(1) AUTOMOBILE  Department of Heavy Industries (DHI) is the nodal Department, responsible for planning, implementation and review
 Department of Heavy Industries (DHI) is the nodal Department, responsible for planning, implementation and review of the
SUMMARY
 The Automobile industry in India is a significant driver of macroeconomic growth and technological development.
 The Automobile industry holds a 7.5% share in India’s GDP. 1
 India is projected to be the world's third-largest automotive market in terms of volume by 2026.2
 India has 4 large auto manufacturing hubs: Delhi-Gurgaon-Faridabad in the North, Mumbai-Pune-Nashik-Aurangabad in the
West, Chennai- Bengaluru-Hosur in the South and Jamshedpur-Kolkata in the East.
 The Automobile industry manufactured 14.7 mn vehicles including passenger vehicles, commercial vehicles, three-wheelers
and two-wheelers during April – September 2017 against 13.4 mn during April-September 2016.3
 As per FY 2018-19, India has manufactured 25 mn vehicles out of which 3.5 mn have been exported. 4
 By 2020, more than 6 mn hybrid and electric vehicles are expected to be sold annually
 In the Automobile industry in India, the FDI equity inflows received during April 2000 – September 2018 is valued at US$
20.36 bn.5
REASONS TO INVEST
 India will emerge as the third-largest Automotive market in the world in terms of volume by 2026, followed by China and
USA.6
 The Automotive Mission Plan 2016-26 (AMP 2026) aims to drive the Automobile industry to be the engine of the “Make in
India” programme, developing India as a global manufacturing center.7
 As per the AMP 2026, the Automobile industry has a target to triple the revenues to US$ 300 bn and increase exports
sevenfold to US$ 80 bn.8
 The World Economic Forum positions India 30th on the global manufacturing index, out of more than 100 countries on the
evaluation of the manufacturing competencies.
 India’s “Make in India” initiative has played a vital role in elevating the country’s position. 9
 The rural agricultural industry is experiencing a rise in their disposable incomes, which further boosts the overall economy.
 Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles and National Electric Mobility Mission Plan (NEMMP
2020) have been initiated with an aim to support hybrid/electric vehicles market development and ecosystem.
 The International Centre for Automotive Technology (ICAT) is a top-class automotive testing, certification and R&D service
provider under the support of NATRiP (National Automotive Testing and R&D Infrastructure Project), Government of India.
ICAT is situated in the northern automotive hub of India in Manesar. 10
 Private players like Hyundai, Suzuki, General Motors are interested in setting up an R&D base in India.
 Foreign manufacturers are keen to set up their facilities due to the presence of a large pool of skilled and semi-skilled
workers and a strong educational system.
STATISTICS
 The Automobile industry can be categorized into subsectors such as passenger vehicles, commercial vehicles, three-
wheelers and two-wheelers. Two-wheelers occupy the dominant position, constituting about 80% market share and overall
passenger vehicles comprise 13%.
 India is the largest manufacturer of two-wheelers, three-wheelers and tractors in the world, and the fifth-largest vehicle
manufacturer overall.
 India is currently the fourth largest Automobile market in the world.
 India's annual production has been 29.08 mn vehicles in FY18 as against 25.33 mn in FY17, registering a healthy growth of
14.8%.11
 The Automobile industry in India has followed a robust growth path, growing at a CAGR of 6.26% in FY 2018-19.12
 The sale of passenger vehicles increased by 2.70%, two-wheeler by 4.86% and three-wheeler by 10.27% in FY 2018-19 as
compared to FY 2017-18.13
 By 2026, production of passenger vehicles, commercial vehicles, two-wheelers and three-wheelers is expected to grow
annually at 9.4 mn units, 2.0 mn units, 50.6 mn units and 0.95 mn units respectively.
 By 2026, as per the Automotive Mission Plan 2016-26, the Automobile industry has the potential to contribute about 12% of
total GDP and create 65 mn jobs.14
FDI POLICY
 The Government of India has initiatives to boost foreign investment in the Automobile industry.
 Under the automatic route, 100% Foreign Direct Investment (FDI) is permitted along with fully delicensing. Hence, making it
easy for investors to set up their manufacturing plant/shop in India.
 The cumulative FDI inflow in the Automobile industry has been US$ 21.38 bn during the period April 2000 to March 2019. 15
 By 2023, the growth is expected to continue as it is estimated that the Automobile industry would attract an additional US$
8-10 bn in local and foreign investment.
SECTOR POLICY
FAME INDIA SCHEME II PHASE
 The Fame India Scheme II is proposed to be implemented over a period of 3 years from 1 April 2019, for faster adoption of
electric mobility and growth of electric and hybrid technology to improve the eco-system in the country.
scheme.16
 The Government of India, in February 2019, approved the FAME-II scheme with a fund requirement of US$ 1.39 bn for FY20-
22.17
AUTOMOTIVE MISSION PLAN 2016-26 (AMP 2026)
 The Automotive Mission Plan 2016-26 (AMP 2026) outlines the trajectory of growth of the automotive ecosystem in India,
including the glide path of definite regulations and policies that govern research, design, technology, testing, manufacturing,
import/ export, sale, use, repair, and recycling of automotive vehicles, components and services. 20
 The Automobile industry is projected to be the third largest in the world, contributing 12% to GDP.
 The industry has the potential to generate US$ 300 bn revenue and 65 mn additional jobs by 2026. 21
 The Automobile industry is one of the prime movers of the manufacturing sector and “Make in India” initiative. It aims to
increase exports of vehicles by five times. The growth of vehicles, particularly the passenger vehicles, is expected to triple to
9.4 mn units per annum by 2026.
 The plan also foresees India to be the first in the world in production/sale of small cars, two-wheelers, three-wheelers,
tractors and buses; and third in passenger vehicles and heavy trucks.
DRAFT NATIONAL AUTOMOTIVE POLICY 2018
 Department of Heavy Industries formulated a draft National Automotive Policy, for the holistic development of the
Automobile industry in India.
 The policy estimates to scale-up exports to 35-40% of the overall output and makes India one of the major automotive
export hubs in the world. Thus, the following propositions are made in the policy:
o Adopt a long-term roadmap for emission standards beyond BSVI and complement the same with the global
standards by 2028.
o Rollout CAFÉ (Corporate Average Fuel Efficiency) norms till 2025.
o Adoption of a differential taxation method based on a composite criterion, including parameters such as CO2
emissions and length.
o Associate AIS and BIS standards on safety critical parts over the next 3 years.
o Fast track adoption of Bharat New Vehicle Safety Assessment Program.
NATIONAL AUTOMOTIVE TESTING AND R&D INFRASTRUCTURE PROJECT (NATRIP)
 The project has been set up at a total cost of US$ 573 mn to enable the industry to adopt and implement global
performance standards.
 It aims at converging India’s unparalleled strengths in IT and electronics with automotive engineering sectors. 22
 The main area of focus is on providing low-cost manufacturing and product development solutions.
 Ministry of Heavy Industries & Public Enterprises has constituted NATRIP Implementation Society (NATIS), an autonomous
body, for the execution of NATRIP.23
 As a part of the program, 7 test centers have been finalized to set up the test facilities – iCAT, GARC, NATRAX, ARAI, VRDE,
NIAIMT, NCVRS.24
 Under the Samarth Udyog, ‘Demo cum experience’ centers are being set up in the country for promoting smart and
advanced manufacturing serving SMEs to implement Industry 4.0 (automation and data exchange in manufacturing
technology).25
NATIONAL ELECTRIC MOBILITY MISSION PLAN 2020 (NEMMP)
 The NEMMP initiative has been taken up to encourage consistent, affordable and competent xEVs (hybrid and electric
vehicles) that meet consumer performance and price expectations through government-industry collaboration.
 Promotion and development of indigenous manufacturing capabilities, required infrastructure, consumer awareness and
technology are additional objectives of NEMMP 2020.
 India is expected to emerge as a leader in the two-wheeler and four-wheeler xEV market in the world by 2020. The total xEV
sales projected as 6-7 mn units, thus, enabling the Automobile industry to achieve global xEV manufacturing leadership and
contributing towards national fuel security.
 The aim is to have 6 mn electric & hybrid vehicles per year on the road by 2020 under NEMMP 2020. A cumulative cost of
US$2.15 bn is estimated for this paradigm initiative, which also includes industry collaboration.
GREEN URBAN TRANSPORT SCHEME (GUTS) 2017
 The Green Urban Transport Scheme has been executed with the help of the private sector including assistance from the
central and state governments under a 7-year mission with a total cost of US$ 10.76 bn.
 The scheme promotes low carbon sustainable public transport system in urban areas. For the first phase, 103 cities have
been identified. These cities are either capital cities or have a population of 0.5 mn and above.
 The scheme encourages the promotion of Non-Motorized Transport (NMT), public bike sharing, Bus Rapid Transit (BRT)
systems, Intelligent Transport Systems (ITS), urban freight management etc.
FINANCIAL SUPPORT
R&D INCENTIVES FOR INDUSTRY AND PRIVATE SPONSORED RESEARCH
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  A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act. Weighted deduction of 200% is granted to
assess for any sums paid to a national laboratory, university or technological institute. The said sum is used for scientific
research within a program approved by the prescribed authority.
MANUFACTURERS WITH AN IN-HOUSE R&D CENTRE
 Section 35 (2AB) of the Income Tax Act 26, 1961 provides weighted tax deduction of 150% of the expenditure incurred by a
specified company, on scientific research in the in-house R&D centers as approved by the prescribed authority. This does
not include expenditure on the cost of any land or building. The weighted tax deductions of 150% are effective until 31
March 2020. Consequently, the weighted tax deductions will be 100%.
STATE INCENTIVES
Apart from the mentioned incentives, each state in India offers additional incentives for industrial projects. Incentives are provided
in the following: rebates in land cost, relaxation in stamp duty exemption on sale or lease of land, power tariff incentives, a
concessional rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies, special packages for mega
projects. Few examples are -
 Andhra Pradesh
o Government of Andhra Pradesh is committed to providing land at concessional rates, along with 24 hours nonstop
power supply.
o Capital subsidy of 50% for common infrastructure in auto clusters and ASMC developers, up to a maximum of US$
3.07 mn.
o Financial assistance limited to 75% of the cost, subject to a maximum of US$38,461 for obtaining patent
registration. While 50% of all charges are subject to a maximum of US$ 7,692 paid for obtaining quality
certification. This is applicable to only MSME units.
o Under marketing incentives, 50% of participation cost with a maximum amount of US$ 7,692 to be reimbursed to
at the most 10 MSME units annually, for participating in international trade fairs.
 Gujarat
o Auto component manufacturers can either avail general incentives under the Gujarat Industrial Policy 2015, or
under the scheme for Mega / Innovative Projects.
 Jharkhand
o Jharkhand introduced Automobile and Auto Component Policy 2016 with an aim to make Jharkhand, a preferred
destination for automobile and auto-component manufacturing units. Provision of financial assistance of 50% for
fixed capital investments in building and common infrastructure up to a maximum of US$ 3.07 mn. 100% electricity
duty exemption shall be provided for 10 years from the date of production.
EXPORT INCENTIVES
 Under the Merchandise Export Incentive Scheme (MEIS), automobile manufacturers get a benefit of 2% on vehicle exports.
 About 20 tariff headings have been considered as “Sensitive items” to be maintained in the negative list of India in most of
the trade agreements.
AREA-BASED INCENTIVES
 Incentives for units in SEZ/NIMZ as specified in respective acts or the setting up of projects in special areas like the North-
east, Jammu & Kashmir, Himachal Pradesh and Uttarakhand.
INVESTMENT OPPORTUNITIES
 Passenger vehicles: passenger cars, utility vehicles, multi-purpose vehicles.
 Two-wheelers: mopeds, scooters, and motorcycles.
 Three-wheelers: passenger carriers, goods carriers.
 Commercial vehicles: light commercial vehicles, medium and heavy commercial vehicles.
 Huge demands for low-cost electric vehicles that are suited for safe short-distance urban commutes (averaging 50-100
km/trip) that are rugged enough to perform reliably through India's summers and monsoon. It is estimated that total
electric vehicles sales would amount to 6-7 mn units by 2020.
(2) AUTOMOBILE COMPO NENTS
SUMMARY
 The Automotive industry is a key driver of macro-economic growth and technological advancement in India.
 The Automotive industry in India is leading in many segments- primarily in two-wheelers, cars and tractors.1
 As of FY 2018, the US$ 51.2 bn Auto-Components industry in India is expected to grow to US$ 200 bn by 2026.2
 The Compound Annual Growth Rate (CAGR) of the industry stood at 10% over a period of 2012-2018.3
 The exports grew by 23.9% to reach US$13.5 bn in 2018-19.4
 With increasing vehicle parc in India, the aftermarket in 2017-18 raised by 9.8% to US$ 9.2 bn from US$ 8.4 bn in 2016-17.5
 The Automobile component industry in India is projected to be the third largest in the world by 2025.
REASONS TO INVEST
 A stable government framework with increased purchasing power, large domestic market and an ever-increasing
development in infrastructure have made India a favourable destination for investment. 6
 India is emerging as a global hub for sourcing auto components. The key automotive markets like the ASEAN, Japan, Korea,
Europe and huge domestic market are geographically closer to India.
