MOOWR: Tax benefits for foreign investors that want to manufacture in India

The ‘Manufacturing or Other Operations in Warehouse Regulations’ (MOOWR) is a comprehensive set of guidelines published by the Indian government to encourage foreign investment in the country. This scheme offers several benefits to international companies that want to set up manufacturing or assembly units in India. In this article, we list the main benefits of the MOOWR programme for foreign companies.

Easier access to the Indian market through MOOWR

The MOOWR scheme can be an attractive option for international companies that want to enter the Indian market. It gives international companies the option to easily set up manufacturing facilities in India, thereby reducing their dependence on importing products or semi-finished products and directly taking advantage of the many favourable tax schemes for international companies that manufacture in the country.

Deferral of payment of import duties

Under the MOOWR scheme, international companies can import raw materials, semi-finished products and (capital) goods without paying import duties in advance. Import duties only have to be paid when the finished products are exported or sold domestically. The deferral of import duty payments can significantly reduce the initial capital costs for international companies, allowing them to invest more in their manufacturing operations during this initial phase.

Streamlined customs procedures

The MOOWR program simplifies customs procedures for importing goods into India for manufacturing or assembly purposes. There are fewer documentation requirements, fewer physical inspections and faster product clearance times. The simplified rules also enable international companies to reduce their administrative burden and operational costs.

MOOWR offers companies the opportunity to easily manufacture in India

Under the MOOWR scheme, international companies can carry out a wide range of production and other activities within the bonded warehouses, including assembly, processing, packaging and testing. This means that there is no need to set up a factory of their own, as the scheme allows international companies to lease or rent production locations within existing bonded warehouses or to establish a bonded warehouse themselves on their existing premises. This flexibility gives European companies more control over their production processes, as these do not necessarily have to be outsourced to a third party.

Exporting without barriers

Unlike other schemes, MOOWR does not impose specific export obligations when the European company imports into India. This gives international companies more flexibility in their export plans and the opportunity to focus on markets where they see the greatest potential for growth and profitability. India’s strategic location offers European companies access not only to Asia, but also to Oceania. By establishing a presence in India through the MOOWR scheme, European companies can expand their reach and enter new markets.

Working together to grow faster in the Indian market

The MOOWR programme promotes collaboration between European and Indian companies and creates opportunities for joint ventures, partnerships and knowledge sharing. European companies can benefit from the expertise, market knowledge and local networks of Indian companies, making it easier to enter the market and expand in the long term. By working together, European companies can gain a better understanding of Indian consumer preferences, cultural nuances and business practices, so that they can tailor their products and services accordingly.

India is one of the fastest growing economies in the world and the MOOWR programme provides European companies with a relatively easy way to take their first steps into the dynamic Indian market. The MOOWR scheme is attractive to all European companies that want to set up manufacturing operations in India. Curious about the specific benefits for your sector or company?