Government of India has put in place a liberal policy for Foreign Direct Investment (FDI) under which FDI up to 100% is permitted through the automatic route in most of the sectors/ activities but some sectors require prior Government approval for infusing FDI with sector specific conditions. In the last one year Department of Industrial Policy & Promotion (DIPP) embarked upon a number of initiatives with the objective of improving ease of doing business and simplifying the investment process.
Investment allowance (additional depreciation) at the rate of 15 percent to manufacturing companies that invest more than INR 1 billion in plant and machinery available till to 31.3.2015.
Incentives available to unit’s set-up in Special Economic Zones (SEZ), National Investment & Manufacturing Zones (NIMZ) etc. and Export Oriented Units (EOUs).
Exports incentives like duty drawback, duty exemption/remission schemes, focus products & market schemes etc.
Areas based incentives like unit set-up in north east region, Jammu & Kashmir, Himachal Pradesh, Uttarakhand.
Sector specific incentives like Modified Special Incentive Package Scheme(M-SIPS) in electronics.
Central Government Incentives :
Each state government has its own incentive policy, which offers various types of incentives based on the amount of investments, project location, employment generation, etc. The incentives differ from state to state and are generally laid down in each state’s industrial policy.
The broad categories of state incentives include: stamp duty exemption for land acquisition, refund or exemption of value added tax, exemption from payment of electricity duty etc.