Should treasury operations for an India subsidiary be centralized with the parent or run locally?

Global treasury structures often rely on automatic cash pooling — sweeping surplus balances from operating entities into a central account daily or weekly. India's capital account controls under FEMA make this harder to replicate: cross-border cash pooling involving an Indian entity needs to fit within permitted structures and reporting, and isn't a simple extension of a group's existing pooling arrangement in, say, Europe or Southeast Asia.

In practice, most MNCs manage India treasury with day-to-day liquidity handled locally — local banking relationships, working capital, and FX hedging — while repatriation to the group happens on a scheduled basis through dividends, royalties, ECB repayments, or other compliant channels, rather than through continuous automatic sweeps. Building the group's India treasury policy around this constraint from the start avoids trying to retrofit a global cash-pooling model that doesn't fit India's regulatory framework.