To set up a business here, you need to incorporate your business and it will typically require an Indian national as your company signatory. I would recommend that you contact Sannam S4 in Delhi (). They specialize in assisting foreign companies in their market entry process. If you do it incorrectly, you can be in very big and very expensive trouble.
Now, regarding visas, you cannot earn any money on a tourist visa and most tourist visas have a maximum of 180 days in country a year. Same with a business visa. The employment visa requires you to work for an Indian firm who has to sponsor you. While this is difficult to do from the EU, I successfully managed to find a company that was looking for an expert in American revenue generation. They needed a growth hacker to increase their US income. The person who hired me found me on LinkedIn and read my answers to groups focused on Indian dotcoms and we started talking about his issues. I was hired by him 10 years ago, and have worked with five different companies in India since then. It's an expensive hiring decision because you need to apply for your visa in your home country. You cannot do it here.
Now, regarding buying an existing business. There are lots of issues, primarily the Foreign Direct Investment scheme. It changes regularly and many multinationals have been waiting for it to become more clear as to the percentage allowed to be owned for foreign nationals. You may want to google that situation to get more info or contact Sannam S4. They have some great options for getting your feet wet and see if there is a viable market for your products or services before incorporating and investing large sums of money building a business.
Also, Indian nationals who are business owners are very shrewd. One of the most interesting meetings I ever had here was between my Indian colleagues negotiating contracts with a Chinese sales prospect. Talk about negotiating! It was a worthy match of wits. Be prepared for extremely high valuations that have no basis in fact. Be prepared to put everything in writing, which they will not be happy to do, but without it, you're toast. Contracts mean very little here due to the lack of a decent court system capable of enabling you to have recourse. Indian companies will take your business and your money without even knowing how to execute. Here it is called "jugaad", which loosely translates to "by any means necessary" or "winging it".
I don't want to discourage you, but India is not cheap, especially if you expect to live the same lifestyle you were used to back home. When I first got here, I expected to save a lot of money, but buying foreign goods here is exceptionally pricey. Most Indian will go overseas to shop. They save enough on their electronics in Singapore to pay for the flight and hotel.
So come and visit. Check out Gurgaon and Delhi first, then visit Mumbai and Pune, then Bangalore. These are the cities with halfway decent infrastructure and many foreign businesses have their headquarters in these cities. Chandigarh is a great city and has a tech sector, but it will be hard to find employees there with the kind of English skills you may require for your business. Mumbai is the most expensive, salary wise, but they also have the best candidates with experience overseas, very good command of English, others with experience in MNCs. Same with Bangalore. Pune is between Mumbai and Bangalore and is more of a college town, but infinitely more livable than Delhi/Gurgaon. Delhi and Gurgaon gets you close to all the business development NGOs, embassies, etc., but the weather is horrendously hot in the summer (50 degrees C) and cold, foggy and clammy in the winters.
Good luck!
