Selling Into India Without an Indian Company Is Legal. Three Thresholds Decide What It Costs.

Canva, Udemy, Blackboard and OVH sell to Indian customers. Each of them was registered for Indian GST by May 2025, among 574 overseas companies on that list. None of that required an Indian company.

Selling into India from abroad is legal and common. What it costs depends on three thresholds most businesses meet without noticing: a tax that starts at the first sale, an income tax test that starts at Rs 2 crore, and a payment cap at Rs 25 lakh.

Sources: IGST Act via India Briefing; CBDT Rule 11UD; RBI PA-CB guidelines via JSA.

Threshold One: GST From the First Sale

Indian GST treats software, streaming, online courses, cloud storage and most other services delivered over the internet as online information and database access and retrieval services, or OIDAR. An overseas supplier selling them to Indian consumers registers through a simplified form, charges 18% IGST and files a return every month. There is no turnover threshold.

The scope widened on 1 October 2023. The old test that the service had to be "essentially automated" with minimal human intervention was removed, and the exemption for sales to government bodies and for non-business use ended. Services that once sat outside the rule now sit inside it.

Which customers are in India is decided by data, not declarations. A customer counts as Indian if any two of seven signals point there, including the card's country of issue, the billing address, the device's IP address and the SIM's country code.

Threshold Two: Rs 2 Crore or 3 Lakh Users

Since assessment year 2022-23, India's income tax law has a test called significant economic presence. A non-resident is treated as having a business connection in India if its transactions with people in India reach Rs 2 crore in a year, or if it systematically engages with 3 lakh or more users in India. Neither test needs an office, a server or an employee in India.

Where a tax treaty applies, its own permanent establishment test also comes into play, and the outcome can differ by country. That interaction is where most of the planning, and most of the risk, sits.

What Is No Longer Charged

India's equalisation levy, once the main tax on foreign digital businesses, is gone. The 2% levy on e-commerce supplies ended on 1 August 2024, and the 6% levy on online advertising on 1 April 2025. GST and the income tax tests above are what remain.

Threshold Three: How the Money Gets Out

Since RBI's October 2023 framework, cross-border payment aggregators must be licensed by RBI, and payments for imported goods and services through them are capped at Rs 25 lakh per unit. Razorpay, Cashfree and Payoneer India are among the providers that have received cross-border approvals.

The payment layer is also becoming the enforcement layer. In 2025, India's GST intelligence directorate was reported to be pressing payment processors to stop settling payments for foreign companies that had not registered for GST, and collecting transaction data from banks to find them.

Why It Is Worth Doing Properly

The market on the other side of these rules processed 24.07 billion UPI payments in September 2026 alone and has 1.11 billion internet subscribers. GST collected on overseas online services rose from Rs 80 crore in 2017-18 to Rs 2,675 crore in 2023-24, a measure of how much more foreign businesses are selling into India.

Whether a particular business crosses the income tax test, which customers trigger GST, how invoices should read, and at what point an Indian company becomes the cheaper option are questions with different answers for an app, a marketplace and a B2B software company. The thresholds are public. Where a given business sits against them is not obvious from the outside.

Part of Naraway's research series India Market Entry in 2026.