 India offers low cost by 10-25% relative to that offered by Europe and Latin America. Hence, India is cost competitive as
compared to other manufacturing countries.
 There are minimal restrictions on export-import which make it a favourable trade policy. Furthermore, specific incentives
are available for export-oriented units and export processing zones.
 India’s growing integration in Global Value Chains further offers impetus to the Automobile component industry.
 Favourable government policy with 100% FDI allowed through automatic route.
 Presence of enabling infrastructures like automotive training institutes and auto design centres, special auto parks and
virtual SEZs for auto components.
 India is the fastest growing major economy in the world with a GDP growth rate of above 7%.
 An increasing working population and an expanding middle-class are likely to remain key demand drivers.
 A large pool of skilled workforce and a strong educational system are the supporting factors for investment. Improvised
R&D operations and laboratories that have been set up to conduct activities such as analysis, simulation and engineering
animations are helping in additional investment prospects.
 The growth of global Original Equipment Manufacturers (OEMs) sourcing from India and the increased indigenisation of
global OEMs is turning the country into a preferred designing and manufacturing base.
STATISTICS
 The Automobile component industry in India is set to become the 3 rd largest in the world by 2025.
 The turnover of the Automobile component industry in India has been US$ 51.2 bn in FY 2018 7 and is expected to be US$
100 bn by 2020. The predicted rise will be mainly due to the strong exports ranging between US$ 80-US$ 100 bn by 2026.8
 Out of the total exports, the Auto components exports in India account for 4% and in 2017-18, exports stood at US$ 13.50
bn.9
 Industry exports are projected to reach US$ 30 bn by 2020-21, further rising to US$ 80 bn by 2026. The exports grew by
23.9% to reach US$ 13.5 bn in 2017-18. Major export markets are Europe (34%), North America (28%) and Asia (25%). 10
 The domestic aftermarket for auto components stood at US$ 9.2 bn in 2017-18.11
 The contribution of Automobile component industry in India’s GDP will account to as much as 5% to 7% by 2026.
 The Automobile component in India contributes 2.3% to India’s GDP. 12 About 1.5 mn people are directly and 1.5 mn are
indirectly are employed in this industry.
 Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 mn by 2026. Realization of
goals in the Automotive Mission Plan (2016-26) requires an additional investment of US$ 25-30 bn.
 The Automobile component industry in India will be among the top three of the world in engineering, manufacturing and
export of vehicles and components.
 The Automobile component industry in India is composed of organized and unorganized sector. The organized sector refers
to original equipment manufacturers (OEMs) and is engaged in the manufacture of high-value precision instruments.
Whereas, the unorganized sectors comprise of low-valued products catering to after-market services.
 Various sub-sectors of the Automobile component industry in India are engine parts, drive transmission & steering parts,
body and chassis, suspension and braking parts, equipment, electrical parts and others such as fan belts, die-casting and
sheet metal parts.
 India is considered competitive in manufacturing of forgings, stampings, castings, machining, wiring harness and electronic
fuel injectors.
FDI POLICY
 100% Foreign Direct Investment (FDI) is allowed under the automatic route in the Automobile component industry in India,
subject to all the applicable regulations and laws.
 The Foreign Direct Investment (FDI) inflows into the Automobile component industry in India during the period April 2000 –
March 2019 is recorded at US$ 21.38 mn.13
SECTOR POLICY
AUTO POLICY 2002
 The National Auto Policy had been formulated aiming at prescribing policy guidelines and enabling the framework to
achieve the predicted growth objectives.14
 The Department of Heavy Industries will conduct an independent assessment and mid-term review of the Auto Policy in
2022. 15
 In the Automobile component industry in India, manufacturing and imports are exempted from licensing and approvals.
AUTOMOTIVE MISSION PLAN 2016-26
 AMP 2016-26 seeks to outline the trajectory of the advancement of the Automobile component industry ecosystem in
India.16
 The Automobile component industry in India foresees growth of US$ 260 bn- US$ 300 bn by the end of FY 2026.
 India forecasts to be amongst the top 3 automotive industries in the world by 2026. There will be 65 mn direct & indirect
jobs generated by 2026.
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  The GDP contribution of the Automobile component industry in India is projected to be 12% by 2026.
NATIONAL AUTOMOTIVE TESTING AND R&D INFRASTRUCTURE PROJECT (NATRIP)
 National Automotive Testing and R&D Infrastructure Project (NATRiP), largest and most significant initiatives by
Government of India, in the Automobile component industry in India.
 The chief aim of the project is:
o To generate core global competencies - state-of-art testing and R&D infrastructure.
o To enable seamless integration by driving the automobile component industry in India into the global automotive
excellence.17
 A total of US$ 573 mn investment has been done to adopt and implement global performance standards.
 The key focus lies in providing low-cost manufacturing and product development solutions.
DEPARTMENT OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES
 The Department of Heavy Industries (DHI) has invested US$ 200 mn funds to modernise the Automobile component
industry in India, by providing an interest subsidy on loans and investment in new plants and equipment.
 DHI has also provided export benefits to intermediate suppliers of auto components against the Duty-Free Replenishment
Certificate (DFRC).
NATIONAL ELECTRIC MOBILITY MISSION PLAN 2020 (NEMMP)
 NEMMP aims to bring the transformational paradigm shift in the Automotive and Transportation industry by promoting
hybrid and electrical mobility in India. It predicts a vehicle population of about 6-7 mn electric/hybrid vehicle in India by
2020.
 There has been a cumulative outlay of US$ 2.15 bn for building such roadmap. It is a composite scheme involving demand-
side incentives to facilitate the acquisition of hybrid/electric vehicles along with the provision of supply-side incentives.
FASTER ADOPTION & MANUFACTURING OF ELECTRIC HYBRID VEHICLES (FAME) SCHEME II
 The scheme is proposed to be implemented from April 2019 to April 2022, for faster adoption of electric mobility and
development of its manufacturing eco-system in the country.
 Department of Heavy Industries will be the nodal agency and be responsible to review the scheme. 18
 Total fund requirement for this scheme is US$ 1.44 bn over three years from 2019-20 to 2021-22.19
FINANCIAL SUPPORT
R&D INCENTIVES FOR INDUSTRY AND PRIVATE SPONSORED RESEARCH:
 A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act. 20
 Weighted deduction of 200% is granted to assess for any sums paid to a national laboratory, university or institute of
technology, or specified people with a specific direction and that the said sum is used for scientific research within a
program approved by the prescribed authority.
MANUFACTURERS WITH AN IN-HOUSE R&D CENTRE:
 Section 35 (2AB) of the Income Tax Act, 1961 provides weighted tax deduction of 150% of the expenditure incurred by a
specified company, on scientific research in the in-house R&D centres as approved by the prescribed authority. This does
not include expenditure on the cost of any land or building.
 The weighted tax deductions of 150% are effective until 31 March 2020. Post that, the weighted tax deductions will be
100%.
STATE INCENTIVES:
 Apart from the mentioned, each state in India offers additional incentives for industrial projects. Incentives are in areas like
subsidized land cost, relaxation in stamp duty exemption on sale and lease of land, power tariff incentives, concessional rate
of interest on loans, investment subsidies, tax incentives, backward areas subsidies and special incentive packages for mega
projects. Few examples are:
 Andhra Pradesh:
o The Government of Andhra Pradesh is committed to providing land at concessional rates, along with 24 hours
uninterrupted power supply.
o Capital subsidy of 50% for common infrastructure in auto clusters and ASMC developers, up to a maximum of US$
3.07 mn.
o Financial assistance limited to 75% of the cost, subject to a maximum of US$ 38,461 for obtaining patent
registration and 50% of all charges, subject to a maximum of US$7,692 paid for obtaining quality certification. This
is applicable to only MSME units.
o Under Marketing Incentives, 50% of the cost of participation with a maximum amount of US$ 7,692 to be
reimbursed to a maximum of 10 MSME units per year for participating in international trade fairs.
 Gujarat:
o Auto component manufacturers can either avail general incentives under the Gujarat Industrial Policy 2015, or
under the scheme for Mega/ Innovative Projects.
 Jharkhand:
o Jharkhand introduced Automobile and Auto Component Policy 2016 with an aim to make Jharkhand, a preferred
destination for automobile and auto-component manufacturing units.
o The policy encourages the establishment of Tier-I, Tier-II and Tier-III auto-component manufacturers in the state.
o Provision of financial assistance of 50% for fixed capital investments in building and common infrastructure up to a
maximum of US$ 3.07 mn.
o 100 % electricity duty exemption shall be provided for 10 years from the date of production.
EXPORT INCENTIVES:
 Export subsidy is available to exporters as a % of duty credit scrip under Merchandise Exports from India Scheme (MEIS).
 Additionally, the MEIS Scheme has been extended to additional tariff lines and expanded to 65 countries as per the
recommendations by ACMA.
AREAS BASED INCENTIVES:
 Incentives for units in Special Economic Zones (SEZs) / National Investment & Manufacturing Zones (NIMZs) as specified in
respective Acts or setting up projects in special areas like the North-east region, Jammu & Kashmir, Himachal Pradesh &
Uttarakhand.
KEY POINTS IN THE UNION BUDGET 2018-19:
 The increase in duty on selected items such as engine & transmission parts, brakes and parts thereof, gearboxes and parts
thereof, airbags and so on, from 7.5-10% to 15% will provide a boost to domestic manufacturing. Since most of the
component manufacturing units are SME’s. Thus, the reduction in the corporate tax rate to 25% for SMEs with a turnover of
less than US$ 38.46 mn will benefit the Automobile component industry in India.
INVESTMENT OPPORTUNITIES
ENGINE & ENGINE PARTS:
 New technological changes like turbochargers and common rail systems.
 Outsourcing to gain traction in the short to medium term.
TRANSMISSION & STEERING PARTS:
 Replacement market share in sub-segments such as clutches is likely to grow due to rising traffic density.
 The entry of global players is expected to intensify competition in sub-segments such as gears and clutches.
SUSPENSION & BREAKING PARTS:
 The segment is estimated to witness high replacement demand, with players maintaining a diversified customer base in the
replacement and OEM segments besides the exports.
 The entry of global players is likely to intensify competition in sub-segments such as shock absorbers.
EQUIPMENT:
 Companies operating in the replacement market are likely to focus on establishing a distribution network, brand image,
product portfolio and pricing policy.
METAL PARTS:
 Manufacturers are expected to benefit from the growing demand for sheet metal parts, body & chassis, fan belts, pressure
die castings, hydraulic pneumatic instruments in the two-wheeler segment.
 Leading players in the sheet metal parts sub-segment are in the process of expanding their customer base.
HYBRID & ELECTRIC VEHICLES COMPONENTS:
 It is estimated that there will be a huge demand in India for low-cost hybrid and electric vehicles (xEVs) that are suitable
short-distance urban commutes (averaging 50-100 km per trip) and rugged enough to perform reliably in the summer and in
the monsoon season in India.
(3)AVIATION
SUMMARY
 The global revenue for commercial airlines in 2018 stood at US$ 812 bn and is forecasted reach US$ 865 bn in 2019.1
 India is the world’s fastest growing domestic aviation market and has posted the fastest year on year growth for four years
in a row in 2018.2
 India’s domestic year-on-year Revenue Passenger Kilometre (RPK) growth of 18.6% in 2018 was almost thrice the global RPK
growth of 6.5%.3
 India has 91 international carriers out of which 5 are domestically owned. India has air connectivity with 59 countries
through 344 routes.4
 With the industry’s US$ 30 bn contribution to India’s GDP5, the domestic aviation market is projected to rank 3rd globally by
2024.6
REASONS TO INVEST
 India is projected to be the 3rd largest aviation market by 2024, as per IATA.7
 The Indian aviation sector is likely to see investments around US$ 15 bn during 2016-20. Around one-third of this is
expected to come from the private sector.8
 Cabinet Committee on Economic Affairs has approved the extension of time and scope for revival and development of
unserved and under-served airstrips with US$ 643 mn budgetary support.9
 Ministry of Civil Aviation has received bids for 43 out of 50 airports in India, which were planned to be revived and
operationalized to improve regional and remote air connectivity. 10
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  Tremendous growth of aviation sector is also increasing the demand for MRO (Maintenance, Repair and Overhaul) facilities.
 Greater focus on infrastructure development such as Open Sky Policy and Airports Authority of India’s (AAI) drive for
modernization of airports and air navigation systems.
 Six new airports in Ahmedabad, Jaipur, Lucknow, Guwahati, Thiruvananthapuram and Mangaluru have received approval
for leasing out under the PPP mode.11
 Skill India Mission has a clear focus to leverage India's human capital potential and create job opportunities.
 Innovation and Technology –
o GPS-Aided Geo Augmented Navigation (GAGAN) is India's first Satellite-based Augmentation System. It provides
additional accuracy for safety in civil aviation and has expansion capability for seamless navigation services across
geographies.
o No Objection Certificate Application System (NOCAS) streamlines the online process of timely NOC for height
clearances of buildings around airports.
o e-Governance for Civil Aviation (eGCA) offers online delivery of 162 licensing and regulatory processes of
Directorate General of Civil Aviation (DGCA).
