Can a foreign buyer acquire shares in an Indian company without setting up a new entity?

A foreign company doesn't need an India subsidiary of its own to acquire shares in an existing Indian company — the acquisition happens directly at the shareholder level. What does apply is FEMA's pricing guidelines (the transaction price generally can't be below the fair value determined under the applicable valuation method for share transfers to non-residents), sectoral FDI caps or approval requirements for the target's business activity, and the standard reporting once the transfer completes.

Where a new entity often does come into the picture is not for the acquisition itself, but for how the buyer wants to hold the investment afterward — for example, routing the holding through a jurisdiction with a favourable tax treaty rather than holding directly.