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Are State-Level Manufacturing Subsidies Available in Every State?

Yes. All Indian States and Union Territories offer manufacturing incentives under their respective industrial policies.

Although the quantum and eligibility conditions differ, the incentive categories remain largely consistent across states such as Maharashtra, Gujarat, Tamil Nadu, Karnataka, Telangana, Rajasthan, Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, and others.


States typically follow a zonal or district-based framework, where:

  • Developed industrial zones offer limited incentives

  • Semi-developed regions offer moderate benefits

  • Backward or aspirational districts offer the highest subsidy rates


This allows manufacturers to strategically choose locations that maximise fiscal benefits while aligning with business needs.

Key State-Level Subsidies Commonly Available

1. Capital Investment Subsidy

States reimburse a portion of the Fixed Capital Investment (FCI) made in:

  • Land development

  • Factory buildings

  • Plant and machinery


Subsidies typically range from 10% to 25%, and may go up to 30–35% in backward or priority districts.

2. SGST Reimbursement

Instead of tax holidays, states provide reimbursement of State GST paid on sales.

  • Reimbursement usually ranges from 75% to 100% of net SGST

  • Valid for 7 to 10 years

  • Generally capped at 100% of the eligible project cost


This is often the largest financial incentive over the life of a project.

3. Power, Water & Environmental Subsidies

To reduce operating expenses, states provide:

  • Electricity duty exemption for 5–10 years

  • Power tariff subsidies (₹1–₹2 per unit in many states)

4. Land & Stamp Duty Benefits

Manufacturers may receive:

  • 75%–100% exemption or reimbursement of stamp duty and registration charges

  • Full waiver of land conversion charges for industrial use


These benefits significantly reduce upfront land acquisition costs.

5. Interest Subvention

States support debt-funded projects through:

  • 3%–6% interest subsidy on term loans

  • Additional benefits for women-led units, SC/ST enterprises, startups, and first-generation entrepreneurs

6. Employment & Skill Development Incentives

To encourage local hiring:

  • Monthly wage or training subsidies of ₹3,000–₹5,000 per employee

  • Support for skill development programs for 3–5 years

7. Quality, Certification & Innovation Support

States reimburse costs for:

  • ISO, and other quality certifications

  • Patent filing (India and overseas)

  • Technology upgradation and R&D initiatives
     

Frequently Asked Questions (FAQs) for BIS / ISI Certification

Q1. Is BIS / ISI certification mandatory for all products?

No, only specific products listed under the various scheme framework  and QCOs are mandated to be BIS certified.

Q2. What is a quality control order (QCO)?

BIS certification scheme is basically voluntary in nature. However, for a number of products, compliance to Indian Standards is made compulsory by the Central Government under various considerations viz. public interest, protection of human, animal or plant health, safety of environment, prevention of unfair trade practices and national security.

For all such products, the Central Government directs mandatory use of Standard Mark under a Licence from BIS through issuance of Quality Control Orders (QCOs) in exercise of the powers conferred by sub-sections (1) and (2) of section 16 read in conjunction with section 17 and subsection (3) of section 25 of the BIS Act, 2016.

After the date of commencement of the QCO, no person shall manufacture, import, distribute, sell, hire, lease, store or exhibit for sale any product(s) covered under the QCO without the Standard Mark (e.g. the ISI Mark).

Q3. Which products come under BIS / Scheme I?

Examples include electrical appliances, cables, cement, LPG cylinders, medical imaging equipment, steel products, etc. Detail of products which are covered under compulsory BIS certification is available at https://www.bis.gov.in/product-certification/products-under-compulsory-certification/ If your product is in this list, it is compulsory for you to get a BIS licence for it. .

Q4. Can imported goods also need BIS certification?

Yes! imported units of “compulsory certification” products require BIS approval and must carry the Standard Mark to be cleared through customs.

Q5. What documents are required for a BIS application?

Typical documents include product drawings/specifications, bill of materials, test reports from BIS-recognized labs, Quality Manual, factory layout, quality assurance procedures, machinery list, technical file etc.

Q6. What happens if a product fails BIS inspection?

BIS may reject the application, issue non-conformity reports, ask for corrective actions, or suspend / cancel existing license.

Q7. Can the ISI mark be used on non-certified products?

No. Unauthorized use of the Standard Mark is punishable under the BIS Act / rules.

Q8. How often are surveillance audits done?

BIS conducts periodic surprise inspections or audits to ensure continued compliance through the life of the license.

Q9.  Is a foreign manufacturer required to apply for BIS certification?

Yes. Foreign manufacturers should obtain certification under the Foreign Manufacturers Certification Scheme (FMCS) or Scheme-X, depending on the product type. They must appoint an Authorized Indian Representative (AIR) to coordinate with BIS on their behalf

Q10. What are the penalties for selling products without BIS certification?

Selling, importing, or distributing products without mandatory BIS certification is a legal offence under the BIS Act, 2016. It can result in product seizure, monetary penalties, and prosecution. BIS has the authority to take strict action against violators.

How We Help You Access State-Level Subsidies

Understanding state incentive policies requires technical interpretation, precise documentation, and continuous follow-up with authorities. This is where our expertise adds value.

1. Subsidy Eligibility Assessment

 

  • State-wise and district-wise incentive mapping

  • Comparison of multiple locations to optimise subsidy benefits

2. End-to-End Subsidy Application

 

  • Preparation and filing of subsidy applications

  • Documentation support, projections, and compliance filings

3. Liaison & Approvals

 

  • Coordination with State Industries Department, DIC, and nodal agencies

  • Handling queries, inspections, and clarifications

4. Disbursement & Post-Approval Support

 

  • Follow-up for timely subsidy release

  • Ongoing compliance, renewals, and audit

What Are State-Level Manufacturing Subsidies?

State-level subsidies are financial and non-financial incentives provided by State Governments to encourage industrial development, employment generation, and regional economic growth.

These incentives are generally linked to:

  • Capital investment made in land, buildings, and plant & machinery

  • Taxes paid during operations (especially SGST)

  • Utilities such as power and water

  • Employment and skill development

  • Quality certification and technology upgradation

State Level Subisidies

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