Industrial & Trade Policy of India
Objectives of the Industrial Policy of the Government are -
1. to maintain a sustained growth in productivity
2. to enhance gainful employment;
3. to achieve optimal utilisation of human resources
4. to attain international competitiveness and
5. to transform India into a major partner and player in the global arena.
Policy focus is on
1. Deregulating Indian industry
2. Allowing the industry freedom and flexibility in responding to market forces and
3. Providing a policy regime that facilitates and fosters growth of Indian industry.
Some of the important policy measures announced and procedural simplifications undertaken to pursue the above objectives are as under:
• Liberalisation of Industrial Licensing Policy
The list of items requiring compulsory licensing is reviewed on an ongoing basis. At present, only six industries are under compulsory licensing mainly on account of environmental, safety and strategic considerations. Similarly, there are only three industries reserved for the public sector. The lists of industries reserved for the public sector and of items under compulsory licensing are at Appendix III and IV respectively.
• Introduction of Industrial Entrepreneurs' Memorandum (IEM)
Industries not requiring compulsory licensing are to file an Industrial Entrepreneurs' Memorandum (IEM) to the Secretariat for Industrial Assistance (SIA). No industrial approval is required for such exempted industries. Amendments are also allowed to IEM proposals filed after 1.7.1998.
• Liberalisation of the Locational Policy
A significantly amended locational policy in tune with the liberlised licensing policy is in place. No industrial approval is required from the Government for locations not falling within 25 kms of the periphery of cities having a population of more than one million except for those industries where industrial licensing is compulsory. Non-polluting industries such as electronics, computer software and printing can be located within 25 kms of the periphery of cities with more than one million population. Permission to other industries is granted in such locations only if they are located in an industrial area so designated prior to 25.7.91. Zoning and land use regulations as well as environmental legislations have to be followed.
• Policy for Small Scale Industries
Reservation of items of manufacture exclusively for the small scale sector forms an important focus of the industrial policy as a measure of protecting this sector. Since 24th December 1999, industrial undertakings with an investment upto rupees one crore are within the small scale and ancillary sector. A differential investment limit has been adopted since 9th October 2001 for 41 reserved items where the investment limit upto rupees five crore is prescribed for qualifying as a small scale unit. The investment limit for tiny units is Rs. 25 lakhs.