In a nutshell, the legal and tax ramifications are that you are subjecting your Indian company to the laws and taxes of the United States. Your branch office in California will be subject to California law (and applicable federal law); and the income earned through the California office will be taxed by the U.S. federal government as well as state and local authorities. In addition, you may run into issues regarding the transfer of funds from the California branch to the overseas parent company. Make sure you speak to attorney and accounting advisors in both India and California who have experience with this sort of situation (overseas parent company/U.S. branch office) to determine the best way to set this up.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.