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Setting up a

Capacitors, Switchgear &


Control Panel
Manufacturing Unit
Heavy Engineering
Government of Gujarat
Contents

Project Concept 3
Market Potential 5
Growth Drivers 6
Gujarat Competitive Advantage 7
Project Information 9
- Location/ Size
- Infrastructure Availability/ Connectivity
- Raw Material/ Manpower
- Key Players/ Machinery Suppliers
- Potential collaboration opportunities
- Key Notes
Project Financials 15
Approvals & Incentives 17

Page 2
Project Concept

Switchgears, control panels and capacitors overview


Switchgears and control panels form a part of power distribution equipment and are widely used
in power grid or electricity distribution systems.
Low-voltage and medium-voltage switchgear are used in many industries such as oil and gas,
and paper and pulp, while high-voltage switchgears are primarily used in power substations.
Capacitors are widely used as parts of electrical circuits in many common electrical devices and
also in power distribution systems.

Transmission Distribution
Generation equipment
equipment equipment

Transformers Switchgears
Boilers
Transmission Control panels
Turbines
line towers Capacitors
Generator
Conductors Wires and cables

Switchgears Control panels/gears Capacitors


Include devices such as Control panels/gears Capacitor is a key passive
circuit breakers, protective comprise a casing or electrical component used
relays and fuses that console that holds the to store energy in electrical
enables the continuous switches, metres, safety and electronic equipment or
electric current transfer and equipment, indicators and devices.
protection against current
warning systems to control Capacitors help to improve
overload, short circuit, and
insulation failure. or monitor a specific device the overall power factor
Types by voltage range or a process. (PF) of the system and form
High voltage (HV) (>36 Kv) They are mostly an an important part of an
Medium voltage (1kv to integrated part of energy efficient system.
36Kv) switchgears and are They are widely used in
Low voltage (<1 Kv) equipped with push buttons consumer electronics,
Types of HV switchgears: and analogue instruments telecom devices, IT
Air-insulated hardware and power
Touchscreen control panels
Gas-insulated distribution systems.
are also gaining popularity.
Oil-insulated
Vacuum-insulated

The project involves establishing a facility in Gujarat to manufacture switchgear, control


gear and capacitors for a variety of applications.
Sources:
Assemblies of switchgear and control panels (1) EEP (June 2012), http://electrical-engineering-portal.com/assemblies-of-switchgear-
and-control-panels-part-1

Page 3
Project Concept

Project overview

The proposed project involves the establishment of a facility for manufacturing of capacitors,
switchgear and control panel at Dahej Industrial Estate, Bharuch District
The proposed facility will have three main manufacturing processes, namely, Switchgear &
control gear manufacturing, and Capacitor Manufacturing process
The key equipment required for switchgear and control gear manufacturing include LVD laser
cutting machine, turret punching machine, gasket forming machine, metal bending machine,
etc.
Key equipment required for capacitor manufacturing process include capacitor winding
machine, lead welding machine, and box encapsulation machines
The total project cost of setting up the facility and control panel manufacturing facility is
estimated to be ~INR 1350 million
The demand for the facility will be met by the significant capacity addition requirements in the
State and overall country. The expected growth in electricity generation capacity (GW) is likely
to grow at a CAGR of 7.8% between 2016-25
A strong local demand will also produce significant demand for T&D equipment

Page 4
Market Potential

Global switchgear and control gear (panel), and capacitor markets expected to grow
at CAGRs of 6.1% (2014-19) and 5.1% (2015-20), respectively
Global switchgear and Global capacitors market size
control gear market size (USD billion)
(USD billion) CAGR:
5.1%
24.2
CAGR: 53.8 CAGR:
6.1% 3.2%
18.8
42.1 16.1
40.0