STATISTICS
 Domestic passenger traffic crossed the 100 mn mark in 2017, reaching 123.32 mn during 2017-18.12
 India is the fastest growing aviation market and as per IATA the Country is expected to cater to 520 mn passengers by
2037.13
 India is one of the least penetrated air markets in the world with annual domestic seats per capita at around 0.08 in March
2018. This is significantly low compared to other developing markets such as Brazil (0.65) and China (0.35) or developed
markets like the US (2.59) and Japan (1.12).14
FDI POLICY
 Airports
o 100% FDI allowed under Automatic route for both greenfield as well as brownfield projects. 15
 Air Transport Services
o Scheduled air transport service/ domestic scheduled passenger airline/ regional air transport service: Up to 49%
allowed under the Automatic route beyond which Government approval is required. 16
o Non-scheduled air transport services and helicopter services, seaplane services which require DGCA
approval: 100% FDI allowed under the Automatic route.17
 Other Services Under the Civil Aviation Sector
o Ground handling services, maintenance, repair and overhaul services, flying institutes, technical training
institutions: 100% FDI allowed under the Automatic route.18
SECTOR POLICY
 Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) 1.0 and 2.0, launched by the Government aims to connect
66 airports and 31 heliports across the Country.
 Under UDAN 3.0, proposals for 235 routes were awarded for 16 unserved airports, 17 under-served airports, 50 served
airports, and 6 water aerodromes.19
 NABH Nirman, announced in 2018-19 Union Budget, aims to expand airport capacity by more than five times to handle a
billion trips in a year. The expansion is planned to be funded by leveraging the balance sheet of Airports Authority of India.20
 Initiatives for Maintenance Repair and Overhaul (MRO) services:
o The tools and tool-kits used by the MRO have been exempted from Customs duty. The exemption shall be based on
the list of tools and tool kits certified by the Directorate General of Civil Aviation (DGCA) approved Quality
Managers of aircraft maintenance organisations. 21
o MROs were required to provide proof of their requirements of parts or orders from their client airlines. The process
for the clearance of the parts has been brought in line with that of the tool kits for one-time certification by DGCA
approved Quality Managers in MROs.22
o Restriction of one year for utilization of duty-free parts has been extended to three years to enable economies of
scale.23
o To allow the import of unserviceable parts by MROs for providing exchange/ advance exchange, the concerned
notification has been revised to enable advance export of serviceable parts. 24
o Foreign aircraft brought to India for MRO work will be allowed to stay for the entire period of maintenance or up to
6 months. For stay beyond 6 months, DGCA's permission will be required. 25
FINANCIAL SUPPORT
MRO, ground handling, cargo and Aviation Turbine Fuel (ATF) infrastructure facilities collocated at an airport, including heliport
licensed by DGCA, are covered under the ‘harmonised list of infrastructure’ in the National Civil Aviation Policy 2016. This makes
them eligible to get the benefits offered for infrastructure sector under the Policy. 26 The Regional Connectivity Scheme under the
Policy provides for following financial support:
 Revival of airstrips/ airports as No-Frills Airports at an indicative cost of US$ 7.1 mn to US$ 14.3 mn.
 Demand-driven selection of airports/ airstrips for revival in consultation with State Governments and airlines
 Viability Gap Funding (VGF) to airline operators
 Reduced Service Tax on tickets (on 10% of the taxable value) for 1 year initially
 Reduced Excise Duty at 2% on ATF picked at RCS airports.27
INVESTMENT OPPORTUNITIES
 300 business jets, 300 small aircrafts and 250 helicopters are expected to be added to the current fleet of Indian carriers
between 2017-22.28
 As per Boeing, Indian Carriers plan to increase their fleet size by 2020 to around 1,200 aircraft. 29
 Demand for MRO facilities is increasing in India due to consistent double-digit growth in the aviation sector.
 Investment opportunities worth US$ 3 bn in greenfield airports under PPP mode at Navi Mumbai (Maharashtra) and Mopa
(Goa).
 Development of greenfield airports – Government agencies project development of about 250 airports across the Country
by 2020.30
 For the development of the aviation industry in the North-East States, AAI plans to develop Guwahati as an inter-regional
hub. It also plans to develop Agartala, Imphal and Dibrugarh as intra-regional hubs.
 Indian airports are emulating the Special Economic Zone (SEZ) Aerotropolis model to enhance revenues. The model focuses
on revenues from retail, advertising, vehicle parking, security equipment and services.
KEY ACHIEVEMENTS
 FDI grew 5 times - from US$229 mn (2010-14) to US$1148 mn (2014-18) in Air Transport sector.31
 National Civil Aviation Policy (NCAP) boosted regional air connectivity. It provided an integrated ecosystem to promote
tourism and generate employment.32
 Revival and operationalisation of 160 airports.33
 Approval provided for 18 greenfield airports.34
 Operationalisation of 16 Common User Domestic Cargo Terminals (CUDCT). 35
 The GPS-Aided Geo Augmented Navigation system (GAGAN) launched.36
 A total of 75 airports were opened in 75 years of Independence while 33 new airports were started in just one year between
2016 and 2017.37
 Domestic passenger traffic crossed the 100 mn mark in 2017, reaching 123.32 mn during 2017-18.38
(4) BIOTECHNOLOGY
SUMMARY
 The Biotechnology industry in India is divided in the following segments – Biopharmaceuticals, Bio-services, Bio-agriculture,
Bio-Industrials and Bio-IT.1
 India is currently among the top 12 biotech destinations in the world and ranks third in the Asia-Pacific region.2
 The Indian biotech industry comprises of approximately 800 companies and is home to the second highest number of
United States Food & Drug Administration (USFDA) approved plants.3
REASONS TO INVEST
 The Government of India is taking steps to make the Biotechnology Industry worth US$ 100 bn by 2025. 4
 India has been following the Product Patent Regime since 2005.5
 India-UK Cancer Research Initiative has been launched in collaboration with the Cancer Research UK (CRUK). The initiative
focuses on the affordability of cancer prevention and care and explores the potential to make progress against cancer
consequences. Both the Department of Biotechnology and CRUK will invest (approximately) US$ 6.7 mn towards the
initiative.6
 15 new skill development courses for Post Graduate Certificate/Diploma have been implemented with the objective of
providing high-quality, hands-on training in tools and techniques in Medical Biotechnology, Agricultural Biotechnology and
Computational Biology.7
 The first Clean Energy International Incubator has been set up under Mission Innovation. The programme allows for start-
ups from 23 participating European Union countries to come and incubate in India and likewise start-ups from this incubator
can go to the partnering countries, thus facilitating access to global opportunities. 8
 Special purpose organisation such as Biotechnology Industry Research Assistance Council (BIRAC), a Public-Sector
Undertaking of Department of Biotechnology, have been set up to support the industry through funding, mentoring,
handholding and infrastructure support.
STATISTICS
 India’s biotech industry holds 2% of the global market share.9
 In the year 2018-19, Department of Biotechnology (DBT) published 1,194 publications. A total of 99 patent applications
were filed and 15 patents were granted.10
 The DBT has developed 83 new processes/products/technologies in the year 2018-19.11
 BIRAC has developed 5 new bio-incubators during 2018 through BioNEST scheme adding an additional high-end incubation
space taking the total space to 391,849 sq. ft.12
GROWTH DRIVERS
Page 4 of 30
  The Department of Biotechnology (DBT) has been successfully coordinating with various countries and philanthropic
organisation to run collaborating programs in different areas for Biotechnology. DBT signed a Programme of Cooperation
(PoC) with Swedish Governmental Agency for Innovation Systems (Vinnova), Sweden. Areas of cooperation include Bio-
based economy, Biomaterials, Health and life-sciences, biomedical devices, start-ups, incubators, test beds and bio-
clusters.13
 To promote the Startup India initiative, the DBT, along with BIRAC has launched various schemes and programmes. Through
the BioNEST scheme, BIRAC is supporting 4 new Bio-incubators during 2018.14
 Accelerated Translational Grant for Commercialization (ATGC) has been launched to encourage technological innovation by
providing funding opportunities for fundamental research that is aimed towards application development. 15
 The Department of Biotechnology has established Biotechnology Parks/Incubators across the country to provide
infrastructure support for development of products and services. The Biotechnology parks offer facilities to scientists and
Small and Medium Sized Enterprises (SMEs) for technology incubation, technology demonstration and pilot plant studies for
quicker commercial development of Biotechnology. So far, the department has set up nine parks in various states:
1. Biotech Park, Lucknow (Uttar Pradesh)
2. Biotechnology Incubation Centre, Hyderabad (Telangana)
3. Tidco Centre for Life Sciences Biotech Park, Chennai (Tamil Nadu)
4. The Golden Jubilee Biotech Park for Women, Chennai (Tamil Nadu)
5. Biotechnology Park Technology Incubation Centre, Guwahati, Assam
6. Biotech Incubation Centre, Cochin (Kerala)
7. Biotechnology Park, Bangalore (Karnataka)
8. Industrial Biotechnology Parks (IBTPs) (Jammu & Kashmir)
9. Chhattisgarh Biotech Park, Naya Raipur (Chhattisgarh)
For further details, please log onto Biotech Parks & Incubators.
 A Make in India Facilitation Cell (Biotechnology) has been established at Biotechnology Industry Research Assistance Council
(BIRAC) to provide support to investors and enable the dissemination of government policies. 16
FDI POLICY
 100% FDI is allowed under automatic route for Greenfield projects for pharmaceuticals.17
 74% FDI is permitted under the automatic route for Brownfield projects. Beyond 74% FDI, in Brownfield projects, is
permitted under the Government route.18
 100% FDI under the automatic route is allowed for the manufacturing of medical devices. 19
 100% FDI is allowed through the automatic route for investment in industrial parks – both new and existing.20
SECTOR POLICY
NATIONAL GUIDELINES FOR STEM CELL RESEARCH 2017
The Department of Biotechnology formulates guidelines to facilitate research in the different areas of biosciences and promotes its
use in the industry and utility among the people.
The National Guidelines for Stem Cell Research 2017 has been developed after taking into consideration several new scientific and
technical advancements as well as the perceived challenges in the field bio-medical research.
The 2017 guidelines reiterate that any stem cell use in patients, other than that for hematopoietic stem cell reconstitution for
approved indications, in investigational at present. Any stem cell use in patients must only be done within the purview of an
approved and monitored clinical trial with the intent to advance science and medicine and not as a therapy. 21
For more information, refer to National Guidelines for Stem Cell Research 2017.
GUIDELINES ON SIMILAR BIOLOGICS – REGULATORY REQUIREMENTS FOR MARKETING AUTHORIZATION IN INDIA 2016
The Guidelines on Similar Biologics prepared by Central Drugs Standard Control Organization (CDSCO) and the DBT lay down the
regulatory pathway for a Similar Biologic claiming to be similar to an already authorized reference biologic.
A similar biologic product is one which is similar in terms of quality, safety and efficacy to an approved reference biological product
based on comparability.
The guidelines address the regulatory pathway regarding manufacturing processes and safety, efficacy and quality aspects for similar
biologics, pre-market regulatory requirements and post-market regulatory requirements for similar biologics. 22
For more information, refer to Guidelines on Similar Biologics 2016.
NATIONAL BIOTECHNOLOGY DEVELOPMENT STRATEGY 2015-2020:
The cornerstone of the National Biotechnology Development Strategy 2015-2020 (NBDS 2015-2020) is to focus on building
coherence and connectivity between disciplines and bring together variegated skills across sectors to boost synergy.
10 guiding principles have been determined to drive the strategy.23
1. Building a skilled workforce and leadership
2. Revitalizing the knowledge environment at par with the growing bio-economy
3. Enhance research opportunities in basic, disciplinary and inter-disciplinary sciences
4. Encourage use-inspired discovery research
5. Focus on biotechnology tools for inclusive development
6. Commercialization of technology-nurturing innovation, translation capacity and entrepreneurship
7. Ensuring a transparent, efficient and globally leading regulatory system and communication strategy
8. Fostering global and national alliances
9. Strengthen institutional capacity and redesigned governance models
10. Create a matrix of measurement of processes as well as outcome
For more details, refer to National Biotechnology Development Strategy 2015-2020.
NATIONAL INTELLECTUAL PROPERTY RIGHTS POLICY 2016
The National Intellectual Property Rights Policy 2016 (IPR Policy 2016) lays down the future roadmap for IPRs in India.
The policy aims to create and exploit synergies between all forms of intellectual property, concerned statutes and agencies.
The objectives of the IPR Policy 2016 are listed below:24
1. Create IPR awareness
2. Stimulate generation of IPRs
3. Develop strong and effective IPR laws, which balance the interests of rights owners with larger public interest
4. Modernize and strengthen service oriented IPR administration
5. Commercialize IPRs
6. Strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements
7. Strengthen and expand human resources, institutions and capabilities for teaching, training, research and skill building in
IPRs.
For more details, please refer to National Intellectual Property Rights Policy 2016.
