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Most equipment is locally available and quite cheap. Communications facilities (broadband) are available in most large cities and very inexpensive.
Establishing a company takes about a month or so and should be done thru a local Chartered Accountant (Financial Advisor). The equity outlay for setting up a company can be as low as US$ 2500/- + fees for the Financial Advisor, etc.
Here you will find all the info u need about the opening the office in India.
[edited by: bill at 12:14 am (utc) on Mar. 10, 2006]
[edit reason] fixed link [/edit]