2014 2015 2019F 2010 2015 2020F


Source: Technavio Source: Paumanok Publications

Asia Pacific is the largest switchgear and control gear market and is expected to rise strongly
owing to large investments in the power sector during 20162019.
Increasing electrification in developing countries of this region will boost demand.
Growing demand for consumer electronics and the rising significance of capacitors in electronics
manufacturing is likely to drive the capacitors market to ~USD24 billion by 2020.
Indian switchgear and capacitor markets to witness robust CAGRs of 19.2% and
29.2%, respectively, during FY15-22

Indian switchgear and control gear Indian capacitors market size


market size (USD billion) (USD million)

450
CAGR: 8.2 CAGR:
19.2% 29.2%

4.4
150
2.4
75

FY15 FY17F FY22F FY15 FY17F FY22F


Source: Ministry of Heavy Industries, Source: Central Electricity Authority of India
TechSci Research
The switchgear and control gear market is expected to witness robust growth owing to significant
electricity capacity additions supported by large government and foreign investments.
Demand for capacitors is expected to be driven by rising demand for consumer durables, IT
hardware coupled with increasing use of electrical circuits in diverse applications.
Source:
GLOBAL T&D EQUIPMENT MARKET, Technavio (Sep 2015), accessed via EMIS Database
EEStor Capacitor Technology: Opportunities in The Global Capacitor Market: 2014, PAUMANOK PUBLICATIONS, INC. (December 2014)
ENGINEERING Sector profile IBEF (January 2016)
Indian Electrical Equipment Industry Mission Plan 2012-2022, Ministry of Heavy Industries & Public Enterprises Government of India
(July 2013)

Page 5
Growth Drivers

Significant electricity capacity additions supported by government investments will


drive demand for switchgear and control gear
Investments on
Expected electricity capacity Installed total
distribution equipment by
additions for various five year capacity
the Government of India
plans (FYPs) (in GW) in India (GW)
(USD billion)1

93.0 Growth:
88.5 CAGR:
78.7 6.6% 4.0%
45.9 400
43.1
280

41.3

10th FYP 11th FYP 12th FYP 13th FYP 11th FYP 12th FYP FY16 FY22F
Source: Indian Electrical & Electronics Manufacturers Association
Large-scale planned investments and installed capacity addition of ~220 GW during (FY16-22)
will drive demand for switchgear and control gears in India to ~USD8.2 billion by FY22.
Robust demand for consumer electronics and durables will drive the capacitors
market
Indian electronics Indian consumer durables
market (USD billion) market (USD billion)

CAGR: Of the total demand of CAGR: By 2025, India is


6.1% 400 ~USD400 billion, only 16.3% 20.6 expected to be the
~26% (USD104 billion) fifth largest
280 is expected to be consumer durables
9.7
produced domestically market globally.
and the rest will be
imported.
FY15 FY20F
FY16 FY22F
Source: Makeinindia, Department Of Electronics, TechSci Research
Rising disposable incomes, easy access to credit, increasing electrification and wide usability of
online sales will boost domestic capacitors production capacity to USD450 million by FY22.
Moreover, investments by the government will further strengthen domestic manufacturing
In 2014-15, the government invested ~USD738,000 to set up a facility at Thrissur, Kerala for
developing super capacitors and reduce dependence on imports.
Note: 1) All currency conversions at USD 1 = INR 66.66 as on 9 June 2016.
Source:
Indian Electrical Equipment Industry Mission Plan 2012-2022
India making super capacitors for strategic use, Business Standard (January 2016), http://www.business-standard.com/article/news-
ians/india-making-super-capacitors-for-strategic-use-116011700336_1.html
Consumer durables include brown goods, such as TV, PCs, laptops and white goods, such as AC and refrigerators.

