Status; Document Related Services: View Public Documents) (as at 20 October 2026) — https://www.mca.gov.in/ (accessed 20 October 2026)
2. Goods and Services Tax Network, GST portal user guide, "FAQs > Search Taxpayers" (search by GSTIN/UIN without login; effective date of registration, date of cancellation, details of returns filed) and "Manual > Search Taxpayers using GSTIN/UIN" (as at 20 October 2026) — https://tutorial.gst.gov.in/userguide/taxpayersdashboard/Search_Taxpayer.htm ; https://tutorial.gst.gov.in/userguide/taxpayersdashboard/Search_Taxpayer_manual.htm (both accessed 20 October 2026)
3. European Commission (DG FISMA), EU Sanctions Compliance Helpdesk, "Resources" (EU Sanctions Map; consolidated list of persons, groups and entities subject to EU financial sanctions) — https://eu-sanctions-compliance-helpdesk.europa.eu/resources_en (accessed 16 October 2026)
4. Indian Contract Act 1872 (Act 9 of 1872), s.27 and Exception 1 (agreement in restraint of trade void; sale of goodwill), text hosted by the High Court of Tripura — https://thc.nic.in/Central%20Governmental%20Acts/Indian%20Contract%20Act,%201872.pdf (accessed 16 October 2026)
5. Competition Commission of India, The Competition Act 2002, s.3(4) and Explanation (e) (resale price maintenance; appreciable adverse effect on competition in India) (2002, as published by the CCI) — https://www.cci.gov.in/images/legalframeworkact/en/the-competition-act-20021652103427.pdf (accessed 16 October 2026)
6. Income Tax Department, "Tax rates — DTAA v. Income-tax Act" (Spain: royalties 10%, fees for technical services 10%) (2026) — https://www.incometaxindia.gov.in/w/%E2%80%8Btax-rates-dtaa-v.-income-tax-act (accessed 16 October 2026)
7. Income Tax Department, Income-tax Act 2025, s.159(8) (tax residency certificate and prescribed information) — https://www.incometaxindia.gov.in/w/section-159-89 ; Income Tax Department, Form 41 FAQs — https://www.incometaxindia.gov.in/documents/d/guest/form-41-faqs (both accessed 16 October 2026)
8. Ministry of Corporate Affairs, "Payment" (viewing public documents once payment is confirmed) — https://www.mca.gov.in/MinistryV2/payment.html (accessed 16 October 2026)
9. Competition Commission of India, The Competition (Amendment) Act 2023 (No. 9 of 2023), s.4 (Explanation (e) to s.3(4) extended to services and to any direct or indirect restriction) (11 April 2023) — https://www.cci.gov.in/images/legalframeworkact/en/the-competition-amendment-act-20231681363446.pdf (accessed 16 October 2026); Gazette of India, S.O. 2228(E), bringing ss.1–5 of that Act into force on 18 May 2023 (18 May 2023) — https://egazette.gov.in/WriteReadData/2023/245953.pdf (accessed 20 October 2026)
10. European Commission, "Frequently asked questions: 'No re-export to Russia' clause, Article 12g of Council Regulation 833/2014" (updated 18 December 2024) — https://finance.ec.europa.eu/system/files/2024-02/faqs-sanctions-russia-no-re-export_en.pdf (accessed 16 October 2026)
11. Agencia Estatal Boletín Oficial del Estado, Ley 12/1992, de 27 de mayo, sobre Contrato de Agencia, arts 3, 28, 30 and 31 (consolidated text, last updated 12 April 2011) — https://www.boe.es/buscar/act.php?id=BOE-A-1992-12347 (accessed 20 October 2026)
12. European Commission (DG Trade), "EU–India agreements" (negotiations concluded 27 January 2026; proposals for signature and conclusion sent to the Council, 11 September 2026) — https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements_en (accessed 16 October 2026)
13. European Commission (DG Trade), "EU–India free trade agreement: chapter-by-chapter summary" (industrial tariffs: machinery, car parts, chemicals) (2026) — https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/india/eu-india-agreements/memo-eu-india-free-trade-agreement-chapter-chapter-summary_en (accessed 16 October 2026)
14. Department for Business and Trade, "The UK–India trade deal" (CETA in force from 15 July 2026; India has removed or reduced tariffs on 90% of its tariff lines for UK products) (as at 20 October 2026) — https://www.business.gov.uk/campaign/alive-with-opportunity/the-uk-india-trade-deal/ (accessed 20 October 2026)

Disclaimer: This article is general information, not legal or tax advice; the worked example is hypothetical, and Indian, EU and Spanish rules change, so check the current position and take advice on your facts before appointing a partner.