A liaison office is a regulated, non-trading presence a foreign company can set up in India. A sourcing office is the everyday term for any team you place in India to find and check suppliers. Both give you control, and both take time and fixed running costs before they help.
For most importers buying from India for the first time, an agent is the faster route and a liaison or sourcing office is something to consider once volume justifies it. This is general information, not legal advice.
What a liaison office is
Under India's foreign exchange rules, a foreign company can open a liaison office to act as a channel between itself and Indian parties. As we understand the rules, it may represent the parent company and promote import and export, but it may not carry out commercial or trading activity or earn income in India. Its costs are met by money sent from abroad.
Approval is normally sought through an authorised dealer bank, and conditions apply, including requirements on the parent company's track record. The rules, limits and renewal terms change, so check the current position with the Reserve Bank of India and an Indian adviser before you plan around it, as of October 2026.
What a sourcing office means in practice
Many large buyers run a sourcing office through a liaison office, a subsidiary, or a local company contracted to them. The structure differs. The common core is a team of people in India who find suppliers, follow samples, visit factories and report to head office.
What your own office gives you
- A team that knows your product and standards and does not serve other buyers.
- Full control over who is hired and how supplier information is handled.
- A long-term base that can grow into a regional operation.
What it costs you in time and commitment
- Setup takes time: approvals, a registered address, bank arrangements, tax registrations and hiring.
- You carry fixed costs whether you place orders or not, including rent, salaries and compliance.
- A small team cannot be expert in every product, and cannot easily visit factories in several states in one week.
- Local rules on employment, tax and reporting apply, and mistakes are costly.
A simple rule for deciding
An own office makes sense when you expect continuous, high-volume buying across many suppliers for years, and when you have the management time to run it. It rarely makes sense for a first container or for a single product line.
An agent makes sense when you want a result per project: a verified shortlist, checked samples, inspected goods. Our comparison for engineering buyers, a sourcing office in India or an agent, applies the same logic to procurement teams.
Many importers do both over time: start with an agent, learn which suppliers work, then bring the routine follow-up in-house.
Questions to ask yourself first
- How many suppliers will I use in the next two years?
- Do I have someone senior enough to manage an office abroad?
- Can I wait for approvals and hiring before my first order?
- Would a project-based agent give me the same information at lower commitment?
Middle routes between an office and an agent
You do not have to choose between a full office and a one-off agent. Several middle routes exist, and they let you test the market before committing to fixed costs.
- Hire an agent for a defined project and review the results after the first order.
- Place one trusted person in India on a contract and use an agent for audits and loading checks.
- Use an agent on a retainer for a year, then decide whether the volume justifies your own team.
- Visit twice a year with your agent, so you see the suppliers while the routine work is done for you.
What to check about any local partner
If you decide to set up through a local company or adviser instead of your own entity, check the basics. Ask for the company's registration and its tax and GST details, ask who owns it, and ask in writing who will employ the staff and who is responsible for their conduct. A partner that is vague about any of these is asking you to take on risk you cannot see.
Remember also that employing people in India creates obligations of its own. Take advice from an Indian accountant or lawyer before you hire, not afterwards.
How we work
We work across India without asking you to set anything up. We find and audit manufacturers, check samples and documents, supervise production and loading, and book third-party inspection on request at cost, with receipts. If you are deciding between an office and an agent, book a free sourcing review, or read what a sourcing agent in India does.