THE DNA TECHNOLOGY (USE AND APPLICATION) REGULATION BILL, 2018
The bill aims to regulate the use and application of DNA technology with the aim of establishing the identities of certain categories of
people, including the victims, offenders, suspects, under trials, missing persons and unknown deceased persons and provides
provision for establishment of a DNA Regulatory Board (DRB).25
For more details, refer to DNA Technology (Use and Application) Regulation Bill – 2019.
BIOSAFETY RESEARCH PROGRAMME
The main emphasis of the Biosafety Research Programme is to facilitate the implementation of biosafety procedures, rules and
guidelines under Environment (Protection) Act 1986 and Rules 1989 to ensure safety from the use of Genetically Modified Organisms
(GMOs) and products thereof in research and application to the users as well as to the environment.
For more details, refer to Biosafety Research Programme.
FINANCIAL SUPPORT
KEY HIGHLIGHTS OF BUDGET 2019-20
 An allocation of US$ 369.1 mn has been made towards the Department of Biotechnology, under the Ministry of Science and
Technology.26
 The budget allocation towards Biotechnology Research and Development stands at US$ 210.9 mn.27
 The budget allocation towards the Biotechnology Industry Research Assistance Council stands at US$ 4.4 mn. 28
INVESTMENT OPPORTUNITIES
 Various Indian States, such as Andhra Pradesh, Gujarat, Rajasthan and Telangana release their own Biotechnology policies
to promote investment in Biotechnology in their State. For example, Telangana launched the Life Sciences Policy (2015-
2020) with the aim of making Telangana the most preferred destination for life science activities, and attract new
investments worth US$ 2.89 bn in the industry by 2020.29
 The DBT has developed bioclusters across India. These bioclusters provide the industry with the technology development
and translation network that can establish India as a world-class bio-manufacturing hub.30 Under the Startup India initiative,
the DBT is setting up a biocluster in Pune and BIRAC is supporting the development of 4 additional bio-incubators during
2018 through BioNEST scheme.31
 Testing and standardization of medical devices: BIRAC and Kalam Institute of Health Technology (KIHT) have collaborated to
facilitate start-ups, entrepreneurs, researchers, academicians, incubation centres and SMEs in the field of Testing &
Standardization of Medical Devices.32
 Hybrid seeds, including GM (Genetically Modified) seeds, represents new business opportunities in India based on yield
improvement.
 BIRAC has launched an Equity based fund - AcE (Accelerating Entrepreneurs) Fund. An equity fund to address to accelerate
the growth of entrepreneurs in the field of biotechnology by lending funding support of up to - USD 150,000 for promising
ventures.
 New investment opportunities in India are in the areas of:
o Drug discovery and clinical trials
o Medical devices manufacturing
o Biosimilars
o Secondary Agriculture.
Page 5 of 30
KEY ACHIEVEMENTS
 A diagnostic test for Tuberculosis meningitis with nearly 100% sensitivity and about 91% specificity has been developed by PETROLEUM, CHEMICALS AND PETROCHEMICAL INVESTMENT REGIONS (PCPIRS)
All India Institute of Medical Sciences (AIIMS) and Translational Health Science and Technology Institute (THSTI),
Faridabad.33
 “Dementia Science Programme: Incidence/Prevalence/Risk/Intervention analysis of dementia and basic research thereof”
has been launched in India with the aim of providing reliable data regarding incidence, prevalence, biomarkers and risk and
protective factors associated with the pathology of dementia.34
 New Wheat variety Unnat PBW343 has been developed by Punjab Agricultural University, Ludhiana. The new variant of
wheat is resistant to leaf rust and stripe rust. The PBW343 has an average plant height of 100 cm, matures in around 155
days and has an average grain yield of 23.2 quintals per acre.35
 Two bacterial blight resistant Basmati Rice varieties, Pusa Basmati 1728 and Pusa Basmati 1718 have been developed by
Central Variety Release Committee after testing. These two new variants replace Pusa Basmati 1401 and Pusa Basmati
1121.36
 15 new skill development courses for Post Graduate Certificate/Diploma were implemented with an objective to provide
high-quality, hands-on training in tools and techniques in Medical Biotechnology, Agricultural Biotechnology and
Computational Biology.37
(5)CHEMICALS & PETROCHEMICALS
SUMMARY
 The Chemical industry in India provides several building blocks and raw materials for many industries, including textiles,
paper, paints, soap and detergents, pharmaceuticals, agrochemicals etc. 1
 The Chemical industry (including fertilizers and pharmaceuticals) in India stands at US$ 163 bn as of 2018. 2
 The global chemical industry is estimated to be worth US$ 4.7 tn. The Chemical industry in India contributes 3.4% to the
global chemical industry.3
 The Chemical industry in India employs more than 2 mn people as on 2018. 4
 The current per capita consumption of chemical products in India is 1/10 th of the world average.5
REASONS TO INVEST
 India's Chemical Industry ranks at the 6th position in the world and 4th position in Asia in terms of size.6
 A large part of the growing Chemical industry is currently served through manufacturing done outside the country. 7
 India ranks 17th in the world export of chemicals (excluding pharmaceutical products) and ranks 7th in the world imports of
chemicals (excluding pharmaceuticals products).8
 The value additions in the petrochemicals chain offer immense possibilities and cater to the needs of textiles and clothing, For more details on the PCPIRs, refer to PCPIR Policy.
agriculture, packaging, infrastructure, healthcare, furniture, automobiles, information technology, power, electronics and PLASTIC PARKS
telecommunication, irrigation, drinking water, construction and a variety of other articles of daily and specialized usage
amidst other emerging areas.9
 The Indian market offers a large population and a strong export demand. 10
 In recent times, there has been a global shift towards Asia as the world’s chemical manufacturing hub. 11
 Rise in GDP and purchasing power generates huge growth potential for the domestic market.12
 Availability of a large pool of skilled science professionals.13
 India offers world class engineering facilities and strong R&D capabilities. 14
For more details, refer to Scheme for Setting Up Plastic Parks.
 The per capita consumption of chemicals is lower in India, compared to western countries, therefore presenting immense
NATIONAL POLICY ON PETROCHEMICALS
scope for new investments.15
STATISTICS
 The Chemical industry in India is expected to grow at 9% per annum to reach US$ 304 bn by FY 2025. 16 The growth is
expected to be driven by rising demand in end-use segments for Specialty Chemicals and for petrochemical intermediates. 17
 In 2015-16, the Chemical and Chemical Products industry accounted for 2.39% of the GVA, compared to 2.23% in 2014-15.18
 The production of major chemicals and petrochemicals between April-September 2017 was 12,816 thousand metric tonne
(MT), compared to 12,906 thousand MT between April-September 2016.19
 The production of major chemicals between April-September 2017 stood at 5307 thousand MT, compared to 5087
thousand MT during April-September 2016.20
 Alkali chemicals account for 69% of the total production of major chemicals. 21
 The production of Basic Major Petrochemicals between April-September 2017 was 7,509 thousand MT, compared to 7,819
thousand MT between April-September 2017.22
 Polymers account for approximately 59% of the total production of basic major petrochemicals. 23
 The value of chemicals and chemical products exported for the period April-September 2017 stood at US$ 14.2 bn.24
 The share of export of Chemicals and Petrochemicals is 10.3% of the total national export in 2016-17.25
 The value of imports of Chemicals and Petrochemicals for the period April-September 2017 stood at US$ 21.9 bn.26
FDI POLICY For more details, refer to National Policy on Petrochemicals.
 100% FDI is allowed under the automatic route in the Chemical industry, except in the case of hazardous chemicals. CHEMICALS PROMOTION DEVELOPMENT SCHEME
SECTOR POLICY
 The Government of India has conceptualized PCPIRs as clusters that provide investors with a transparent and investment
friendly policy and facility regime. PCPIRs have high-class infrastructure and provide a competitive environment conducive
for setting up businesses.
 Each PCPIR is a specifically delineated region spread over an area of about 250 sq. km. These areas will have manufacturing
facilities, along with associated logistics and other services. The required infrastructure along with a non-processing area
will be developed, to include residential, commercial and other social and institutional infrastructure.
 The minimum processing area for the PCPIR will be about 40% of the total designated area, i.e., around 100 sq. km.
 The Ministry of Chemicals & Petrochemicals has set up four PCPIRs in Dahej (Gujarat), Vishakhapatnam-Kakinada (Andhra
Pradesh), Paradeep (Odisha), and Cuddalore and Nagapattinam (Tamil Nadu).27
 The projected investment on full realisation of PCPIRs is US$ 1091.4 bn.28
 As of November 2018, investments worth US$ 261.8 bn have been and committed and more than 300,000 persons have
been employed in direct and indirect activities related to PCPIRs.29
 The following progress has been made in PCPIRs30 (as of July 2018):
o Dahej PCPIR:
 Area: 453 sq. km.
 Actual investment made/committed: US$ 12.2 bn
 Employment generated: 132,000 personnel
o Vishakhapatnam-Kakinada PCPIR:
 Area: 640 sq. km.
 Actual investment made/committed: US$ 6.3 bn
 Employment generated: 111,000 personnel
o Paradeep PCPIR:
 Area: 284.15 sq. km
 Actual investment made/committed: US$ 6.43 bn
 Employment generated: 38,000
o Cuddalore and Nagapattinam PCPIR:
 Area: 256.83 sq. km.
 Actual investment made/committed: US$ 1.2 bn
 Employment generated: 13,950
 The Department of Chemicals and Petrochemicals has formulated the scheme for setting up Plastic Parks with the objective
of synergizing and consolidating the various units of the Indian Plastics Industry. 31
 The units will be consolidated through the cluster development approach. The Government of India will provide grant
funding of up to 50% of the project cost subject to a ceiling of US$ 5.7 mn. 32 The remaining project cost is to be funded by
the State Government or State Industrial Development Corporation.
 Plastic Parks in States of Madhya Pradesh, Odisha, Jharkhand33, Uttar Pradesh34, Assam & Tamil Nadu are being set up under
the scheme of Plastic Parks.
 The National Policy on Petrochemicals aims to achieve sustainable development for the petrochemical industry by
promoting research and development and human resource planning and development to cater to the needs of the industry
by adopting a mission mode approach.35
 A programme on Petrochemical Development is required to improve existing petrochemical technology and research in the
country and to promote the development of new applications of polymers and plastics. Centre(s) of Excellence (COE) are
being set up for this reason and will be one of the components of the programme.
 COEs will be set up in existing educational and research institutions working in the field of polymers, and include the
following:
o Updating and modifying products for new uses
o Innovative product technology and product designs
o Improving production processes to make them more efficient
o Development of biopolymers and biodegradable polymers
 The COEs are expected to emerge as internationally recognised centres for the analysis and dissemination of existing global
knowledge, provide authoritative, strategic and timely information to organizations and companies to use in the
development and implementation of their projects/programmes, which engaging in path-break R&D efforts.36
 5 COEs have been set up in Pune, Chennai, Delhi, Bhubaneshwar and Guwahati.
Page 6 of 30
The aim of the Chemicals Promotion Development Scheme (CPDS) is promotion and development of chemical and petro-chemical
industry by extending financial support to conduct of seminars, conferences, exhibitions, conducting studies/consultancies, for
facilitating growth as well as analysing critical issues affecting the chemical and petrochemical industry.
For more details, refer to Chemical Promotion Development Scheme.
CENTRAL INSTITUTE OF PLASTIC ENGINEERING AND TECHNOLOGY
The Central Institute of Plastic Engineering and Technology (CIPET) has been set up to develop manpower in different disciplines of
Plastics Engineering and Technology. The CIPET has a variety of activities and programs focusing on skill training, technology support,
academics and research.
For more details, refer to Central Institute of Plastic Engineering and Technology.
FINANCIAL SUPPORT
R&D INCENTIVES FOR INDUSTRY AND PRIVATE SPONSORED RESEARCH
 A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act.
 Weighted deduction of 200% is granted to assess for any sums paid to a national laboratory, university or institute of
technology, or specified people with a specific direction and that the said sum is used for scientific research within a
program approved by the prescribed authority.
MANUFACTURERS WITH AN IN-HOUSE R&D CENTRE
 Section 35 (2AB) of the Income Tax Act, 1961 provides weighted tax deduction of 150% of the expenditure incurred by a
specified company, on scientific research in the in-house R&D centres as approved by the prescribed authority. This does
not include expenditure on the cost of any land or building.
 The weighted tax deductions of 150% are effective till 31st March’2020. Consequent to that, the weighted tax deductions
will be 100%.
STATE INCENTIVES
 Apart from the above, each state in India offers additional incentives for industrial projects.
 Incentives are in areas like subsidized land cost and relaxation in stamp duty exemption on sale/lease of land, power tariff
incentives, concessional rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies, special
incentive packages for mega projects etc.
EXPORT INCENTIVES
 Export promotion capital goods scheme
 Duty drawback scheme
 Merchandise Export from India Scheme
AREA-BASED INCENTIVES
 Incentives for units in Special Economic Zones (SEZ)/National Investment and Manufacturing Zones (NIMZ) as specified in
respective Acts or setting up projects in special areas like the North-east, Jammu & Kashmir, Himachal Pradesh &
Uttarakhand.
