You can avail industrial subsidies and incentives from both Government of India and respective State Government when you are either setting up a new manufacturing unit or expanding an existing setup.
The subsidies and incentives are dependent on the following factors: –
Industrial category of the products you will be manufacturing in India and the respective Ministry under which you operate
If you are making products meant for Defence & Aerospace applications, you will fall under Ministry of Defence and since there is a major thrust for Make In India, you will be entitled to R&D grant scheme for Make in India for defence products and applications limited a project cost of Rs.50 crore
If you are making pharmaceutical products you will be classified under the Ministry of Pharmaceuticals and the applicable schemes such as capital subsidy for upgradation of manufacturing facility to make it WHO GMP (Good Manufacturing Practices) compliant of 10% of your investment limited to project cost of Rs.10 crore will be applicable for example.
Location of your manufacturing unit
The location of your manufacturing unit is classified by every State Government such as Zone A, B, C and D which signifies whether you are located in an urban area which is highly developed such as Zone A / B or underdeveloped such as Zone C / D
If your unit is located in Zone D, you will have the maximum incentives such as in the case of Government of Maharashtra which provides capital subsidy for food processing units upto 100% if you are located in Zone D/ D+ and the same is only 5% if you are located in Zone A
The products going to be manufactured fall under priority sector list of Central and State Govt.
The Government of India has a list of priority sectors which at present comprises Semiconductors, Electric Vehicles, Defence technologies, Electronics & Mobile Phones etc. which has incentives in the form of research grants, capital subsidy, Production Linked Incentives (PLI) which are high thrust area
Recently Samsung India was to be awarded its first tranche of incentives under the PLI scheme for manufacturing mobile phones in India to the tune of INR 500 to INR 600 crore
Quantum of investment
Depending on the quantum of investment, projects are classified as Large Projects, Mega Projects and Ultra Mega Projects whereby the investment ranges from INR 50 crore to INR 500 crore to classify as large projects by respective State Government
Rajasthan Government classifies any investment above INR 50 crore as a large project and for negotiating a special incentives package the investment value has to be above INR 500 crore
Employment generation
Every Government is concerned about the quantum of employment generation for every project and is one of the parameters based on which the subsidies and incentives are based
For example, Haryana Government has a policy whereby it provides additional incentives also known as booster for manufacturing units generating additional jobs above the prescribed threshold
Impact on the environment and possibility of generating carbon credits
Since achieving carbon net zero is a major target for all major economies and India is also party to the target, any project which is carbon positive can leverage the opportunity of registering its project with one of the leading verifiers such as Gold Standard, Verra etc. and have an opportunity to trade these credits in India
As per the latest norms from Govt. of India, no entity is allowed to export or sell its carbon credit outside India to meet its own targets for which it is also creating liquidity and India Carbon Market (ICM) has been notified which will create a market for buying and selling carbon credits
Import substitution for boosting Make in India initiative
For products which are import substitutes and boost Make in India, Govt. of India has schemes based on priority sectors which includes Production Linked Incentives (PLI) schemes as also specific industry sector schemes as by Ministry of Electronics & Information Technology (MEITY) for electronics manufacturing including the recent support for Semi conductors design, development and manufacturing in India