MR Talleen Kumar Investment Opportunities in India v3

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Ministry of Commerce and Industry

Department of Industrial Policy and


Promotion
Government of India

Investment Opportunities in India


Investment Opportunities in India
Why India?

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Investment Opportunities in India
Why India?

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Growth drivers
High investment forecasts, rebound in exports, moderation in inflation, falling commodity
prices, and a number of reforms initiated since September 2012 have fuelled global
optimism about India’s investment environment

Fiscal consolidation & reform Growth across diverse sectors


Services 9.0%

Construction 9.1%

 High rate of investment and saving Manufacturing 7.1%

▫ GFCF constitutes 34% of GDP Industry 7.6%

8.0%
 Reducing fiscal deficit GDP
6.7%
Electricity, gas and 7.3%
▫ Central Government deficit to be water supply
4.0%
reduced from 5.3% of GDP in Agriculture

Financial Year 2013 to 3.0% of GDP Mining & Quarrying 5.7%


in Financial Year 2017
0% 5% 10%
 Revenue growth expected to exceed 12th FYP 11th FYP
Source: 12th Five Year Plan, Planning Commission, Government of India
expenditure growth
Infrastructure investment encouraged by
Source: Reserve Bank of India
Source: “Fiscal Policy Strategy Statement,” Union Budget 2013-14, Ministry stable democratic systems will be key drivers
of Finance
for harnessing India’s economic potential
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Encouraging growth trends

With the second largest population in the world,


India presents significant growth opportunities India is expected to become the
enabled by: world’s 3rd largest economy by
2050 34,704
35000
• Large domestic market

India’s GDP (US$ bn in PPP terms)


30000
• Growing consumer economy CAGR
25000 5.5%
• Low labor costs
20000
• Sound legal, financial and banking systems 15000 13,716

• Vibrant, transparent and high yielding capital 10000


market 5000
4,531

• Strong and competitive private sector 0


2011 2030* 2050*
• High export growth (*) estimates

India’s GDP (2011-12) Indian economy projected to grow at 5.8% during


2011-30 and at 5.4% from 2030 to 2050 in Purchasing
Power Parity Terms
Nominal (at constant 2004-5 prices): US$ 1.017
Source: ‘The BRICs and beyond: prospects, challenges and opportunities’,
trillion PwC Economics report, January 2013
Purchasing Power Parity: US$ 1.873 trillion
Source: Reserve Bank of India
Source: The World Bank
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Conducive investment environment


India as a leading investment destination for Proportion of FDI inflows through automatic route
global industry have been increasing
 Top investment destination for long-term
business operations and second most 120%
promising country for overseas business
operations in the medium term according 100%

8%
13%

19%
to 2011 survey of the Japan Bank for

23%
25%

35%

37%
38%
International Cooperation conducted 80%

49%
59%
among Japanese investors
 2nd in terms of future prospects for FDI

86%

86%
87%
87%
60%

90%
91%
inflows according to 2012 A.T. Kearney

92%
87%

81%

77%
75%
Confidence Index after China and followed 40%

65%

63%
62%
by Brazil, USA, Germany, Australia,

51%

41%
Singapore, U.K., Indonesia, Malaysia, 20%

14%

14%
South Africa and Russia

13%

13%

10%

9%
0%
 3rd most attractive destination for FDI
for 2012-2014 according to UNCTAD
World Investment Report 2012
 6th most preferred FDI destination Automatic Route Govt. Route

among developing economies according Source: Reserve Bank of India


to UNCTAD World Investment Report
2012
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Growing investments

Top 10 destinations in
Asia-Pacific in 2011

Number of
Country Thailand: -35%
projects
South Korea: +10%
China 1270
China: +6%
India 869
Singapore 346 Japan: -25%
Australia 289
Hong Kong 203 Hong Kong: +6%
Vietnam 159
Vietnam : -8%
Malaysia 159
Thailand 134 India: +21%
Japan 120 Australia: -8%
South Korea 116 Singapore: +7%

Other 665
Malaysia: -11%
Total 4330
*Map shows percentages between 2010-11
Source: The fDi Report 2012
Source: The fDi Report 2012
Investment Opportunities in India
An attractive investment destination