KEY POINTS IN THE UNION BUDGET 2019-20
 The total allocation towards the Department Chemicals and Petrochemicals is US$ 37.7 mn. 37
 The total allocation towards the Assam Gas Cracker Project stands at US$ 14.3 mn. 38
 Under the Budget 2019-20, the allocation made towards the Chemical Promotion and Development Scheme is US$ 0.4
mn.39
 The total allocation towards the Central Institute of Plastic Engineering and Technology stands at US$ 11.4 mn.40
 The allocation towards the Promotion of Petrochemicals stands at US$ 4.5 mn. 41
INVESTMENT OPPORTUNITIES
AGRO-CHEMICALS
The Indian Agro-Chemicals market is worth US$ 2.5 bn.42 There is a huge opportunity for the Indian market to grow fast with the
expected CAGR being pegged at 8%.43 India holds the second place in the world accounting for 7.7% of global agricultural output.
However, the per hectare productivity is very low (3 MT per hectare) compared to the world average of 4 MT per hectare due to lack
of scientific methods of agriculture.44 The losses in agriculture account for 12.46% of the total agricultural output. 45
The Agro-Chemical industry in India therefore requires:
 newer and safer products
 integrated agrochemical plants
 export oriented plants.46
FINE & SPECIALTY CHEMICALS
India produces many fine and speciality chemicals, which have very specific uses and are essential for increasing industrial
production. These special chemicals find wide usage as food additives and pigments, polymer additives, anti-oxidants in the rubber
industry, etc.47
Indian specialty chemicals industry is expected to account for 5% of Global Specialty Chemicals by 2020.
KEY ACHIEVEMENTS
 0.44 mn MT Per Annum Polypropylene Plant commissioned at Mangalore.48
 Assam Gas Cracker Project – Brahmaputra Cracker & Polymer Limited (BCPL) is operating at 100% capacity.49
 Five plants of the Fertilizer Corporation of India Limited (FCIL) are being revived. The plants are in Barauni, Sindri,
Gorakhpur, Ramagundam and Talcher.50 For more information, please log onto FCIL.
 The Government of India has given the go ahead to set up 4 Petroleum, Chemical and Petrochemical Investment Regions
(PCPIRs) in Dahej (Gujarat), Vishakhapatnam-Kakinada (Andhra Pradesh), Paradeep (Odisha) and Cuddalore-Nagapattinam
(Tamil Nadu).51 These PCIRs are expected to attract an investment of about US$ 108.9 bn and generate employment for
around 3.4 mn people. The PCPIRs are currently at different stages of implementation. 52
 Between April-November 2018, the Central Institute of Plastic Engineering and Technology (CIPET) has trained 28,774
students through various long term and short-term skill development programmes.53
 Two new Plastic Parks are being set up in the states of Jharkhand and Madhya Pradesh.5
(6)CONSTRUCTION
SUMMARY
Infrastructure plays a huge role in propelling other industries and India’s overall development. The government therefore focuses on
the development of infrastructure and construction services through focused policies such as open FDI norms, large budget
allocation to infrastructure sector, smart cities mission, etc. 1
1. Investment of US$ 31.7 bn has been proposed by 99 cities under the Smart City initiative.
2. The government targets to build five crore homes over the next five years
3. Construction development and construction (infrastructure) activities accounted for approximately 6% and 3.5% of the
percentage of total FDI equity inflows2 between April 2000 and March 2019. The value of equity inflows for construction
development and construction (infrastructure) between April 2000 and March 2019 stands at US$ 25 bn and US$ 14.8 bn
respectively.3
REASONS TO INVEST
 Construction industry in India will remain buoyant due to increased demand from real estate and infrastructure projects.
 Indian Real Estate sector is expected to reach a market size of US$ 180 bn by 2020 and US$ 1 tn by 2030. It’s contribution to
the country’s GDP is expected to be approximately 13%.4
 India’s construction industry is expected to grow at an annual average of 6.6% between 2019 and 2028.5
 The share of urban population is expected to be 50% of the total by 2050. 6
 Present levels of urban infrastructure are inadequate to meet the demands of the existing urban population. There is need
for re-generation of urban areas in existing cities and the creation of new, inclusive smart cities to meet the demands of
increasing population and migration from rural to urban areas. Future cities of India will require smart real estate and urban
infrastructure.
 To provide quality urban services on a sustainable basis in Indian cities, the need of the hour is that urban local bodies
(ULBs) enter into partnership agreements with foreign players, either through joint ventures, private sector partners or
through other models.
STATISTICS
 The share of construction in Gross Value Added (GVA) was about 7.3 for India in 2017-18. As of 2017, the construction
industry employed 49.8 mn people.7
 Investments valued at US$ 965.5 mn will be required by the infrastructure sector by 2040.8
FDI POLICY
100% FDI through the automatic route is permitted in the following construction (development) projects: 9
 Development of townships
 Construction of residential/commercial premises
 Construction of roads or bridges
 Construction of hotels, resorts
 Construction of hospitals, educational institutions
 Construction of recreational facilities
 Construction of city and regional level infrastructure
FDI Limit for real estate projects within Special Economic Zones (SEZs) raised to 100%.
FDI limit for industrial parks under the automatic entry route is 100%. 10
SECTOR POLICY
SMART CITIES MISSION
The objective of the Smart Cities Mission is to promote cities that provide core infrastructure and give a decent quality of life to its
citizens, a clean and sustainable environment and application of ‘Smart’ solutions.11
The core infrastructure elements in a smart city would include:12
1. Adequate water supply
2. Assured electricity supply
3. Sanitation, including solid waste management
4. Efficient urban mobility and public transport
5. Affordable housing, especially for the poor
Page 7 of 30
 6. Robust IT connectivity and digitalisation II. Increase the amenity value of cities by developing greenery and well maintained open spaces (e.g. parks)
7. Good governance, especially e-Governance and citizen participation III. Reduce pollution by switching to public transport or constructing facilities for non-motorized transport
8. Sustainable environment US$ 858 mn was the budget allocation in the Union Budget 2018-19 for the AMRUT scheme.28
9. Safety and security of citizens, particularly women, children and the elderly Many of the government schemes related to construction converge in their goals, although the path they choose may be different.
10. Health and education There is a strong link between AMRUT and the Smart Cities mission – while AMRUT aims to achieve urban transformation using the
 Global Housing Technology Challenge-India (GHTC-I) aims to bring the most innovative construction technologies to India project-based approach, the Smart Cities Mission follows an area-based strategy.29
through a competitive platform. It aims to give a boost through the development of domestic technological research, and For schemes in the construction industry to be effectively planned and implemented, cities must seek convergence between the
building platforms for knowledge sharing and networking across the sector.13 The budget allocation for the Smart Cities State/Central Government Programs/Schemes and AMRUT, Swachh Bharat Mission, National Heritage City Development and
Mission in the Union Budget 2018-19 was US$ 29.2 bn.14 Augmentation Yojana (HRIDAY), Digital India, Skill development, Housing for All, etc.
SWACHH BHARAT MISSION FINANCIAL SUPPORT
The Swachh Bharat Mission (SBM) is a cleanliness campaign by the Government of India.15 STATE INCENTIVES
The objectives of the SBM are: Apart from the above, each state in India offers additional incentives for investments and special incentive packages for mega
1. Elimination of open defecation projects.
2. Eradication of Manual Scavenging INCENTIVES FOR DEVELOPING SEZ/EMC'S/OTHER SECTORAL CLUSTERS
3. Modern and Scientific Municipal Solid Waste Management The major incentives and facilities available to Special Economic Zone (SEZ) developers include:
4. To effect behavioural change regarding healthy sanitation practices  Exemption from customs/excise duties for development of SEZs for authorised operations approved by the Board of
5. Generate awareness about sanitation and its linkage with public health Approval.
6. Capacity augmentation for Urban Local Bodies (ULBs)  Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years, in 15 years
7. Create an enabling environment for private sector participation in Capex (capital expenditure) and Opex (operation and under Section 80-IAB of the Income Tax Act.
maintenance).16  Exemption from Central Sales Tax (CST).
The SBM has been divided into two categories – Urban and Gramin (rural). The Ministry of Housing and Urban Affairs implements it  Exemption from Service Tax (Section 7, 26 and the Second Schedule of the SEZ Act).
in urban areas and the Ministry of Drinking Water and Sanitation implements it in rural areas. The above-mentioned ministries work INCENTIVES FOR DEVELOPING ELECTRONIC MANUFACTURING CLUSTERS
with all other union ministries, state governments, local institutions, NGOs, faith organizations, media and other stakeholders to Brownfield Electronic Manufacturing Clusters (EMC): The assistance will be restricted to 75% of project costs, subject to the ceiling of
ensure the wide and proper implementation of the SBM. 17 US$ 7.15 mn. The remaining project cost will be financed by other stakeholders of the EMC with a minimum industry contribution of
Rural sanitation coverage has increased from 38.7% in 2014 to 96.9% as of 5 December 2018.18On the urban front, 3,574 cities have 15% of the project cost.
been declared defection free, 5.4 mn plus individual toilets have been constructed, 464,250 community & public toilets have been Greenfield EMC: The assistance will be restricted to 50% of the project cost subject to ceiling of US$ 7.15 mn for every 100 acres of
constructed and 88.4 MW of waste has been converted to energy.19 land. The remaining project cost shall be financed by other stakeholders of EMC with a minimum industry contribution of 25% of the
In a big boost to the SBM (Gramin), the World Bank, in December 2015, approved a US$ 1.5 bn loan for the SBM Support Operation project cost.
project. The World Bank is also providing parallel assistance of US$ 25 mn as technical assistance to build the capacity of select state The administrative expenses are to be restricted to 3% of the central assistance in the project. Expenses towards the preparation of a
governments in implementing community-led behavioural change programmes targeting social norms to help ensure widespread detailed project report will also be considered a part of project cost.
usage of toilets by rural households.20 AREA BASED INCENTIVES
For more details, please refer to SBM (Urban) and SMB (Gramin). Incentives for units in SEZ/NIMZ as specified in respective acts or the setting up of projects in special areas such as the North-east,
HERITAGE CITY DEVELOPMENT AND AUGMENTATION YOJANA (HRIDAY) Jammu & Kashmir, Himachal Pradesh & Uttarakhand.
The National Heritage City Development and Augmentation Yojana (HRIDAY) has been launched to preserve and revitalise the soul of KEY HIGHLIGHTS FROM UNION BUDGET 2019-20
Indian heritage cities to reflect the city’s unique character by encouraging aesthetically appealing, accessible, informative and a  Total allocation to the Ministry of Housing and Urban Development stands at US$ 6.8 bn. 30
secure environment.21  Total budget allocation for Pradhan Mantri Awas Yojana stands at US$ 980.3 mn.31
12 cities have been identified to implement the program – Amjer, Amaravati, Amritsar, Badami, Dwaraka, Gaya, Kancheepuram,  Allocation towards AMRUT stands at US$ 1 bn.32
Mathura, Puri, Varanasi, Velankanni and Warangal.22  Smart Cities Mission has been allocated US$ 944 mn.33
As of December 2018, 20 projects amounting to US$ 20 mn have been completed in in Ajmer, Amaravati, Amritsar, Badami,  Swachh Bharat Mission (Urban) has been allocated US$ 393.4 mn.34
Dwaraka, Puri and Varanasi.23 For more details, please refer to HRIDAY.  Total budget allocation towards Swachh Bharat Mission (Gramin)stands at US$ 1.43 bn.35
GST REGIME IMPLICATIONS INVESTMENT OPPORTUNITIES
 Under the GST regime (revised), promoters are to pay 1% (without input tax credit) GST in case of affordable houses and 5%  Construction development in residential, retail, commercial and hospitality sectors, development of townships
(without input tax credit) on construction of houses other than affordable houses. 24 Commercial properties will continue at
 Construction of roads, bridges, hotels, resorts
the same GST rate of 12% with input tax credit.
 Technologies and solutions for smart, sustainable and connected cities and integrated townships
 GST is not applicable to completed and ready-to-move-in projects, as there are no indirect taxes applicable in the sale of
 Technologies for the promotion of low cost and affordable housing
such properties.
 Green building solutions
REAL ESTATE REGULATION AND DEVELOPMENT ACT 2016
 Sustainable and environmentally friendly building materials.
The Real Estate Regulation and Development Act (RERA), 2016, set up in November 2016, aims to reform the real estate sector in
India by encouraging greater transparency, citizen centricity, accountability and financial discipline. 25  Training and skill development of construction sector workers
The act will also protect consumers by creating an online system for information sharing so that a mutual trust can develop between  Urban water supply, urban sewerage and sewage treatment.
developers and buyers and to facilitate timely completion of projects. (7)DEFENCE MAN UFACTURING
PRADHAN MANTRI AWAS YOJANA (URBAN – HOUSING FOR ALL SUMMARY
The Pradhan Mantra Awas Yojana (PMAY) aims to provide housing for all by 2022 and is being implemented from June 2015. PMAY  India is among the top 5 countries spending on defence.1
provides central assistance to Urban Local Bodies (ULBs) and other implementing agencies through States/UTs for in-situ  India has the 2nd largest standing army in the world.2
rehabilitation of existing slum dwellers using land as a resource with private participation; credit linked subsidy, affordable housing in  As per the FY 2018-19, the allocation for defence in India's budget is around US$ 45.61 bn 3(excluding defence pension).
partnership and subsidy for beneficiary-led individual house construction/enhancement. 26 Around 1/3rd of this amount is allocated for capital expenditure.
The total investment (as of December 2018) involved in the PMAY (Urban) is US$ 50 bn. 27  Foreign vendors provide for more than 50% of defence equipment procured. This offers a huge opportunity for import
ATAL MISSION FOR REJUVENATION AND URBAN TRANSFORMATION (AMRUT) substitution.4
The purpose of the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is to: REASONS TO INVEST
I. Ensure that every household has access to a tap with assured supply of water and a sewerage connection

Page 8 of 30
 1. India’s requirements on defence are catered largely by imports. The opening of the Defence sector for private sector
participation will help foreign Original Equipment Manufacturers (OEMs) to enter into strategic partnerships with Indian
companies. This will enable them to leverage the domestic markets as well as aim at global markets. Besides helping in
building domestic capabilities, it will also bolster exports in the long term.
2. During 2016 and 2018, 21 defence offset contracts worth US$ 5.56 bn approximately were signed. 5
3. The offset policy stipulates the mandatory offset requirement of a minimum of 30% for procurement of defence equipment
with foreign defence players. It is applicable on categories of procurements where the estimated cost of the acquisition
proposal is US$ 286.04 mn or more.6It would also ensure that an eco-system of suppliers is built domestically.
4. Favourable government policy which promotes self-reliance, indigenisation, and technology upgradation. The policies also
aim at achieving economies of scale, including the development of capabilities, for exports in the defence sector.
5. India’s extensive modernisation plans with an increased focus on homeland security and growing attractiveness as a
defence sourcing hub.
STATISTICS
 India has the 2nd largest standing army in the world.7
 India was the 2nd largest importer of arms during 2014-18 with a share of 9.5% of the total world imports. During 2009-13,
India was the largest imported with 13% of the world’s share.8
 Around 1/3rd of the allocation to defence (excluding defence pensions) in the budget is allocated for capital expenditure.8
 Capital allocation for the Ministry of Defence is 32.19% of the total Central Government capital expenditure in 2019-20
Budget Estimate. The allocation for Defence in India's budget in 2019-20 is around US$ 45.61 bn (excluding defence
pension).9
 More than 50% of defence equipment procured between March 2014 and November 2017, were signed with foreign
vendors. This offers a huge opportunity for import substitution. 10
GROWTH DRIVERS
 Defence Production Policy, 2011 has encouraged indigenous manufacturing of defence equipment. Draft Defence
Production Policy was introduced 2018.11
 Defence Procurement Procedure (DPP), 2011 was amended in 2016 to provide for the following:
1. DPP focuses on institutionalising, streamlining and simplifying defence procurement procedure to give a boost to
“Make in India” initiative. It aims to promote indigenous design, development and manufacturing of defence
equipment, platforms, systems and sub-systems. It also aims to enhance the role of MSMEs in the Defence
industry.
2. A new category of capital procurement: Buy Indian - Indigenously Designed, Developed and Manufactured (IDDM)
introduced to encourage indigenous design, development and manufacturing of defence equipment.
3. Preference is given to ‘Buy (Indian- IDDM)’, ‘Buy (Indian)’ and ‘Buy and Make (Indian)’ over ‘Buy (Global)’ category
for capital acquisition. A clear and unambiguous definition of indigenous content is provided.
4. Provision for Maintenance Transfer of Technology (MToT) to Indian partners.
5. Provisions to allow foreign Original Equipment Manufacturer (OEM) to select Indian Production Agency (PA).
6. The requirement of minimum indigenous content is rationalised.
7. ‘Services’ as an avenue for discharging offsets is re-introduced.12
 Defence products list for industrial licensing was articulated in June 2014. It excluded large numbers of parts/components,
castings/ forgings from the purview of industrial licensing.13
 A revised list was published by the government in January 2019.14 The Defence Security Manual for the licenced defence
industries is available in the public domain. The manual clarifies the security architecture required to be put in place by the
industry while undertaking the manufacturing of sensitive defence equipment. 15
 MAKE procedure aims to promote research & development in the industry with support from the government and the
placement of orders, has been promulgated with provision for 90% funding by Government and preference to MSMEs in a
certain category of projects.16
 The simplified MAKE-II was launched in January 2018, for simplification of collaboration between government and private
Indian industries for indigenous design, development and manufacture of defence equipment.17
FDI POLICY
 100% FDI in the Defence industry: Up to 49% under the automatic route and FDI above 49%: through Government route,
where it is likely to result in access to modern technology.18
 The Defence industry is subject to industrial licenses under the Industries (Development and Regulation) Act, 1951 and
manufacturing of small arms ammunition under Arms Act, 1959. 19
 The requirement of a single largest Indian ownership of 51% of equity removed. 20
 A lock-in period of 3 years on equity transfer has been done away with in FDI for Defence. 21
 FDI in the Defence industry is subject to Security Manual Guidelines.
SECTOR POLICY
PROCUREMENT POLICY
 The defence procurement is governed by the Defence Procurement Procedure (DPP 2016).
 The latest revision of DPP was released in March 2016.
 DPP focuses on institutionalising, streamlining and simplifying defence procurement procedure to give a boost to “Make in
India” initiative.
OFFSET POLICY
 The key objectives of the defence offset policy are to leverage capital acquisitions to develop the domestic Defence
industry. The policy stipulates the mandatory offset requirement of a minimum of 30% for procurement of defence
equipment by foreign defence players. It is applicable on categories of procurements where estimated cost of the
acquisition proposal is US$ 286.04 mn or more.22
PROCEDURES FOR THE GRANT OF INDUSTRIAL LICENSES HAVE BEEN STREAMLINED
 The initial validity period of industrial licenses has increased from 3 years to 15 years. It also has a provision to grant an
extension for a period of 3 years.23
 Guidelines for the extension of validity of industrial licenses have been issued. Partial commencement of production is
treated as the commencement of production of all the items included in the licence. 24
FINANCIAL SUPPORT
KEY PROVISIONS OF UNION BUDGET: 2017-18, 2018-19 AND 2019-20
 Development of 2 Defence-related industrial production corridors
 Announcement of an industry-friendly Defence Production Policy 2018 to promote domestic production by the public
sector, private sector and MSMEs.
 Defence Budget has reached US$45.61 bn in 2019-2025
INVESTMENT OPPORTUNITIES
 Supply chain sourcing opportunity.
 Modernization of armed forces – around US$ 130 bn opportunities by 2025
 Infrastructure development - Manufacturing cluster and park planned in Pune and Dholera
 R&D - US$ 15.4 mn allocated to set up ‘Technology Development Fund’
 Defence products manufacturing - Indigenously designed, developed and manufactured (IDDM) is the new method of
capital procurement 26
KEY ACHIEVEMENTS
 Indigenous defence products unveiled - Akash Surface to Air Missile System, Dhanush Artillery Gun system and Light
Combat Aircraft
 The Defence Procurement Procedure (DPP) amended to introduce Buy Indian-IDDM (Indigenously Designed, Developed and
Manufactured)
 The policy on Strategic Partnerships to encourage the participation of the private sector, in the manufacture of defence
platforms and equipment such as aircraft, submarines, helicopters and armoured vehicles.
 ‘No Objection Certificate (NOC) for export: A web-based single window interface created to issue 'No Objection Certificate'.
The process is transparent and time-bound, with the maximum processing time reduced to 25 days and 70% of the NOCs
issued in 15 days.
 The 10th edition of 'DefExpo' was organised from April 11 to 14, 2018 in Chennai, Tamil Nadu.
 The Government of India has decided to set up two Defence Production corridors, one each in Uttar Pradesh (UP) and Tamil
Nadu.
 A Defence Investor Cell is also functional in the Department of Defence Production.
 The maiden flight of indigenously developed Automatic Flight Control System (AFCS) integrated on LCH was conducted
successfully by Hindustan Aeronautics Limited (HAL).28
(8)ELECTRICAL MACHIN ERY
SUMMARY
 Total production of the Electrical Equipment industry in India stood at US$27.3 bn in 2017-18.1
 The sector contributes about 8.1% to the manufacturing sector in terms of value, and 1.35% to the overall GDP. 2
 The Electrical Machinery industry in India is expected to value US$100 bn by 2022.3
 The Electrical Machinery industry is projected to provide employment, both directly and indirectly, to 3.5 million people by
2022.4
REASONS TO INVEST
 Indian Electrical Equipment Industry Mission Plan (2012-22), aims to make India as a preferred country for production of
electrical equipment. It also aims to achieve an output of US$100 bn by balancing the trade deficit.5
 By 2022, domestic demand for generation equipment industry, is expected to be in the range of US$25-30 bn. For
transmission & distribution industry, it is estimated US$70-75 bn.6
 Market-oriented reforms, such as the target of ‘Power for All’ plans to add 93 GW during 2017-2022. It is expected to
generate huge demand for power transmission & distribution equipment. 7
 Incentives for capacity addition in power generation will increase the demand for electrical machinery. 8
 Indian manufacturers are becoming more competitive, in terms of product designs, manufacturing and testing facilities. 9
Page 9 of 30
  A large pool of human resources and adequate workforce available for the sector. It is projected to provide direct
employment to 1.5 million people and indirect employment to 2 million people by 2022.10
 Increasing scope for direct exports to neighbouring countries due to signing of new trade agreements and increasing
effectiveness of SAARC.
 Investments in research and development in the electrical machinery industry are amongst the largest in India’s corporate
sector.11
 A comparative advantage in terms of manufacturing costs, market knowledge, technology, and creativity. 12
 Capacity creation in sectors such as infrastructure, power, mining, oil and gas, refinery, steel, automotive and consumer
durables are driving demand in the engineering sector. 13
 Rapid increase in infrastructure investments and industrial production will fuel further growth.
 The government plans to establish Electrical Equipment industry clusters, along with building strong support
infrastructure.14
 The sector, with a robust supply chain, has a diversified, matured and strong manufacturing base. 15
STATISTICS
 Electrical equipment industry broadly comprises of two segments - Generation Equipment like boilers, turbines, generators;
Transmission & Distribution (T&D); and allied equipment like transformers, cables, transmission lines, switch gears,
capacitors, energy meters, instrument transformers, etc.16
 The T&D equipment sector dominates the sector making up for 85% of the industry, whereas generation equipment sector
accounts for the rest 15%.17
 The industry registered a double-digit growth rate of 11.2% in FY 2018-19.18
 With a CAGR of 13.7%, exports of electrical machinery and equipment rose from US$5.3 billion in 2013-14 to US$8.9 bn in
2017-18.19
 The sector contributes about 8% to manufacturing sector in terms of value, and 1.5% to the overall GDP. 20
 The heavy industry sub-sector provides direct employment to 0.5 mn people, indirect employment to 1 mn, and over 5 mn
across the entire value chain.21
 Major export markets for the sector are United States of America, United Arab Emirates, Germany, and United Kingdom. 22
 India is a major exporter of switchgear and control-gear, transformers and its parts, industrial electronics, cables,
transmission line towers, conductors, rotating machines (motors, AC generators, and generating sets) and its parts, within
the sector.23
 Energy meters, cables (both low and high voltage), and distribution transformers witnessed more than 20% domestic
growth during 2018-19 in India.24
 Within the sector, high domestic output sub sectors are cables, transmission line towers, and LT switchgears (including
panels), having industry size worth US$7 bn, US$2.69 bn, and US$2.26 bn respectively.25
 The demand for inter-regional transmission system, which comprises of transmission lines and associated substations, is
projected to have a peak demand of 226 GW during 2021-22.26
 India managed to jump 113 places (from 137 in 2014 to 24 in 2018) in ‘Getting Electricity’ parameter of World Bank’s Doing
Business ranking.27
 Transmission lines witnessed a 26 % increase from 2, 91,336 circuit kilometre (ckm) in March 2014 to 3, 66,634 ckm in
March 2017.28
FDI POLICY
100% FDI is allowed under the automatic route in the electrical machinery sector, subject to all applicable regulations and laws. 29
SECTOR POLICY
DE-LICENCING
The electrical machinery industry has been de-licensed, along with 100% FDI allowed in this sector. This has facilitated the entry of
major global players into the electrical machinery industry in India. 30
VISION 2022 FOR THE INDIAN ELECTRIC MACHINERY EQUIPMENT INDUSTRY
To make India as a preferred country for production of electrical equipment. It also aims to achieve an output of US$100 bn by
balancing the trade deficit.31
Areas of focus include: - Technology and R&D - Lowering of customs duties on a range of equipment - Setting up of the Electrical
Equipment Skill Development Council (EESDC) - Establishment of electrical equipment industry clusters - Enhancement of product-
testing infrastructure in the country - Provide credit support to economically less-developed export markets.32
FINANCIAL SUPPORT
TAX DEDUCTION FOR IN-HOUSE R&D CENTRE
A weighted tax deduction of 200% under Section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred
on scientific research and development. Expenditure on land and buildings are not eligible for deduction. 33
STATE INCENTIVES
Apart from the above, each state in India offers additional incentives for industrial projects. Incentives are in areas like subsidised
land cost, relaxation in stamp duty, exemption on the sale/lease of land, patent subsidy, power tariff incentives, a concessional rate
of interest on loans, investment subsidies/tax incentives, backward areas subsidies, special incentive packages for mega projects, etc.