Page 6
Gujarat - Competitive
Advantage
Strong local demand

Total power generation capacity in Total power transmission capacity in


Gujarat (MW) Gujarat (MVA)

CAGR:
9.2%
31,000 CAGR: 19,000
29,040 47.6%

18,270
4,000

FY14 FY17F FY20F 2014 2018F


Source: Energy & Petrochemicals Department, Government of Gujarat

Significant increase in Gujarats power generation and transmission capacities will generate
robust demand for switchgear and control panels, which are primarily used at sub-stations for
power distribution.
Moreover, higher focus on energy efficiency and increased capacitor usage in various devices
will drive demand for capacitors.
Key proposed power generation projects include a 4,000 MW Mundra ultra mega power plant
and a 2,640 MW Mundra thermal power plant.

Large investments by the Government of Gujarat (GoG) in the power sector


Investments in power sector
by segment (USD billion)

Transmission
4.6
and distribution
~USD22.8 for billion1
power capacity additions Generation 18.2
The Blueprint for Infrastructure in Gujarat
2020 (BIG 2020) an integrated plan for
Infrastructure development envisages an The Government of Gujarat intends to
investment of USD22.8 billion (INR151,735 invest USD4.6 billion (INR30,670 crore) in
crore) in power sector. transmission and distribution by 2020.

Note: 1) Currency converted at USD 1 = INR 66.66 as on 9 June 2016.

Source:
Review of Blueprint for Infrastructure in Gujarat (BIG 2020) Final Report Volume 1 Summary and Vision (August 2009), accessed
via http://www.gidb.org/Document/2014-12-31_112.pdf
Manufacturing Sector Profile, (January 2013), http://www.rubberking.net/images/pdf/Manufacturing%20Sector%20Profile.pdf

Page 7
Gujarat - Competitive
Advantage
High availability of skilled manpower (engineers)
Engineering seats in Gujarat by As of June 2016, Gujarat had ~126
specialisation (Academic year 2014-15) undergraduate engineering colleges and ~70 post
graduate engineering colleges with intakes of
Mechanical 23% ~68,447 and ~6,694 students per year,
respectively.
Computer 17%
More than 80% of the seats were in self-financed
Electronics &
Communication 17% private colleges, while 15% seats were in
Government colleges.
Civil 14%
Leading engineering colleges in Gujarat:
Electrical 13% Indian Institute of Technology (IIT), Gandhinagar

Information Sardar Vallabhbhai National Institute of


Technology 8%
Technology, Surat
Others 8% Gujarat Technological University, Ahmedabad

Nirma University - Institute of Technology,


Total seats: 46,069 for admission
Ahmedabad
through Gujarat Common Entrance Test

Other advantages
Ease of Doing Business
Only state which comply 100% with environmental procedures.

Gujarat fares highly when it comes to setting up a business, allotment of land and
obtaining a construction permit.

Flourishing Economy
Gujarat contributes 7.31% of the Nation GDP in 2015 and shows leadership in many
areas of manufacturing and infrastructure sectors.
Gujarats SDP (State Domestic Product) at current price registered a growth of 11%
during the year 2014-15.

Strategic location and excellent infrastructure


Located on the west coast of India, Gujarat is well connected to the major cities of
the world by air and sea routes.
The state has 45 ports, 12 domestic airports and 1 international airport in addition to
an extensive rail and road network.

Easy availability of raw materials


Many key industrial clusters such as foundry & forgings, machine tools, steel re-
rolled products and fabricated metal products are located in close vicinity of
industrial hubs in Vadodara.
Source:
Manufacturing Sector Profile, Vibrant Gujarat website
Gujarat Growth and Prosperity for All, Vibrant Gujarat website
Ministry of Statistics and Project Implementation, August 2015
Page 8
Project Information

Switchgear and control gear manufacturing process1

1. Metal sheet fabrication 2. Enclosure assembly 3. Busbar production

Stainless steel sheets are Frames and processed Busbars (electrical


sheared. metal sheets are fitted conductors) are cut,
Sheet are then bent using together using joints to punched and bent according
hydraulic press brake form enclosure to the panel design and
machines. assemblies. rating before being installed
Chemical treatment is done in the enclosures.
to remove surface defects. They are clamped with fibre
Lastly, doors are sealed glass insulator for durability
with polyurethane rubber. during short circuits.

