1. You shall have to start your business by forming a proprietorship or partnership firm or pvt. ltd. company, 2. You shall have to comply with all the rules and regulations to be followed while conducting business in India viz, opening Bank account, having sale tax & shops & establishment registration, PAN card etc, 3. The procedure proposed to be followed by you for doing the web hosting business by hiring server space from USA company is the usual way to do the same business in India.