Himachal Pradesh Industrial Investment Policy

Himachal Pradesh, owing to its vast area of land and other striking geographical features, is endowed with natural resources suitable for industrial and other business opportunities. The Industrial Investment Policy was launched in September 2019 to improve the industry sector, especially

• Agriculture
• Horticulture
• Animal Husbandry
• Limestone mines and other related activities in the primary sector

Besides, industries (anchor industries) that have been running for a very long time also have the opportunity to access State Government incentive benefits in a way to ensure financial prosperity and more employment opportunities to the local people.

Vision

• To create an ecosystem compatible with industries
• To improve and increase the scale of economic development
• To provide more employment opportunities
• To ensure sustainable development & balanced growth of industrial & service sectors

Objectives

• To promote ease of doing business (EODB) through digital facility and self-certification
• To serve as a standard for creating a friendly-investment climate for existing industries to prosper
• To attract new investments in the state to create more job opportunities for young people, while keeping the development of Industrial & Service Sector in mind
• To simplify the procedures related to infrastructures, human resource, access to market
• To improve food industry sectors, agriculture, and horticulture in a way to ensure rural prosperity
• To cater to MSME sectors for job opportunities and financial growth across the state and benefit stakeholders
• To encourage start-ups and entrepreneurship to create and generate local businesses
• To encourage large investments to expand the scale of economic development, employment opportunities, revenue generation, and remunerative prices to local resources
• To improve the lifestyle of weaker sections of society

Strategy of the Policy

• To make rules and regulations easy by introducing self-certification, clearances in a timely manner to ensure EODB through the digital facility
• To create and upgrade of existing industrial infrastructures
• To create a private land bank
• To make allowances for incentives and concessions for industries for economic development. This purpose is for the benefit of the majority of H.P natives to achieve economic prosperity.
• To create a favorable environment for:
  • Start-ups
  • Sustaining traditional cottage industries
  • Technological improvement
  • Recovering from industrial weakness
  • Promoting Research and Development
  • Industrial productivity
• To create awareness by giving importance to:
  • Cottage handloom and handicraft industries
  • Rural-based economic sectors like - Food processing, Agriculture, and Horticulture
  • Tourism
• To create an awareness of a clean environment among industries that causes pollution. To insist and encourage industries to go for pollution-free technologies.

Positive Aspects of Investments in Himachal

Regardless of the rough geographical pattern, many investors are enticed because of positive factors like:

• Low-cost quality power
• Harmonious industrial relations
• Low cost of land
• Clean environment
• Investor-friendly administration
• Attractive incentives
• Tax concessions
• Accessibility to northern markets of India

Eligibility for Availing Incentives

• Industrial sectors that eligible for incentives are:
  • All New Industrial Enterprises
  • New Enterprises involved in “Specified Category of Service Activities”
  • All Existing Industrial Enterprises opting for Substantial Expansion
  • All Existing Service Enterprises involved in “Specified Category of Service Activities” opting for Substantial Expansion
• The aforementioned categories of industries are eligible provided:
  1. 2019. Requirements are met with respect to the eligibility criteria & conditions as per the Rules regarding Grant of Incentives, Concessions & Facilities to Industrial & Service Enterprises in Himachal Pradesh, 2019
     2020. Employment is given directly by industries to a minimum of 80% people of Himachal native of all social backgrounds on a regular, contractual-based, etc. (OR)
     2021. Employment is given to 80% of Himachal natives through “contractors” or “outsourcing agencies” at the time of initiating commercial operations (or) during commercial services by the new enterprises established under this policy.
     2022. Additional employment is given to at least 80% of Himachal natives by existing enterprises involved in the substantial expansion.
• Incentives are effected from the day of commencement of industrial operations (OR) from the date of permission given by the relevant or concerned department to incentivize eligible industries.

Incentives for Small and Medium Enterprises (MSME) and Large scale units

• MSME companies (in the case manufacturing enterprises) investing an amount of up to Rs.10 Crore in building plant and machinery in the case of

(OR)

• MSME companies (in the case of a specified category of service enterprise) investing an amount of up to Rs.5 Crore in instruments would be granted to avail financial benefits by the State Government. They are:

1. • subsidy towards the cost of preparation of detailed project report & obtaining certification
   • Incentives related to land and industrial sheds
     • Allotment of land and Industrial Sheds
     • Easy Payment schedule of land or shed premium
     • Provisions of extension in the provisional allotment period
     • Provision to rent out surplus built-up area for industrial use
   • Incentives pertaining to land matters
     • Concessional rate on Stamp Duty and registration fee
     • Exemption from Land Use charges
   • Interest is given as a support by the State Government
   • Assistance for transportation of Plant & Machinery
   • Providing transport subsidy
   • Assistance for the testing facility and quality certification
   • Assistance for set-up pertaining to water conservation, effluent treatment plant, and electrical power supply in compliance with Environment, Health and Safety Standards
   • Net SGST payback
   • Purchase Preference provided an item is not sophisticated, of high technology, and precision standards
   • Incentives also availed to those who come under “special category entrepreneurs” are:

• • • Scheduled Castes
    • Scheduled Tribes
    • Below Poverty Line families
    • Women
    • ex-serviceman
    • people with disabilities
    • People affected by HIV/AIDS
  • single person enterprise run by the aforementioned category of people

Incentives for Anchor Enterprises

Anchor enterprises are those that are:

• First Industrial Enterprise established in an Industrial Area
• Invested with a Fixed Capital of more than Rs.200 Crore
• Providing jobs to more than 200 Himachal native on a regular basis.
• Incentives in the form of concession are provided to enterprises with the rate or premium fixed applicable for:
  • 50%for Industrially developed lands
  • 60%for Industrially developing lands, and
  • 75% for Tribal areas, Industrially undeveloped sectors & panchayats
• These concessionary rates are given to enterprises if they began their operations within 3 years of handing over of possessed  Such enterprises are granted for easy payment of land premium like MSME industries.
• Repayment of Net SGST that was paid to the P. Government as per H.P. GST Act, 2017, for 7 years up to a maximum of 80% of Fixed Capital Investment.
• Stamp Duty & Registration fee pertaining to conveyance deed or lease deed at the rate of:
  • 50% for Industrially developed lands
  • 30% for Industrially developing lands, and
  • 20% for Tribal areas, Industrially undeveloped sectors & panchayats
• Entire costs are reimbursed in the form of incentives for a period of 5 years with reference to the transportation of raw materials and finished goods (within or out of H.P.), the actual expense rate incurred at 5% of the annual income of Rs.30 lakh per year.

Other Incentives

• Assistance for Patent Filing and use of green fuel
• Incentives to EOUs for Promotion of Export
• Approval of industry infrastructure plan
• Concessional rate of electricity charges
• Incentive, concessions, and facilities for creation and upgradation of Industrial Infrastructure by private investors
• Incentives for Handloom and Handicrafts

 List of Specified Category of Service Activities

• Information Technology/Information Technology Enabled Services, BPO
• Warehouse
• Marketing Yard for Fruits & Vegetables Products
• Reefer Vehicle
• Instant Quick Freezing and Irradiation Facilities
• Ripening Chambers
• Cold Chain Facility
• Equipment/Vehicle Maintenance, Repair, and Overhaul (MRO)
• Equipment Rental and Leasing
• Industrial R&D Labs, Industrial Testing Lab
• Laboratories associated with Testing of Raw Materials, Finished Products
• Weigh Bridge
• Designs studio
• Battery Charging Stations for Electric Vehicles
• Packaging activities
• Laundry Services
• Desktop Publishing
• Research and Development/Industrial Testing Facilities
• Photographic Lab
• EDP Institute Established by Voluntary Associations/NGO’s
• Event Management and Audio Visual Services

List of negative-listed industries in the State

Industries categorized under negative list are not eligible to set up in the state. They are:

• Tobacco and Tobacco Products like Cigarettes and Pan Masala
• Thermal Power Plant (Coal/Oil-based)
• Coal Washeries/Dry Coal Processing
• Tanning and Dyeing extracts, tannins and their derivatives, Dyes, Colours, Paints and Varnishes, Putty, Fillers and other Mastics, Inks
• Foundries using Coal
• Minerals Fuels, Mineral Oils, and Products of their Distillation; Bituminous Substances, Mineral Waxes
• Cement Clinker and Asbestos Raw, including Fibre.
• Explosive (including Industrial explosives, detonators & fuses, Fireworks, Matches, Propellant Powders, etc.)
• Mineral or Chemical Fertilizers
• Insecticides, Fungicides, Herbicides & Pesticides (basic Manufacture and Formulation)
• Manufacture of Pulp-Wood Pulp
• Production of Firewood and Charcoal

Contact Information

Department of Industries Location: Udyog Bhawan, Bemloe, Shimla-171001, Himachal Pradesh Email: investments@risinghimachal.in Call: +91177-2813414 HP Investment Cell: +91177-2622059   Confederation of Indian Industry Confederation of Indian Industry, Room # 105 Directorate of Industries Udyog Bhawan, Bemloe, Shimla – 171002 Email: cii.hp@cii.in, manilokeshwar.chauhan@cii.in Call: +91177-2654323, +91172-5022522   More details on the Himachal Pradesh Industrial Investment Policy can be accessed from the below: