What an EOR Can't Do: The Limits of Employer of Record in India
An EOR handles employment and payroll, it doesn't give you a local entity for contracting, IP ownership, or business licenses, limits that matter once operations go beyond hiring.
An EOR solves the employment problem, it doesn't solve every operational problem that comes with having a presence in India. An EOR-employed team can't sign commercial contracts on your company's behalf (contracts still need to be with your foreign entity or a subsidiary), can't hold business licenses or sector-specific registrations that require an Indian entity, and complicates IP ownership, work product created by EOR-employed staff needs specific contractual assignment clauses to ensure IP flows to the foreign parent, not something to assume happens automatically.
For companies planning to do more than employ people in India, invoice Indian customers, hold local licenses, own India-created IP cleanly, an EOR is a starting point, not an end state.
The practical planning question isn't "EOR or subsidiary" as a permanent choice, it's "how long can we operate on EOR before these limitations start constraining what we actually need to do in India", for most companies planning real India operations, that horizon is 6 to 18 months before a subsidiary becomes necessary.