6. Component Key equipment required


7. Testing
assembly
LVD laser cutting machine
Electrical components such The switch gear is tested on Turret punching machine
as circuit breakers and various testing equipment to
Hydraulic press brake
control devices are fitted and ensure optimal performance
wired together. and safe operation before machine
on-site installation. Gasket forming machine
Epoxy powder coating
machine
Metal bending machine
Punching and cutting
machine
Testing equipment
Contact resistance tester
Primary current injector
Secondary current injector
2 phase voltage injector

Note: 1) The process depicted is illustrative and may involve further sub-steps and other processes as well
Source:
SMBE electric company website: http://www.smbelectric.com/our-capabilities/manufacturing-process/

Page 9
Project Information

Capacitor manufacturing process1


3. Internal 4. Sheet
1. Dielectric paste 2. Sheet
electrode layering and
production formation
printing pressing
Powdered dielectric The paste slurry is Electrode ink is made Electrode printed
material and resin poured onto conveyor by mixing metal ceramic sheets are
are mixed to created belt inside a drying powder with solvents stacked to create a
a dielectric paste. oven, resulting in the and ceramic material. multilayer structure
dry ceramic sheets. Electrodes are then called a bar.
Thickness of the sheet printed onto the
determines the ceramic sheets using
voltage rating of the a screen printing
capacitor. process.
Pressure
Screen Multi-layering
Dielectric Resin Dielectric paste
powder

Carrier film
Printed electrodes
7. Terminal
5. Cutting and 6. Sintering/ 8. Testing and
electrode dipping
chip formation Firing packaging
and plating
The bar is cut into The parts are fired in Each terminal of the The parts are tested
separate capacitors kilns with slow moving capacitor is dipped in and sorted to their
as per the specified conveyor belts. electrode ink and the correct capacitance
sizes. After sintering, the parts are fired in kilns. tolerances.
capacitors become After this capacitors are They are then
hard ceramic. plated with a layer of packaged on tape
nickel and then a layer and reel and are
of tin. shipped.
Terminal
electrode
dipping

Terminal
firing and
plating

Key equipment required


Capacitor winding machines Box encapsulation machines
Lead welding machines Automatic testing machines
Powder coating machines
Note: 1) The process depicted is illustrative and may involve further sub-steps and other processes as well
2) The process is for the production of ceramic capacitors that comprise majority (50-52%) of the market
Source:
Manufacturing process: How TDKs multilayer ceramic chip capacitors are made TDK company website,
http://www.tdk.co.jp/teaaa01/aaa60516.pdf
Basics of capacitors [Lesson 3] How monolithic ceramic capacitors are made, Murata,
http://www.murata.com/products/emiconfun/capacitor/2011/06/28/en-20110628-p1
Basics of Ceramic Chip Capacitors, Johanson Dielectrics (http://www.johansondielectrics.com/basics-of-ceramic-chip-capacitors)

Page 10
Project Information

Indicative Location: Dahej, Bharuch


Dahej III in Bharuch District is an indicative location for establishment of transmission wire
manufacturing plant. Alternatively, other suitable locations in Gujarat can also be considered.
The site is owned and managed by Gujarat Industrial Development Corporation (GIDC) and has
gained traction from large T&D companies Adani Power Ltd..
Ahmedabad Dahej, Bharuch
Dahej-III industrial estate: Key highlights
Area 1477 hectares
Land price INR 1020 per sq. m.

Chemical & Petrochemical


Focus Industries
sectors
Large Industries

This kind of facility can be developed in any region / location in


Gujarat.

