A subsidiary company is a company that is owned or controlled by another company, referred to as the parent company or holding company. In the context of India, a subsidiary company is a company that is incorporated in India and is owned by a foreign or an Indian parent company.

The subsidiary company operates as an independent entity and is responsible for its own profits and losses. However, it is still subject to the control and direction of the parent company. The parent company can exercise control over the subsidiary company through the ownership of a majority of the subsidiary’s voting shares, appointment of directors, and the ability to make decisions that affect the subsidiary company’s operations and management.

Advantages of having a subsidiary company in India include access to the Indian market, reduced trade barriers, and potential tax benefits. Additionally, the subsidiary company can take advantage of India’s skilled workforce and relatively low labour costs.

To establish a subsidiary company in India, the foreign parent company must follow the regulations and procedures set forth by the Indian government, including registering with the Registrar of Companies and obtaining necessary licences and permits.

It’s important to note that the subsidiary company must comply with all Indian laws and regulations, including those related to taxation, labour, and environmental protection. Failure to comply with these regulations can result in penalties, fines, and legal action.