EXPORT INCENTIVES
Various incentives are provided under Export Promotion Capital Goods scheme, Duty Remission scheme, Focus Product scheme,
Special Focus Product scheme, Focus Market scheme.
SKILL DEVELOPMENT
Steps taken for Skill Development, such as setting up of Electrical Equipment Skill Development Council (EESDC), would help to
bridge the skill gap required for critical manufacturing. It has a clear objective to enhance exports. 34
AREA-BASED INCENTIVES
The government approved 15 SEZs for the engineering sector, and electrical machinery is a part of the sector. Further, development
of Delhi –Mumbai Industrial sector is expected to provide a big boost to the engineering sector. 35
INVESTMENT OPPORTUNITIES
 Generation Equipment: Boilers, Turbines, Generators
 Transmission Equipment: Transformers
 Distribution Equipment: Switch Gears, Controls
 Others: Electrical Motors, Wires and Cables
(9)ELECTRONIC SYSTEM S
SUMMARY
 The Electronics System Design & Manufacturing (ESDM) industry includes electronic hardware products and components
relating to information technology (IT), office automation, telecom, consumer electronics, aviation, aerospace, defense,
solar photovoltaic, nano electronics and medical electronics. The industry also includes design-related activities such as
product designing, chip designing, Very Large-Scale Integration (VLSI), board designing and embedded systems.
 The Indian electronics market is one of the largest in the world and is expected to value US$ 400 bn in 2020. 1
 India’s digital base is the second largest in the world and is growing at the second-fastest rate among the 17 leading
economies.2
 The Digital India Program has been transforming the Country into a digitally empowered society and knowledge economy
since its launch in July 2015.3
 India is the third biggest start-up hub in the world.4 In 2018 alone, 1200 new tech start-ups were added.5
REASONS TO INVEST
 India is home to considerable talent for electronic chip design and embedded software.
 Electronic Manufacturing Services (EMS) industry is expected to be a significant contributor to the entire industry’s
development.
 India has strong design and R&D capabilities in auto electronics and industrial economics.
 The Government is promoting the development of Electronics Manufacturing Clusters (EMCs) throughout the Country to
provide world-class infrastructure and facilities.
 India’s mobile-gaming market is expected to be worth US$ 1.1 bn by 2020 and the number of users is projected to reach 628
mn by 2020.6
 Major Government initiatives such as ‘Digital India’, ‘Make in India’ and supportive policies including favourable FDI Policy
for electronics manufacturing have simplified the process of setting up manufacturing units in India.
 India is the second fastest digitizing economy amongst the 17 leading economies of the world. 7
 The domestic demand for electronic goods is rising. This coupled with rising disposable income levels provides a huge
market for electronic goods.
 There is a huge demand for electronic goods in the Middle-Eastern countries and in emerging markets such as North Africa
and Latin America. This provides an export market for ‘Made in India’ electronic goods.
STATISTICS
 The FDI inflows in electronics in India for 2018-19 were valued at US$ 451.9 mn8 compared to US$ 196.9 mn in 2017-18.9
 India currently has 560 mn internet subscribers and 354 mn smartphone devices (February 2019).10
 The Indian smartphone market has witnessed the fastest growth among major markets (such as China and US), growing by
10% in 2018.11
 India holds second place in the global handsets market (feature phones and smartphones) which is projected to grow to 302
mn handsets in 2019.12
 The mobile-gaming industry in India is one of the top five in the world and is already worth US$ 890 mn 13 (as of February
2017).
 The Internet of Things (IoT) market in India is expected to be worth US$ 15 bn by 2020, accounting for nearly 5% of the
global market.14
 Expected market size for major electronics sub-sectors in India by 2020:
o Telecom equipment - US$ 34 bn
o Laptops, desktops, tablets - US$ 34 bn
o LED - US$ 35 bn
o Consumer electronics - US$ 29 bn
o Set-top boxes - US$ 10 bn
o Automotive electronics - US$ 10 bn
Page 10 of 30
 o Medical electronics – US$ 8.5 bn
FDI POLICY
 100% Foreign Direct Investment (FDI) is allowed under the Automatic Route in the ESDM industry. 15
 For defence electronics, up to 100% FDI is allowed, subject to industrial license. Under the Automatic Route, up to 49% FDI
is allowed. Above 49% is allowed under the Government Route on a case to case basis, wherever it is expected to result in
access to modern and ’state-of-the-art’ technology in the country.16
 The Government allows 100% FDI in the medical devices via the Automatic Route. Investors are no longer required to take
the Foreign Investment Promotion Board’s permission to acquire an existing company or set up a new manufacturing unit in
the medical devices sector. The investor, however, will need to comply with the reporting requirements of the Reserve Bank
of India (RBI) and comply with all other relevant Central and State laws and regulations. 17
SECTOR POLICY
NATIONAL POLICY ON ELECTRONICS
The National Policy on Electronics (NPE) 2019 envisions to position India as a global hub for ESDM by encouraging and driving
capabilities in the Country for developing core components, including chipsets and by creating an enabling environment for the
industry to compete globally.
The NPE 2019 replaces the NPE 2012, which has successfully built the foundation for a competitive Indian ESDM value chain. The
NPE 2019 targets to promote domestic manufacturing and export in the entire value chain of ESDM and achieve a turnover of US$
400 bn by 2025.18
For more details on the NPE 2019, please refer to NPE 2019.
FINANCIAL SUPPORT
MODIFIED SPECIAL INCENTIVE PACKAGE SCHEME (M-SIPS)
THE M-SIP Scheme, launched in 2012, provides capital subsidy of 25% for electronics industry located outside of Special Economic
Zones (SEZs). Electronics industry located inside SEZs are provided 20% subsidy.19
Under M-SIPS, 419 investment proposals involving investment worth US$ 16.2 bn have been received till 31 December 2018. Out of
these, 197 applications with proposed investments of approximately US$ 6 bn have been approved, of which 134 have already
started commercial production. These units have reported total sales of US$ 10 bn, of which goods worth US$ 2.3 bn have been
exported. The revenue paid by these companies to the Government stands at around US$ 1.3 bn. 20 These companies are also
generating direct and indirect employment.
19 applications under M-SIPS with proposed investment of around US$ 2.1 bn have been recommended by the Appraisal Committee
for approval. 203 applications with proposed investment of around US$ 8 bn are still under appraisal. 21
ELECTRONICS DEVELOPMENT FUND (EDF)
This Scheme helps promote start-ups and innovation. The EDF is a fund of funds that invests in venture funds, which in turn invest in
innovation ventures/ start-ups in electronics, nano-electronics and IT. The EDF will be investing in 13 daughter funds. The total
targeted collection of these 13 daughter funds is US$ 994.1 mn, of which US$ 122.6 mn is being provided by the EDF. 22
ELECTRONICS MANUFACTURING CLUSTERS (EMC)
The Scheme, launched in 2012, encourages entities including State Government entities to provide good quality infrastructure within
a cluster.
Under the Scheme, 50% of the project cost for greenfield EMC and 75% for brownfield EMC is given as grant. As of February 2019, 20
greenfield and 3 brownfield EMC projects have been sanctioned with the project investment outlay of US$ 557.6 mn. Out of this, the
Government of India is providing US$ 225.6 mn as Grant-in-aid.
Electronic Manufacturing Clusters, spread over 1,442.7 ha. of land, are being developed. The likely investment by manufacturers for
the Project stands at US$ 7.8 bn.23
EXPORT INCENTIVES
Export incentives of 2-3% are available under the Merchandise Export from India Scheme (MEIS). Products such as air conditioning
parts and compressors, refrigerating equipment compressors, fully automatic washing machines, colour televisions, and set top
boxes for accessing files are included in the list of products that get export incentives.
STATE INCENTIVES
Apart from the incentives mentioned above, India offers additional incentives for industrial projects, while some states offer
separate incentives for the industry.
 ELECTRONICS POLICY FOR THE STATE OF GUJARAT (2016-21)
o The Government of Gujarat provides assistance of up to 25% of the project cost to greenfield EMCs, subject to a
ceiling of US$ 1.43 mn.
o The Government also offers a special incentive package for two anchor units (with investment of more than US$
14.3 mn) in each of the greenfield EMCs.
 ELECTRONICS, IT AND ITES INVESTMENT POLICY OF CHHATTISGARH
o Electronics, IT and ITES units are entitled to an interest subsidy up to 75% of the total interest paid annually up to
the period of 8 years with a maximum limit of US$ 158,746.5 per annum. The subsidy is on a reimbursement basis.
o Units established in the State shall be reimbursed 50% of the fixed capital investment, excluding the cost of the
land, with a maximum limit of US$ 216,473.6.
SUPPORT FOR INTERNATIONAL PATENT PROTECTION IN E&IT
To encourage filing of international patents, a scheme to Support International Patent Protection in Electronics & IT (SIP-EIT) has
been commissioned. The Scheme provides financial support to Small and Medium Enterprises (SMEs) and tech start-ups by
supporting international patent protection in electronics and IT.
Reimbursement is limited to a total of around US$ 21,650 per invention or 50% of the total expenses incurred in filing and processing
of patent application up to Grant, whichever is lesser. 24
KEY POINTS IN UNION BUDGET 2019-202
 Ministry of Electronics and Information Technology has been allocated US$ 918.3 mn.25
 Out of the 918.3 mn budget allocation, the revenue expenditure allocation is US$ 868.5 mn and capital expenditure budget
is US$ 49.8 mn.26
 The total budget allocation towards the Digital India Program is US$ 502.9 mn. 27
INVESTMENT OPPORTUNITIES
 Mobile phone manufacturing28
 Semi-conductor wafer fabrication manufacturing29
 Light Emitting Diode (LED) manufacturing30
 Wearable devices manufacturing31
 Solar cells and modules manufacturing32
 LED and Liquid Crystal Display (LCD) manufacturing33
 Research, innovation and skill development support in emerging technology areas such as Augmented Reality (AR), Virtual
Reality (VR), drones, robotics, additive manufacturing, etc 34
 Medical electronic devices manufacturing35
 Research and development of automotive electronics and power electronics for mobility 36
(10)FOOD PROCESSING
SUMMARY
 India offers the largest diversified production base and has a growing food industry. India is:
o World’s largest milk producing nation
o World’s largest producer, consumer and exporter of spices
o World’s second largest producer of food grains, fruits, and vegetables. 1
 The total geographical area of India is 328.7 mn ha and the Gross Cropped Area is 198.4 mn ha with a cropping intensity of
142% in 2014-15.2
 The reported Net Sown Area as recorded in 2014-15 is 140.1 mn ha.3
 As per the National Agricultural Research Project (NARP), India has been divided into 127 agro-climatic zones. Out of the
total 42 Mega Food Parks sanctioned, 17 Food Parks have been operationalized as on May 2019. 4
 Nivesh Bandhu is an investor facilitation portal to assist investors on the investment decisions. A special fund of US$ 285 mn
has been set up in National Bank for Agriculture and Rural Development (NABARD) for affordable credit.5
 Loans to food & agro-based processing units & cold chains have been classified under agriculture activities for Priority
Sector Lending (PSL).6
REASONS TO INVEST
 India ranks second in terms of availability of arable land with 127 diverse agro-climatic zones, having a share of 11.2% of the
total arable land in the world. In addition, the resource-rich country has the sixth largest food and grocery market and fifth
largest retail market globally. Thus, India can provide a perfect blend of traditional and hygienic food, processed and
packaged according to modern technology.
 The Food processing industry in India is indigenous because simple home-based techniques such as fermentation have
resulted in the creation of worldwide acknowledgment of Indian pickles, papads, chutneys and murabba.
 The Gross Cropped Area accounting for around 60.3% of the total geographical area stands at 198.4 mn ha, as per the land
use statistics (2014-15). In a similar period, the net sown period is 140.1 mn ha, with a cropping intensity of 141.6%.7
 The total area sown under Rabi crops in 2017-18 stands at 63.23 mn ha.8 The total area sown under Kharif crops in 2017-18
stands at 21.08 mn ha, whereas, the area under wheat and rice stands at 30.59 and 43.20 mn ha.9
 Benefiting from such a geographical advantage, India is the largest producer of milk, bananas, mangoes, guavas, papaya,
ginger, okra, second largest producer of wheat, rice, fruits, vegetables, tea, sugarcane and cashew nut and the third largest
producer of cereals, coconut, lettuce, chicory, nutmeg, mace, cardamom and pepper globally.
 India is also globally acknowledged as the leading producer of agriculturally allied products. India is the world's biggest milk
producer. Milk production in India in 2017-18 stood at 176.35 mn tonnes.10
 India makes for around 6.3% of the global fish production with a total fish production of 12.60 mn metric tonnes in 2017-18.
