He's an Indian citizen--not a U.S. citizen. I'd appreciate it if you could share any other general best practices with this sort of arrangement as well.
I have established off-shore development relationships with individuals and firms in India, Ukraine, Belarus, Russia and Korea going back to 1996.
You might find it a lot smoother to have them work through an established firm in India that is already set up with all appropriate licenses, tax-reporting, payment systems, and so on.
It can be tricky enough to communicate the software requirements and other specifics of your project without you and them also learning and implementing processes to respect domestic and foreign regulations.
If you'd like more information, feel free to set up a call.