Opening a Transportation Company in India

Updated on Saturday 31st August 2019

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The transportation industry in India is one of the most developed at a global level. This is why it can be an attractive idea to start a company in India as a transportation business. It is also necessary to know that the Indian authorities are actively involved in developing the electric vehicles market segment, in the case in which the investors are interested in incorporating this type of transportation method in their business model. 
 
Depending on the transportation means that will be used in India, different regulations can apply; however, the main rules which regulate the traffic on the Indian roads are prescribed under the Motor Vehicles Act 1988, which can be presented by our team of consultants in company registration in India; our representatives can also help in obtaining the necessary transportation permits, depending on the selected business activity that will be carried out here. 
 

What are the conditions for driving a vehicle in India? 
 

The Motor Vehicles Act 1988 is the rule of law which prescribes the minimum legal conditions that have to be met in order to drive a vehicle in India. This is of high importance for investors who want to start a transportation company here, as the drivers hired by the company should comply with specific requirements. Thus, the drivers of vehicles in India should comply with the below mentioned requirements: 
 
  • all vehicles operating on the Indian roads have to be registered, as stipulated by the Section 39 of the act;
  • the registration of the vehicle has to be concluded where the natural person/legal entity has its permanent residence/place of business;
  • provided that a vehicle has a joint ownership, it is sufficient that only one of the owners handle the registration procedures;
  • it is legally required to be the holder of a driving license in order to drive in India;
  • the minimum legal age at which a person can apply for a driving license is 18 years;
  • in the case of drivers driving transport vehicles, their minimum age has to be 20 years. 
     

Types of transport vehicles in India
 

As stipulated by the provisions of the Motor Vehicles Ac 1988, vehicles in India are divided between transport vehicles and non-transport vehicles. In the case of transport vehicles, the Indian legislation defines the following types of vehicles: public service vehicles, educational institutional buses, vehicles used for the carriage of goods, private service vehicles and vehicles used for the transportation of passengers
 
Public service vehicles refer to those that are used for the transportation of persons and they can take the form of taxies, maxi cabs, motor cabs and others. The private service vehicle defines a type of transportation vehicle that is used for the carriage of more than six persons. At the same time, transportation vehicles in India also refer to three wheeled vehicles, tankers, trucks and others.  
 

What are the requirements for starting an Indian rental transportation business? 
 

One of the ways for starting a company in India in this industry is by opening a rental business for the transportation of persons. In this case, the company will provide rental services of various types of motor vehicles to natural persons or to other companies, with the purpose of using them for a given purpose and a for a given period of time; our team of consultants can provide more details on starting a company in India in the rental sector.  
 
The procedures that have to be followed in this case are prescribed under the Rent a Motor Cycle Scheme 1997. In this case, the company is legally responsible for obtaining a license that will allow the right to rent, this being a compulsory procedure for company formation in India. The document must be obtained from the State Transport Authority, which will issue the document for a period of five years. 
 

What is the current state of the Indian transportation market?
 

India has one of the most extensive networks of roads in the world, the transportation system being an important pillar of the country’s economy. The local authorities, through the Union Minister of State for Road, Transport and Shipping, have announced further investments in the road system and the shipping industry. The Indian transportation system is characterized by the following: 
 
  • the road network in India accounts for more than 5,5 million km;
  • in 2018, the total length of the Indian highways reached 122,434 km;
  • by 2022, the Indian authorities have planned to build 200,000 km of national highways;
  • approximately 90% of the Indian passenger traffic is done by using the road network;
  • 64,5% of all the goods that are traded in India are transported through the road system
     
Businessmen are invited to contact our team of specialists in company formation in India for more information on the transportation law applicable here; our representatives can provide advice on how to form a company in India and can also assist with advice on the documents that have to be submitted when applying for transportation licenses