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

National Manufacturing Policy

Policy instruments Objectives

• Establishment of National Investment


and Manufacturing Zones as
standalone integrated industrial
townships, benchmarked against the
• Increase share of manufacturing
best manufacturing and investment
sector in India’s GDP to 25% by
destinations in the world
2022
• Rationalize and simplify business
regulations • Create 100 million additional jobs
in the process
• Simple and expeditious exit mechanism
for nonviable units • Enhance level of domestic value
• Industrial training and skill upgradation addition
measures
• Enhance global competitiveness
• MSME development of Indian manufacturing
• Incentivizing “Green” manufacturing
practices and technology development
• Technology Acquisition Development
Fund (TADF) and Patent Pool
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

National Manufacturing Policy


Integrated industrial
Government of India to bear cost townships – at least 5000
of: hectare
 Master planning Land use – State-of-art
based on infrastructure
 External link infrastructure
zoning
 Institutional infrastructure -
vocational training; design; quality
At least 30% total
Funding of internal infrastructure land area – National
Investment and Clean, energy
in NIMZ: manufacturing
Manufacturing efficient
 Viability gap funding – existing units technology
Zones
scheme of the Ministry of Finance
 Long term non-sovereign soft Management by
loans from multilateral financial SPV
institutions – assistance for Social
negotiating with back-to-back Skill development infrastructure
support. facilities
 External Commercial Borrowing –
developer to be allowed ECBs for Ownership: State
refinancing of rupee debts Government to adopt a
workable model
Eight NIMZ’s will be established in the Delhi Mumbai Industrial Corridor and four more are being
established outside of DMIC. Two in Andhra Pradesh (Medak and Chittur), Tumkur in Karnataka, and
one near Nagpur in Maharashtra
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

National Manufacturing Policy

Special Focus Sectors


A Industries with Strategies Significance
Industries where India enjoys a
1 Defence Equipment C
competitive advantages
2 Aerospace 10 Automobiles
3 Shipping 11 Pharmaceuticals and Medical Equipment
4 IT Hardware, Electronics Telecommunication
5 Solar Energy D Employment Intensive Industries
12 Textiles And Garments
B Capital Goods Industries 13 Food Processing Industries
6 Machine Tools 14 Leather And Footwear
7 Earth Moving and Mining Equipments 15 Gems And Jewellery
8 Heavy Electrical Equipments
9 Heavy Transport E Public Sector Enterprises

Benefits under
NMP
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

National Manufacturing Policy

An India-Japan Working Group for cooperation on National Manufacturing Policy has


been constituted

The Road Map to discuss cooperation in the implementation of National Manufacturing Policy
and establishment of NIMZs has been put in place:
 METI and JETRO will offer the Indian government the opportunity to present the NMP
including NIMZ to Japanese manufacturing companies
 JETRO will gather needs and request of Japanese manufacturing companies on NMP
including NIMZ and industrial human resources
 JETRO will send to India a mission consisting of Japanese manufacturing companies for
business matching
 NEDO will be invited to Green Manufacturing Committee to share the experience of
installing “Clean and Green” technology in India and present its view on technology
development
 DIPP, relevant Ministries in charge of individual industries such as the Ministry of Heavy
Industry and Public Enterprises and the Manufacturing Industry Policy Bureau of METI, will
explore and address industry-specific issues
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Delhi Mumbai Industrial Corridor

To create a strong economic base with a globally competitive environment and state-of-
the-art infrastructure covering Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan,
Gujarat and Maharashtra
• Implementation fund of Rs.17,500 crore; additional Iconic of India’s global and strategic
project development fund of Rs.1000 crore partnership with Japan. Conceived as a
symbol of Indo-Japan strategic partnership
during the visit of the Hon’ble Prime Minister
• Key foundational concepts of sustainable development of India to Tokyo in December, 2006. A
 Reduction of commute time for workforce (MOU) was signed between Government of
India and Government of Japan to promote
 Neighborhoods distributed around high-access Mass Japanese investments in India and explore
Transit Corridors will encourage cycling & pedestrian opportunities for mutual cooperation as part
modes over cars of Special Economic Partnership Initiatives
under the Comprehensive Economic
 Recycling and reuse of water and solid wastes Partnership Agreement (CEPA)’
 Energy sufficiency through use of renewables
 Conservation of agricultural land and protection of
sensitive natural environments
 Smart community initatives
 Integration of existing villages into new cities
 SMART City: IT-based real time Control and
Governance. . Four Japanese Consortia are working in
partnership with DMICDC to develop and implement
Smart City practices.
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Delhi Mumbai Industrial Corridor

