Microsoft is preparing to finally open a sales subsidiary in India, after more than twenty years of coordinating its sales in the country through various liaisons.

According to several of Microsoft’s sales partners, the company is going ahead with the move after pressure by the government to open such a subsidiary.

“A number of multi-national software companies use tax avoidance schemes. By making Microsoft open a sales subsidiary, the government is hoping that they will pay local and indirect taxes on the software that they sell,” a partner said.

“Local decision making will also become quicker, as they will be ready to change their strategy based on Indian conditions,” the partner added.

Another possible reason, according to one partner, is that it would be used to support the opening of a regional data centre that would offer cloud services.

Next month

Microsoft has formally informed its partners that the subsidiary could be open by next month, and that all new partnership contracts would now be in the name of Microsoft India’s sales subsidiary.

Many of the contracts were usually signed with Microsoft’s Singapore subsidiary.

“Following the change to rupee pricing, this is the next step towards establishing a closer and deeper connect with our partners and customers. We believe this will fuel and will be foundational to our next phase of growth in India,” a Microsoft spokesperson said.