Tamil Nadu Industrial Policy

The Tamil Nadu has always been at the forefront of economic growth in the country. The Government has made impressive strides in the field of automobiles, engineering, textiles, leather, Information Technology, electric hardware and hi-technology industries over the years. Therefore, to maintain its position as a progressive State, the Government has formulated Tamil Nadu Industrial Policy, which aims at providing the necessary infrastructure to ensure sustained industrialisation in Tamil Nadu. In this article, we look at the Tamil Nadu Industrial Policy in detail. Also, read about Punjab Industrial and Business Development Policy

Objectives

The following are the primary objectives of the Tamil Nadu Industrial Policy:

To obtain an annual average growth rate of 14% in the Tamil Nadu manufacturing sector.
To achieve sustainable industrial development and create gainful employment opportunities in the state of Tamil Nadu.
To enhance the growth of high technology industries including aerospace, nanotechnology etc.,
To achieve rapid industrialization of the Southern districts of Tamil Nadu.
To build world-class infrastructure for the industry.
To make Tamil Nadu the innovation hub, on the strength of world-class institutions in various fields.

Focus Sectors

The following are the sectors that will be supported under the Tamil Nadu Industrial Policy.

Automobile and Auto components sector
Renewable Energy Equipment manufacturing Industries
Biotechnology and Pharmaceuticals Sector and
Aerospace Industry

Ineligible Sectors

The following are the list of industries ineligible for incentives under this policy.

Sugar mills
Edible oil industries
Rice, wheat and flour mills
Mineral water and aerated soft drinks
Alcoholic beverages
Fertiliser and animal feed manufacture
Mining and beneficiation
Steel re-rolling, steel fabrication, stainless steel utensils
Tobacco processing, cigarette or Beedi manufacture
Timber or wood processing
Servicing or repair facilities
Services sector
Cement Industry
Power Generation Projects
Any other industries as specified by Government

Implementing Agency

Under this policy, State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and Tamil Nadu Investment Corporation (TIIC) which act as the nodal agencies for the various incentives listed out in this policy.

Incentive Offered

The assistance provided under the Tamil Nadu Industrial Policy are listed below:

Labour Sector Incentive

Under Labour sector incentive, flexibility in labour laws will be adopted for the welfare of labour. The flexibility in employment working conditions which includes working hours for women, 24x7 services (3 shifts), employment of women employees in the night shifts and flexibility in hiring contract labour will be allowed. Subsidy for Patent Registration/Quality Certification The cost for filing a patent application will be reimbursed to the industrial units with the limit of Rs. 1 lakh per patent registration or any other national or international certification. Subsidy for Training The Government will provide subsidy for training in the form of incentive to improve the skills and generate employment opportunities. Incentives for Manufacturing Sectors The manufacturing units mentioned above are eligible for incentives under this policy. The districts of the state are categorised as given below:

Category A - Chennai, Kancheepuram and Tiruvallur (3 districts)
Category B - Other than A & C (20 districts)
Category C - Madurai, Theni, Dindigul, Sivagangai, Ramanathapuram, Virudhunagar, Tirunelveli, Thoothukudi and Kanniyakumari (9 Southern districts)

Subsidy for Mega Project Super Mega Project-A means manufacturing project, new or expansion, Placed in A & B category districts with the below-following investment ranges and creating the employment:

Category	Investment Range (Rs. in crore)
A	B
Mega Projects	Rs. 500 to 1500 crores if creating employment of 300 in 3 years	Rs. 350- 1000 crores if creating employment of 200 in 3 years

Subsidy for Super Mega Project-A Super Mega Project-A means manufacturing project, new or expansion, placed in A & B category districts with the below following investment ranges and creating the employment:

Category	Investment Range (Rs. in crore)
A	B
Super Mega A	Rs.1500 to 3000 crores if creating employment of 400 in 5 years.	Rs. 1000 to 2000 crores if creating employment of 300 in 5 years.

Subsidy for Super Mega Project-B Super Mega Project-B means manufacturing project, new or expansion, placed in A & B category districts with the below following investment ranges and creating the employment:

Category	Investment Range (Rs. in crore)
A	B
Super Mega B	Rs. 3000 to 5000 crores if creating employment of 600 in 6 years.	Rs. 2000 to 4000 crores if creating employment of 500 in 6 years.