Major milestones and achievements


• Project implementation fund was set-up as a Trust in September 2012, which
can be used to leverage international long-term capital investments
• 8 industrial cities have been taken up for development
 6 gas-based power plant projects
 Solar power projects in Rajasthan and Gujarat
 3 multi-modal logistic hubs
 3 Exhibition-cum-Convention Centers
 26 early-bird projects & 9 smart community projects
• Japanese Government also announced their financial support of US$ 4.5 billion
for projects with Japanese participation in the first phase
 JBIC’s equity participation in DMIC of 26% has been finalized
 Feasibility studies conducted at 4 sites by Japanese consortia, and a fifth
has been initiated by METI
 Presence of Japanese companies in DMIC: 719 sites (369 manufacturing
sites) in 2011 growing from 344 sites (187 manufacturing sites) in 2008
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Rajasthan Haryana

 Neemrana (Reference)  Neemrana ②  Manesar NEDO ①


(under
 Hitachi, Itochu NEDO  Mitsui & Co., KEPCO  Toshiba study)
 Model project for micro-grid  Efficient and stable supply of  Energy management
system using large-scale PV power high-quality electricity in an industrial system with high-efficient
generation and related technologies. park. gas cogeneration systems
Gujarat
Maharashtra
 Sanand ⑥
 Schendra ⑦
 Mitsubishi Heavy Industries,
 JGC corporation,
Mitsubishi Co, others
Delhi Mitsubishi Corp, others
Smart community platform in
 Smart energy & water
industrial parks including water
service station for industrial
solutions, transportation and so
& urban development.
on. Ahmadabad
 Dahej ⑤

Kolkata
 Pune JBIC(under study)
 Hitachi, Hyflux, others  Mitsubishi Corporation
Water desalination system & grand Mumbai
 Gas-based IPP project
designing for smart community at with high-efficient combined
industrial park. cycle power producer.
JBIC(under study)

 Gujarat state ④ DMIC states


Chennai

 Hitachi  NEC
Power system stabilization for Constructing the smart
renewable energy introduced on a logistics system(Logistics
large scale. Dedicated Freight Corridor Data Bank).
JICA(under study)
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Chennai Bengaluru Industrial Corridor

• Joint effort with Japan International Cooperation Agency (JICA) to boost manufacturing and
investments in the region
• The area between Chennai and Bengaluru has witnessed significant growth and
investments, with an increasing number of Japanese companies, including SMEs, making
direct investments to establish manufacturing bases and other forms of business presence.
• Chennai Bengaluru Industrial Corridor (CBIC) is an attempt to strengthen efforts to
improve infrastructure such as ports, roads, industrial parks, rail connectivity and
supporting facilities in Ennore, Chennai and adjoining areas.
• Over 90 projects identified for de-bottlenecking infrastructure in the surrounding areas,
of which 26 will be taken-up on priority
• Japan intends to extend financial and technical support to the preparation of Perspective
Plan and Integrated Master Plan of this region, based on which planned development and
work on related facilities will be taken up expeditiously.
• JICA undertook the Preliminary Study for Perspective Plan and Integrated Master Plan on
de-bottlenecking infrastructure for CBIC between May – September 2012. Terms of
reference for perspective planning and master planning finalized.
• CBIC will cover three states: Tamil Nadu, Andhra Pradesh and Karnataka
Investment Opportunities in India
An attractive investment destination

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

India and Japan’s long and cooperative relationship

• India is the only country with which Japan has annual Prime
Ministerial level Summits
• Nearly 1000 Japanese affiliated companies are operating in
India; an average of 10 new Japanese companies enter the Indian
market every month and expected to grow rapidly in the coming In its 2012 survey,
years JBIC rated India as
the most
• In December 2006, Prime Minister Manmohan Singh’s visit to promising country
Japan culminated in the signing of the joint statement towards for overseas
India-Japan Strategic and Global Partnership business from long
• In February 2011, India and Japan signed the historic term perspective
Comprehensive Economic Partnership Agreement (CEPA), and second-most
which covers areas such as trade in goods, services, investments, promising country
Rules of Origin, Intellectual Property Rights and movement of from medium term
natural persons. CEPA aims at eliminating tariffs on about 94% perspective
goods being traded between India and Japan over a period of 10
years
• Japan-India Business Leaders’ Forum (IJBLF) was announced
during Indian Prime Minister’s visit to Japan in December 2006
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Foreign Direct Investment from Japan


• In 2010 and 2011, Japan emerged as India’s Leading Japanese companies in
second-largest investor, in terms of the number of India
projects and jobs created
• The country accounted for 11% of the investment
projects (448), with more than 152,280 jobs created in
India between 2007 and 2011.
• Presence of Japanese companies in India has
increased from 555 sites in 2008 to 1422 sites in 2011
and is expected to reach 2500 sites by 2015
• Focus sectors for investments from Japan to India:
automotive manufacturing and industrial setups,
with focus on heavy engineering and sales, marketing
and support
Vital Statistics on FDI from Japan into India
FDI FDI FDI Change Value (US$ Job
Projects Projects Share (2011 v. million) 2011 creation
(2010) (2011) (2011) 2010) (2011)
88 115 12% 31% US$ 7,634 46,510
Source: fdi Intelligence
Investment Opportunities in India
Attractive investment destination

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Partnership opportunities between India and Japan

• Japan is India’s largest bilateral donor and has Leading sectors attracting
committed Official Development Assistance of over Japanese FDI into India
3.5 trillion Yen for development of India’s infrastructure,
environment and social sectors. Delhi Metro is the % total
most visible example of Japanese ODA Sector Japanese
FDI
• Compatibilities between India and Japan: Drugs &
29%
Pharmaceuticals
• Japan is a relatively labor-scarce, capital abundant
country that complements India's rich spectrum of Automobile
16%
human capital Industry
Services Sector 14%
• India's prowess in the software sector lends
Metallurgical
synergy to Japan's excellence in the hardware 9%
Industries
sector
Electrical
5%
• India's abundance of raw-materials and minerals Equipment
matches well with Japan's capabilities in technology Source: DIPP, Ministry of Commerce and Industry
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Partnership opportunities between India and Japan

Opportunities for investments in sectors like: JETRO has progressively


initiated several investment
• Infrastructure, including investments in DMIC and promotion initiatives with
CBIC various State Governments

• Technology and Electronics Hardware Manufacturing Human Resource


(EHM) DevelopmentOverseas Human
Resources and Industry
• Power Development Association (HIDA)
is imparting specific tailor-made
• Metals training to factory workers,
middle management, top
• Renewable energy management in India in DMIC
area. Intensive training in Japan
• Manufacturing is also being imparted for top
level trainees selected by DIPP,
• Automobiles and auto parts DMICDC and CII

• Agro processing and Food processing Pharmaceuticals: Increasing tie


ups between Indian and
• Creative Industries Japanese pharmaceutical firms
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Investment opportunities in Infrastructure

• Total investment envisaged of over US$ 1 Trillion between 2012 -17 in India’s infrastructure
sector, increasing from US$ 441 Billion in the 11th Five-Year Plan
• Share of private investment to increase to 48% from 37% in the 11th Plan.