Why Dahej?
Dahej Industrial Estates I, II, III form part of the Gujarat Petroleum Chemical Petrochemical
SIR located in Bharuch
Bharuch is a formidable industrial base in sectors as diversified as chemicals & petrochemicals,
textiles, drugs and pharmaceuticals.
The Industrial Estates and the GPCPSIR fall within the proposed Delhi Mumbai Industrial
Corridor (DMIC)
Dahej I: Dahej II: Dahej III
Scale of Industries Scale of Industries Scale of Industries -
Large Industries Large & Medium Large Industries
Type of Industries
Type of Industries -
Industries Chemical &
Chemical & Type of Industries Petrochemical
Petrochemical Industries Chemical & Petrochemical Industries
Major Industries Industries Major Industries
Petronet LNG, Gujarat Major Industries Indofil ATC Tyres Pvt. Ltd.,
Alkalies and Chemicals Viswaat Chemicals Ltd.
Industries, Gujarat
Limited, ONGC Petro Adani Power Ltd.,
Flurochemical Ltd., Riddhi Siddhi Ltd. etc
Additions Limited

Page 11
Infrastructure
Availability
Logistics & Connectivity

Rail Road

Savli has access to broad gauge railway Connected to National Highway 8 (NH 8)
network from the following railway and National Expressway 1 (NE 1) through 4
stations: lane State Highway No 87
Vadodara railway station: 17 Km SH 158 connects Savli to Vadodara.
Ahmedabad railway station: 110 Km

Air Port

Ahmedabad international airport: 110 Savli (Vadodara) is connected to the


Km. following ports:
Vadodara domestic airport: ~14 Km. Dahej 150 Km
Kandla 400 Km
Mumbai 450 Km

Utility

Water Power

Gujarat Industrial Development Electricity is supplied from an existing 132


Corporation (GIDC) will provide water to KVA sub-station operated by Gujarat
the proposed facility. Energy Transmission Corporation (GETCO)
located in the premises.

Gas

Gujarat State Petroleum Corporation (GSPC) is the gas supplier to the site through a well
established pipeline.
The company needs to directly apply for gas to GSPC.
Source:
Government of India Ministry of MSME District Industrial Potential Survey Report of Vadodara District, MSME Development Institute
(December 2014)

Page 12
Project Information

Key players
Switchgears and control gears market
Player Plant location Key products
Low voltage, medium voltage and high voltage
switchgears
Vadodra, Gujarat Air-insulated switchgears
ABB Limited
Nashik, Maharashtra Gas-insulated switchgears
Railway switchgear
Wind switchgear
Low voltage switchgear and busbar trunking
systems
Verna, Goa
Siemens India Medium voltage gas-insulated switchgears
Aurangabad, Maharashtra
Primary distribution switchgears
Switchgear spare parts
Vadodra, Gujarat Primary switchgear
Schneider
Nasik, Maharashtra Secondary switchgear
Electric India
Hyderabad, Telangana Switchgear components
Vadodara, Gujarat Air circuit breakers
L&T Electrical Ahmednagar, Control panel accessories
& Automation Maharashtra Final Distribution Products (MCB, RCCB,
Coimbatore, Tamil Nadu RCBO, DBs)
Capacitors market
Player Plant location Key products
Aluminium electrolytic capacitors
Bawal, Haryana
EPCOS India Ceramic capacitors
Nashik, Maharashtra
(TDK Film capacitors
Kalyani, West
Corporation) Components for power factor correction power
Bengal
capacitors
Polyester film capacitors
Deki
Noida, Uttar Pradesh Mixed dielectric film capacitor
Electronics
Polypropylene film capacitors
EMI suppression capacitors
General purpose capacitors
Desai Power electronics capacitors
Pune, Maharashtra
Electronics High voltage capacitors
Automobile capacitors
Energy meter capacitors
Source:
http://www.tradeindia.com/Seller-1520540-FILCON-ELECTRONICS-PRIVATE-LIMITED/
http://www.abb.co.in/references/default.aspx?db=db/db0004/db001502&c=517c501b84d3ddebc1257582004bddaf&att=Country&value=India
http://www.schneider-electric.co.in/sites/india/en/company/profile/in-brief/manufacturing-plants.page
http://www.larsentoubro.com/electrical-automation/products-services/products/
http://www.prnewswire.com/news-releases/india-electrical-capacitor-market-to-grow-at-36-until-2019-says-techsci-research-272272931.html