Ultra Mega Project Ultra Mega Project means manufacturing project, new or expansion, placed in A & B category districts with the below-following investment ranges and creating the employment:

Category	Investment Range (Rs. in crore)
A	B
Ultra Mega	Rs. 5000 crores if creating employment of 700 in 7 years.	Rs. 4000 crores if creating employment of 600 in 7 years.

Standard Incentives

The industries which fall under the categories A & B districts will be eligible for the following standard incentives: Reimbursement of Capital Investment The manufacturing units located within the SIPCOT industrial parks will be provided with an additional capital subsidy of 50% of the total cost of the project. Stamp Duty Concession The subsidy of 50% of the stamp duty and transfer duty will be remitted by the government on the purchase of building or land by the A and B category districts for industrial use. The subsidy of 100% will be reimbursed in case of ultra mega projects. Subsidy for Power Supply The uninterrupted power supply will be given to the projects belonging to the category C if Government Order or MoU covers them.

Special Package of Incentive

To encourage new investments in the existing or new SIPCOT Industrial Parks in Southern Districts, Government has recently declared a special package of incentives covering allotment of lands in SIPCOT Industrial Parks at a subsidised rate, stamp duty concessions, additional capital subsidy, special fiscal incentives.

Other Incentives

SIPCOT will acquire and allocate lands for starting new industries in Southern Districts when lands in SIPCOT parks are not available. To avail, this incentive the minimum area required by the investing company should be at least 25 acres, and the range of investment should be more than Rs.50 crores. Note: The land requirement with more than 10% of wetlands will not be allowed.

Back to Learn

Frequently Asked Questions

Common questions about Tamil Nadu Industrial Policy for Economic Growth.

The primary objectives of the Tamil Nadu Industrial Policy are to achieve an annual average growth rate of 14% in the manufacturing sector, ensure sustainable industrial development and create gainful employment opportunities, enhance the growth of high-technology industries, achieve rapid industrialization of the Southern districts, build world-class infrastructure, and make Tamil Nadu an innovation hub leveraging its world-class institutions.

The sectors eligible for incentives under the Tamil Nadu Industrial Policy include automobile and auto components, renewable energy equipment manufacturing, biotechnology and pharmaceuticals, and the aerospace industry.

The industries ineligible for incentives under this policy include sugar mills, edible oil industries, rice/wheat/flour mills, mineral water and aerated soft drinks, alcoholic beverages, fertilizer and animal feed manufacturing, mining and beneficiation, steel re-rolling, steel fabrication, stainless steel utensils, tobacco processing, cigarette or beedi manufacturing, timber or wood processing, servicing or repair facilities, services sector, cement industry, and power generation projects.

The State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and Tamil Nadu Investment Corporation (TIIC) act as the nodal agencies for implementing the various incentives listed out in this policy.

Under the Tamil Nadu Industrial Policy, the cost for filing a patent application will be reimbursed to industrial units with a limit of Rs. 1 lakh per patent registration or any other national or international certification.

The districts of Tamil Nadu are categorized into three categories for incentive purposes: Category A (Chennai, Kancheepuram, and Tiruvallur), Category B (districts other than A and C), and Category C (Madurai, Theni, Dindigul, Sivagangai, Ramanathapuram, Virudhunagar, Tirunelveli, Thoothukudi, and Kanniyakumari).

For Mega Projects in Category A districts, the investment range is Rs. 500 to 1500 crores with the creation of 300 jobs in 3 years. For Category B districts, the range is Rs. 350 to 1000 crores with 200 jobs in 3 years.

For Ultra Mega Projects in Category A districts, the investment range is Rs. 5000 crores or more with the creation of 700 jobs in 7 years. For Category B districts, the range is Rs. 4000 crores or more with 600 jobs in 7 years.

The uninterrupted power supply will be given to the projects belonging to Category C districts if covered by a Government Order or MoU.

To encourage new investments in existing or new SIPCOT Industrial Parks in Southern Districts, the government has declared a special package of incentives covering allotment of lands at a subsidized rate, stamp duty concessions, additional capital subsidy, and special fiscal incentives.