Projected Investment in Infrastructure (US$ billion)


Sectors 11th FYP 12th FYP
Electricity 132 273
Renewable energy 16 58
Roads & Bridges 82 166
Telecommunications 70 172
Railways 37 94
MRTS 8 23
Irrigation 44 92
Water Supply and sanitation 22 46
Ports (IL&W) 8 36
Airports 7 16
Oil & Gas pipelines 11 27
Storage 3 11
Total 441 1014
Source: 12th Five Year Plan, Planning Commission, Government of India
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Investment opportunities in Technology

India’s focus on innovation Special Focus Areas


 Building conducive supply-chain
• To evolve a new Science, Technology and
ecosystem around semiconductor
Innovation policy.
fabricator units
• S&T to be an integral component of  Special Incentive packages put in place
national development. for electronic manufacturing clusters
(EMCs)
• To increase full time
researchers/scientists from 1.54 lakh to Departments coordinating efforts
2.5 lakh.
 Department of Science & Technology
• To increase global share of publication
 Department of Biotechnology
output in basic research from 3% to 5%.
 Ministry of Earth Sciences
• To increase R&D expenditure from 1% of
GDP to 2%.  Department of Scientific & Industrial
Research-including CSIR
• To earmark 10-15% of public investment
for (PPP) R&D for private sector through  Department of Space
grants with matching inflow from the private
sector.  Department of Atomic Energy
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Partnerships in Creative Industry

Japan and India’s Vision Document issued on 28th December 2011 aims at strengthening
the countries’ cooperation in creative industries, such as design, apparel, fashion, food,
house-hold goods, music, movies, animation and traditional craft

Activities include:
• Promotion of industry cooperation such as:
▫ Japan External Trade Organization(JETRO) and the related organizations in India to
cooperate in B2B matching of Japanese and Indian Creative Industries
▫ Promotion of the “Good Design Award” in India where the “India Design Mark” was
launched successfully in January 2012, by the India Design Council (IDC) in cooperation
with the Japan Institute of Design Promotion (JDP) and India Design Mark Exhibition.
▫ Collaboration of Japanese and Indian fashion designers, apparel & textile, craft and
household products manufacturers.
▫ Collaboration between Japanese and Indian content industries including co-production of
animations and films and on-location shoots.
• Improvement of business friendly regulatory environment in both countries; and,
• Promotion of mutual understanding at grass-roots level such as the Cool Japan Festival held
in March 2012 in India and similar events in Japan.

Six MOUs signed between Japanese companies and Indian companies in areas such as
traditional/regional products, animation, apparel/fashion, lifestyle/luxury products and
food
Investment Opportunities in India
Attractive investment destination

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan-
Growth Investment FDI policy Facilitating
Why India? India
enablers opportunities revisions investments
relations

Recent developments in FDI Policy

To harness and encourage greater integration with the global economy, India’s FDI
policy was liberalized in 2010

100% FDI in single-brand


• Only proposals involving total foreign equity inflows retail trading
over Rs. 1200 crore now need to be placed before the
Cabinet Committee on Economic Affairs for consideration,
as opposed to earlier limit of Rs.600 crore
51% FDI in multi-brand retail
• Removal of the condition of prior approval in case of
trading
existing joint ventures and technical collaborations in
the ‘same field’
• FDI in Limited Liability Partnerships permissible
49% FDI in power exchanges
• Construction-development activities in the education
sector and geriatric care are exempt from general
conditions (such as minimum area to be developed;
minimum capitalization and lock-in period) usually Foreign airlines permitted to
applicable to the construction-development sector invest up to 49% in scheduled
and non-scheduled air
• Liberalization of FDI in broadcasting sector
transport services
Investment Opportunities in India
Attractive investment destination

Growth enablers

India-Japan: A Strategic and Global Partnership

Investment opportunities

Recent developments in FDI policy

Facilitating investments
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Cabinet Committee on Investments


Constituted on 2nd January, 2013, the newly-formed Committee is chaired by the Hon’ble
Prime Minister and serves the following functions:
 To identify key projects required to be implemented on a time-bound basis, involving
investments of Rs. 1000 crore or more, or any other critical projects, as may be specified by
the Committee, in sectors such as infrastructure, manufacturing, etc.;
 To prescribe time limits for issue of requisite approvals and clearances by the
Ministries/Departments concerned in respect of projects in identified sectors;
 To monitor the progress of identified projects including the time prescribed/taken to
obtain each approval/clearance and delays, if any;
 To review implementation of projects, that have been delayed beyond the stipulated
timeframe, including issues causing delay in grant of clearances/approvals;
 To review the procedures followed by Ministries/Departments to grant/refuse approvals
and clearances;
 To take decisions regarding grant/refusal of approval/clearance of specific projects that
are unduly delayed, if deemed necessary;
 To consider and decide measures required for expeditiously granting/refusing followed by
the respective Ministries/Departments for decision making; and
 To require statutory authorities to discharge function and exercise powers under the
relevant law/regulation within the prescribed time frames for promoting investment and
economic growth
Japan- FDI
Growth Investment Facilitating
Why India? India policy
enablers opportunities investments
relations revisions

Investor support
License and permit wizard, online filing of applications
Investment conceptualization and hand-holding
for clearances & approvals, making payments

Invest India E-Biz Mission Mode Project


• A joint venture between the Government of • Online single window system for
India through DIPP, FICCI and State businesses and investors under National
Governments established in September e-Governance Plan that will make all
2009 business- and investment-related
• Dedicated agency for promoting foreign regulatory services across Central, State
investment and Local governments available on a
single portal
▫ Investment promotion through creation
of country-focused initiatives • Will eventually cover the entire life cycle
▫ Promotional effort abroad with of a business
structured programs and business • Customer-centric approach with 24x7
meetings facility for information and services
▫ One-stop shop for hand-holding and
facilitation services across the • Soft launch carried out in January, 2013
investment and business spectrum
▫ Spearhead investment promotion in a
focused and structured manner
Q&A
Benefits under National Manufacturing Policy
 Venture Capital Funds with a focus on SMEs in the manufacturing sector, will be granted tax
pass-through status;
 A separate fund will be created with the Small Industries Development Bank of India (SIDBI)
using the shortfalls against MSE credit targets for commercial banks;
 Rollover relief from long term Capital Gains Tax will be provided to individuals on sale of a
residential property whenever such sale consideration is invested in the equity of new start-
up SME company in the manufacturing sector for the purchase of new plant and machinery;
 Liberalisation of banking norms for banks investing in Venture Capital Funds with a focus on
SMEs in the manufacturing sector will be taken up in consultation with the RBI;
 Liberalisation of IRDA guidelines for insurance companies investing in Venture Capital
Funds with a focus on SMEs in the manufacturing sector will be taken up in consultation
with the IRDA;
 Cost of placement cells in an ITI set up in a NMIZ will be provided by the Central
Government for the first five years;
 Polytechnics and SPV in NMIZ will be provided Viability Gap Funding by the Central
Government for covering the capital costs as per VGF guidelines of the Ministry of Finance
 The Government will provide weighted standard deduction of 150% of the expenditure
incurred on PPP projects for skill development (such as private institutions, ITIs) in
coordination with the National Skill Development Corporation;
Cont’d 
Benefits under National Manufacturing Policy
 All buildings with more than 2000 sq meter of built up area in a NMIZ which obtain green
rating under the Indian Green Building Council (IGBC)/ Leadership in Energy and
Environmental Design (LEEDS) or Green Rating for Integrated Habitat Assessment
(GRIHA) systems will be eligible for an incentive of Rs 2 lakhs;
 Units practicing zero water discharge will be eligible for 10% one time capital subsidy on the
relevant equipment/systems subject to actual usage for one year and third party
certification;
 The SMEs will be provided 25% of expenditure incurred on water audit subject to a
maximum of Rs 1 lakh;
 The SMEs will be provided 25% of expenditure incurred on environmental audit subject to a
maximum of Rs 1 lakh;
 SMEs will be able to access the patent pool and/or part reimbursement of the technology
acquisition costs upto a maximum of Rs 20 lakhs for the purpose of acquiring patented
technologies; and
 Incentives consisting of five percent interest reimbursement of the nominal interest charged
by lending agency and ten percent capital subsidy will be provided for production of
equipment/ machines/ devices for controlling pollution, reducing energy consumption and
for water conservation out of the Technology Acquisition and Development Fund (TADF).

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