Page 13
Project Information

Key Players & Suppliers in Gujarat


L&T
Siemens India
ABB India
Parikh Switchgears
A V Zaveri & co
Thermafiled Power Components Pvt Ltd
Century Corporation
M & T Industries
Gujarat Switchgears Pvt Ltd
Surya Enterprises
Karnavati Electric & Engineering

Key Considerations

Poor financial condition of state electricity boards (SEBs)


SEBs have been facing losses due to the supply of subsidized power to
agricultural farmers, theft of power and inefficient T&D infrastructure.
This has restricted private investment in the power T&D sector, thereby
reducing the quality of service from SEBs. This, in turn, is affecting the
capacity building program and distribution network expansion in India.

High dependence on imports


A significant proportion of switchgear and control gear, and capacitors
demand is still being met through imported, creating hurdles for domestic
manufacturers.
Companies prefer imported switchgear owing to relatively faster delivery
schedule and competitive cost of sourcing. Also, lack of manufacturing
facilities, especially capacitors, increases dependence on imports.

Non-standard ratings
Ratings of electrical equipment are not standardised and all utilities follow
their own standard ratings.
To meet their requirements, manufacturers have to constantly modify the
design and spend resources in redesigning, etc. moreover, testing of
such electrical equipment is also time consuming and costly.
Source:
IEEMA-Annual-Report 2014-15 IEEMA (September 2015), http://ieema.org/wp-content/uploads/2015/09/IEEMA-Annual-Report_2014-
15.pdf
On A Threshold Of Transformation - Indias Transformer Industry, Electrical India (July 2015), accessed via,
http://www.electricalindia.in/blog/post/id/5624/on-a-threshold-of-transformation-indias-transformer-industry

Page 14
Project Financials

Estimated project cost switchgear and control gear/panel


The total project cost of setting up a ~10,000 sq mt switchgear and control gear/panel manufacturing
facility at Dahej, Gujarat, will be ~INR1350 million

Project specifications INR million % of overall cost


Land (10,000 sq mt @ INR ~1,440 per sq mt1) 14.4 1%
Other costs including land development and civil works,
1336 99%
plant and machinery, contingencies and working capital
Total cost 1350 100%
Project cost is a ball park figure based on the cost (adjusted for inflation) and other metrics of the
following projects:
Area Announced Total Cost
Company Plant Location Manpower
(sq mt) Date (INR million)
ABB India Vadodara, Gujarat 15,000 Nov 2013 2500 -
L&T Vadodara, Gujarat 27,000 Jul 2012 1300 400
Siemens India Verna, Goa - Jan 2012 2000 120
Aurangabad,
Siemens India 5,000 Jun 2009 400 100
Maharashtra

Estimated project cost capacitors


The total project cost of setting up a capacitors manufacturing facility at Savli, Gujarat, will be ~INR
50 million, with an annual capacity of ~200 million capacitors.

Project specifications INR million % of overall cost


Land (6,000 sq mt @ INR ~1,440 per sq mt1) 8.6 2%
Land development and civil works 50 10%
Plant and machinery 380 76%
Contingencies and working capital and misc. assets 60 12%
Total cost 498.6 100%
The project cost is a ball park figure based on the cost (adjusted for inflation) and other metrics of
the following projects:
Area Announced Total Cost
Company Plant Location Manpower
(sq mt) Date (INR mil)
Desai Electronics Pune, Maharashtra 3,000 Dec 2013 160 -
EPCOS India (TDK) Bawal, Haryana 8,600 Jun 2012 688 400
1) Note: 1) GIDC Allotment Prices for FY16-17

Page 15
Project Financials

Manpower requirements
Overall manpower required: 400-500 persons
10,000 sq mt switchgear and control gear/panel facility: 150-200 persons
200 million per year capacitors facility: 250-300 persons

Recent projects switchgear and control gear/panel


In November 2013, ABB inaugurated a USD50 million15,000 sq mt
ABBs high-voltage manufacturing facility at Savli.
(HV) switchgear The facility manufactures HV gas-insulated switchgear and plug-
and distribution and-switch system hybrid switchgear to serve domestic demand in
transformer facility India and also act as an export hub.
at Savli, Vadodara Apart from this the facility also manufactures distribution
transformers of range up to 10 MVA and 36 kilovolts kV.

In July 2012, L&T inaugurated a 27,000 sq mt switchgear


L&Ts INR130 manufacturing facility at Vadodara, Gujarat.
crore switchgear The company had invested INR1300 million on the facility, which
facility at primarily manufactures air circuit breakers (ACBs) and moulded
Vadodara, Gujarat case circuit breakers (MCCBs), and also houses a development
centre for R&D and engineering of circuit breakers.

Recent projects capacitors

In December 2013, Desai Electronics commissioned a 3,000 sq mt


capacitor manufacturing facility at Pune, Maharashtra.
Desai Electronics The company invested INR160 million on the facility which has an
new facility at annual manufacturing capacity of 200 million capacitors and
Pune, Maharashtra primarily manufactures plain film foil and metallised capacitors for
diverse applications, such as fan regulators, dimmers, appliances
and lighting (CFL and ballast).

In June 2012, EPCOS India, a subsidiary of Japan-based TDK


Corporation, established a 8,600 sq mt facility at Pune, Maharashtra
EPCOS Indias to manufacture AC capacitors for motor start and motor run
(TDK) power applications and capacitors for power factor correction (PFC).
capacitor plant at
Bawal, Haryana The company invested 10 million (INR690 million) on the facility
and also planned to expand manufacturing to include medium
voltage PFC capacitors.
Source:
Siemens to set up energy sector in Goa, Business Standard (November 2010), http://www.business-
standard.com/article/companies/siemens-to-set-up-energy-sector-in-goa-110110100209_1.html
http://www.energetica-india.net/news/siemens-opens-a-new-factory-for-gas-insulated-medium-voltage-switchgear-in-india
http://www.siemens.co.in/en/news_press/index/greenfield_factories.htm
http://www.siemens.co.in/en/news_press/index/news_archive/june_05_2009.htm
http://www.bchindia.com/company/infrastructure/manufacturing/

Page 16
Approvals &
Incentives
Gujarat Industrial Policy 2015
Government of Gujarat has announced an ambitious Industrial Policy, in January 2015, with the
objective of creating a healthy and conducive climate for conducting business and augmenting the
industrial development of the state.

Quantum of incentives

The incentives under this policy will be available to all the Talukas listed in Government Resolution
dated 25/7/2016 except areas falling within municipal corporations.

% of eligible fixed
Category of % of Net VAT % of Net VAT to be
capital investment Incentive period
Project Location reimbursement to paid to
entitled for (no. of years)
(Taluka) the unit Government
Incentive
1 100 90 10 10
2 80 80 20 10
3 70 70 30 10
Net VAT incentives
Net VAT incentive will be reimbursed to the industrial undertaking in one financial year will not
exceed one-tenth of the total amount of eligible incentive.
Classification of the Project Amount (in INR crore)
Ultra Mega Industrial Unit 500
Mega industrial Unit 400
Large Industrial Unit 150
Micro, Small or Medium Industrial Unit 50
Industries in the Sector can opt for either the general incentives under the Gujarat
Industrial Policy- 2015 or the incentives provided below if the proposed plant is an MSME
(i.e. Plant and Machinery cost is less than INR 10 crore): :

As per the Gujarat Industrial Policy-2015, following are the key incentives provided to the
manufacturing sector (including switchgear, control gear/panel and capacitors manufacturing):
Interest subsidy of 5% with the maximum amount of INR 25 lakhs (~USD 37,5001) per annum
for 5 years on the term loan of machinery and equipment for plants set up within municipal
corporation areas.
Interest subsidy of 7% with the maximum amount of INR 25 lakhs (~USD 37,5001) per annum
for 5 years on the term loan of machinery and equipment for plants set up outside municipal
corporation areas.
Capital investment subsidy of 10 % loan amount disbursed by Bank/Financial Institution with a
maximum amount of INR 15 lakhs in Municipal Corporations areas.

Note: 1) Currency converted at USD 1 = INR 66.66 as on 9 June 2016.

Page 17
Approvals &
Incentives
Indicative List of Approvals
Approvals/clearance required Department to be approached and consulted
Incorporation of company Registrar of companies
Registration/Industrial license Secretariat if industrial assistance (SIA) for large and medium
scale industries
Allotment of land State industrial development corporation
No objection certificate (NOC) under air State pollution control board
and water pollution control acts
Approval of construction and country Town and country planning
planning Municipal and local authorities
Chief inspector of factories
Pollution control board
Electricity board
Finance For loans higher than INR 1.5 crore, all India financial institutions
like Industrial Development Bank of India(IDBI), Industrial Credit
and Investment Corporation of India(ICICI), Industrial Finance
Corporation of India(IFCI) etc.
Registration under state sales tax act Sales tax department
and Central and State excise act Central and state excise department
Code number for export and import Regional office of director general of foreign trade

Environmental clearance Ministry of environment, forest and climate change after


conducting environment impact assessment (EIA) for any project

Hazardous waste import and export Ministry of environment, forest and climate change
approval
Exiting business Ministry of corporate affairs

Government of Gujrat has introduced single window facilitation portal for investors providing
undermentioned benefits:
Centralized system to monitor applications.
User friendly and simplified application process for investors.
System for authorities and investors to check the status of applications.
Increased departmental ownership.
The unit shall be facilitated through Investor Facilitation Portal for obtaining all the
necessary state approvals/ clearances - https://www.ifpgujarat.gov.in
Source
Gujarat Textile Policy, Industries and Mines Department, Government of Gujarat, 5 September 2012
Approvals required for setting up plant,
http://dipp.nic.in/English/Investor/Investers_Gudlines/approval_clearances_required_for_new_projects.pdf, accessed 8 July 2016
Environment clearance http://envfor.nic.in/major-initiatives/environmental-clearances, accessed 8 July 2016
Gujarat single window clearance, https://www.ifpgujarat.gov.in/portal/jsp/aboutUs.jsp, accessed 8 July 2016
Exiting business, http://www.mca.gov.in/MinistryV2/CloseCompany.html, accessed 9 July 2016
Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014
Industries Commissionerate website, http://ic.gujarat.gov.in/?page_id=3175, accessed on 1 June 2016
Textile industry welcomes amended TUFS, Business Standard, 2 January 2016
Approvals http://dipp.nic.in/English/Investor/Investers_Gudlines/FAQ_GrantIndustrialLicence.pdf, accessed 27 June 2016
List of defence equipment requiring industrial license, http://dipp.nic.in/English/acts_rules/Press_Notes/pn3_2014.pdf

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Industries & Mines Department
www.imd-gujarat.gov.in

Gujarat Industrial Development Corporation


www.gidc.gov.in

Office of Industries Commissioner


www.ic.gujarat.gov.in

Industrial Extension Bureau


www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Office of The Industries Commissionerate


Block No. 1, 2nd Floor, Udyog Bhavan,
Gandhinagar 382 010. Gujarat
Ph.: 23252683/23252617
Email ID: iccord@gujarat.gov.in