More than 50 different types of fish and shellfish products are being exported to 75 countries around the world. Fish and
fish products have presently emerged as the largest group in agricultural exports from India. 11
 The Horticulture sector has recorded a production of 306.82 mn tonnes in 2017-18, which is 2% higher than 2016-17.12
 India has a locational advantage from the viewpoint of trade, as it has close connectivity with Europe, Middle East & Africa
from the western coast, and Japan, Singapore, Thailand, Malaysia, Korea, Australia and New Zealand.
Page 11 of 30
  World Food India, a mega food event that took place in November 2017, brought together 75,000 business visitors, from 61
countries, 75 International & National policymakers and Heads of State, 60 Global CEOs and 100 Indian CEOs; resulting in
5,000 B2B meetings over a span of three days. It helped India showcase itself as a preferred investment destination, with
MoU’s worth US$ 13.56 bn signed by domestic & foreign investors. At present, Global industry players such as GEA Group,
Tetra Laval, Buhlar, Alfa Laval, Heat and Control and HRS process are reaping the benefits.
 Nivesh Bandhu, an investor-friendly portal launched recently brings together Central and State Government policies and
incentives provided for the food processing sector. It is a one-stop platform for all stakeholders of the industry, including
farmers, processors, traders, and logistics operators. To further help an investor make strategic decision, the portal also
includes a Food Map that can help investors take decision relating to the project location.
 An Investor tracking and facilitation desk has also been set up with a dual objective to identify new potential investors and
help the Ministry to organize trade shows both on domestic as well as the international front. Such an initiative will help
India to meet its investment needs.
 Private Sector participation has been on a continuous rise in many segments of the value chain. There exist huge
opportunities for investments in the fields of contract farming, raw material sourcing and creation of agri linkages. Many
international companies have gained a major foothold in contract farming initiatives.
 Under the scheme of Mega Food Parks, Government has sanctioned 42 parks, and out of these 17 have been made
operational so far.13 Additionally, under the scheme of Integrated Cold Chain and Value Addition Infrastructure, the Ministry
is presently assisting 228 such projects , and in 2017, 16 projects got operationalized, creating an additional capacity of 0.24
MMT of cold storage, 210.75 metric tonnes per hour of individual Quick Freezing (IQF)14, 3.45 mn litres per day of milk of
processing/ storage and 472 reefer vans during 2014 - 2017.
 Food Safety & Standards Authority of India (FSSAI), the apex regulatory body has taken wide steps aiming to simplify
product approval along with the creation of a single-interface portal, “The Food Regulatory Portal” for effective and
transparent implementation of the food safety laws in the country.
 Product-specific developments are also being undertaken, for example, setting up of a Common Food Processing Incubation
Centre for Shallots in Perambalur.
 Under the scheme of Modernization of Abattoirs, one project at Panaji (Goa) has been operationalized.
 During the year 2016, 10 Food Testing Labs were completed.
 Sector-specific Skill Development Initiatives are also being taken up, with National Institute of Food Technology,
Entrepreneurship and Management (NIFTEM) and Indian Institute of Food Processing Technology (IIFPT) being recognized
as Centres of Excellence.
 With such major developments, the market for plant and machinery in the Food Processing industry in the year 2024-25 is
poised to stand at US$ 51.41 bn. High growth food segments within the Food & Beverage Industry are Breakfast Cereals,
Savory Snacks, Ingredients such as seasonings and dressings and pet food.
 Apart from growing population and burgeoning purchasing power, rising urbanization, rising retail trade due to initiatives
such as Digital India, together with the presence of global players of the industry can be considered as the major growth
drivers for the segment. India has a population base of 1.3 bn offering a large demand-driven market, with the retail sector
expected to treble by 2020. Hence, the total consumption of the food and beverage segment domestically is expected to
reach US$1.142 tn by 2025.
STATISTICS
 The Food Processing Industry in India has emerged as one of the important segment in terms of its contribution to the
Indian economy, as it contributes 9% and 11% of GDP in Manufacturing and Agriculture sector respectively.
 Gross Value Added of the Food processing industry in India has been recorded as US$17.50 bn in 2016-17.15
 The number of registered food processing units has increased from 38,608 in 2014-15 to 39,748 in 2016-17.16
 Investment in Fixed Capital in registered food processing sector has grown from US$29.50 bn in 2015-16 to US$32.30 bn in
2016-17, witnessing a growth rate of 9.50%.17
 The Food Processing Industry in India stands as one of the major employment intensive industry, constituting 12.77% of
employment generated in all manufacturing factories registered under the Factories Act 1948. Additionally, the sector
constitutes 13.72% of employment in the unregistered manufacturing sector.
 The Food Processing Industry in India contributed approx. US$3.92 bn to India’s exports in the year 2017-18.18
FDI POLICY
 100% FDI is permitted under the automatic route in the Food and Processing industry in India.
 100% FDI is allowed through government approval route for trading, including through e-commerce in respect of food
products manufactured or produced in India.
SECTOR POLICY
 Food processing is recognized as a priority sector in the new manufacturing policy in 2011.
 Food processing units can avail preferential rates under Priority Sector Lending. 19 It will ensure a greater flow of credit to
entrepreneurs for setting up food processing units and attract investment in the industry.
 Government has set up a special fund called "Food Processing Fund" of approximately US$285 mn 20 in National Bank for
Agriculture and Rural Development (NABARD) for extending affordable credit to designated food parks and the individual
food processing units in the designated food parks.
 A Dairy Processing & Infrastructure Development Fund (DIDF) has been set up with an outlay of US$1.15 bn during the
period from 2017-18 to 2019-20.21 This investment is expected to benefit 95,00,000 farmers in about 50,000 villages.
 Ministry of Food Processing Industries is also keen on developing an integrated and comprehensive National Food
Processing Policy, for which a draft has already been circulated among the stakeholders to receive suggestions and
recommendations. It aims to build India’s National Food Grid and National Cold Chain Grid apart from the retail markets at
every nook and corner of the country.
 Ministry of Food Processing Industries (MoFPI) provides a host of financial assistance to food processing companies in India,
under the umbrella scheme of Pradhan Mantri Kisan Sampada Yojna (PMKSY), with an allocated amount of US$ 882 mn,
that is expected to leverage investment US$ 4.6 bn, in addition to the creation of employment for 5,30,500 22 people by
2019-20. Under this, the emphasis has been paid to the creation of infrastructure facilities, such as Mega Food Parks and
Cold Chains.
FINANCIAL SUPPORT
 Under the scheme of Mega Food Parks, MoFPI provides assistance of 50 % of the project cost (excluding land), subject to a
maximum of US$ 7.4 mn, for setting up the project. In addition, to develop small clusters, a subsidy of 35% of the eligible
cost, or US$ 1.5 mn (whichever is less), is also being provided to agro-processing clusters.
 To catalyze the creation of integrated cold chains and preservation infrastructure facilities, an assistance of 50% of the
project cost (excluding land), up to a limit of US$ 1.5 mn is being made available for such projects. For creation/expansion of
food processing/preservation capacities, an assistance of 35% of the eligible project cost is being provided with a ceiling of
US$ 0.75 mn.
 To ensure best-in-class food quality and safety, MoFPI provides grant-in-aid of 50% of laboratory cost, 25% of technical civil
works cost to house the equipment and furniture and fixtures associated with the equipment without ceiling which is
decided on a case to case basis.
INCOME TAX:
 Businesses involved in Processing, preservation and packaging of fruits and vegetables, or integrated business of handling,
storage and transportation of food grains( starting operations from 1 April 2001) and in Processing, preservation and
packaging of meat, meat products, poultry, marine or dairy products (staring operations from 1 April 2009), are eligible for
Profit Linked Tax Holiday under Section 80-IB of the Income Tax Act 1961, as per follows:
o For the first five years, 100% of profits and gains derived will not be taxable.
o For the next five years, there would be a tax deduction of 25% (and 30% in the case of a company).
 Under Section 35-AD of the Income-tax Act, 1961, investment-linked deductions of 150% will be provided for the following
businesses:
o Setting-up and operating a cold chain facility
o Setting-up and operating warehousing facility for storage of agricultural produce
o Setting-up and operating a warehousing facility for storage of sugar
o Bee-keeping and production of honey and beeswax
o Production of fertilizers in India
 Additionally, units that have been set up in an SEZ prior to 1 April 2021, engaged in the manufacture or production of any
article or thing. These are in turn eligible for the following deductions for profits and gains derived:
o For the first five years, 100% deduction of profits derived from exports
o For the next five years, 50% of profits and gains derived from exports.
o And for another five years, 50% of profits derived are subject to deduction amount being debited to a “Special
Economic Zone Re-Investment Account” and used for certain specified purposes (such as the purchase of plant and
machinery).
GST:
 Ministry of Food Processing Industries has streamlined the rates for products under the GST regime, at specified rates of 0%
(Nil), 5%, 12%, 18% and 28%.
PROJECT IMPORT SCHEME:
 Under the Project Imports Scheme, industrial plants, irrigation projects and power projects are eligible for concessional
customs duty. Detailed mention of the concessional duty is:
o The basic customs duty rate for goods imported under the Project Imports Scheme is 5%. And, for certain specified
projects such as a specified drinking water supply project, the basic customs duty rate is 0%.
o After the introduction of GST, goods that were initially subject to countervailing duty, are liable to an IGST at 18 %.
KEY POINTS IN THE UNION BUDGET 2019-20:
 Budget Allocation to the Ministry of Food Processing doubled to reach to US$ 170.85 mn, with the objective of doubling the
income of farmers by 2022.23
 To curtail price volatility of basic perishable commodities like Tomato, Onion and Potato (TOP), an initiative named,
“Operation Greens” has been earmarked with a corpus of US$ 76.92 mn.
Page 12 of 30
  Another revolutionary initiative includes the establishment of Specialized Agro Processing Financial Institutions to deal with
the installation of capital intensive projects to ensure affordable, timely and accessible credit to the sector.
 Other development initiatives include:
o Promotion of cluster-based development of agriculture commodities.
o 100% income tax deduction to Food Processing Organizations (FPO’s) having an annual turnover of US$ 15.38 mn
derived from post-harvest value addition activities.
o To strengthen quality benchmarks, there will be setting up of state of art testing facilities in all 42 Mega Food Parks.
INVESTMENT OPPORTUNITIES
INVESTIBLE PROJECTS:
 Fruits and vegetables: preserved, candied, glazed and crystallized fruits and vegetables, juices, jams, jellies, purees, soups,
powders, dehydrated vegetables, flakes, shreds and ready-to-eat curries.
 Food preservation by fermentation: wine, beer, vinegar, yeast preparation, alcoholic beverages. Beverages: fruit-based,
cereal-based.
 Dairy: liquid milk, curd, flavored yogurt, processed cheese, cottage cheese, Swiss cheese, blue cheese, ice cream, milk-based
sweets.
 Food additives and nutraceuticals.
 Confectionery and bakery: cookies and crackers, biscuits, bread, cakes and frozen dough.
 Meat and poultry: eggs, egg powder, cut meats, sausages and other value-added products. Fish, seafood and fish processing
– processing and freezing units.
 Grain processing – oil milling sector, rice, pulse milling and flour milling sectors.
 Food preservation and packaging: metal cans, aseptic packs.
 Food processing equipment: canning, dairy and food processing, specialty processing, packaging, frozen food/refrigeration
and thermo-processing.
 Consumer food: packaged food, aerated soft drinks and packaged drinking water. Spice pastes.
 Supply chain infrastructure – this niche has investment potential in food processing infrastructure, the government’s focus
is on supply chain related infrastructures like cold storage, abattoirs and food parks.
 The establishment of food parks – a unique opportunity for entrepreneurs, including foreign investors to enter in the Food
Processing industry in India.
KEY ACHIEVEMENTS
 296 Approved Cold Chain Projects as on May 201924
 4 Abattoirs projects completed
 Creation of labs: 222 labs accredited by National Accreditation Board for quality testing of food25
 A dedicated Investors' Portal and Mobile APP called 'Nivesh Bandhu' launched by the Prime Minister during the inaugural
function of the World Food India 2017
 MoUs signed during 'World Food India 2017' in November 2017 - signed between the Government of India and the United
Nations' World Food Programme for cooperation during 2019 - 202326
(11)IT AND BPM
SUMMARY
 Global Technology spending stood at US$ 3.65 tn during 2018-19.1
 The IT-BPM industry in India accounts for 55% of the total global outsourcing market. In India, it accounts for more than
45% share, which is the largest, in total services export.
 The IT-BPM industry in India constitutes ~ 7.9% of India's GDP. The industry is the largest private sector employer –
employing around 4 mn people.2
 There are 640 offshore development centres in more than 80 countries.
 Indian IT & BPM industry is expected to grow to US$ 310 bn by 2020.3
REASONS TO INVEST
 As of 2018-19, the expenditure on global Technology stood at US$ 3.65 tn.
 India in 2018-19 witnessed 1,70,000 net new hires in the industry - a total of 6,00,000 digitally skilled human resources, and
a 20-25% increase in learning and development budget of IT-BPM companies.4
 India’s IT-BPM industry amounts for 55% of the global outsourcing market size.
 Favourable government policies and incentives facilitate investments in IT industry.
 There is a presence of skilled manpower, as India is home to 4 mn IT-BPM professionals.5
 Rapidly growing urban infrastructure has fostered several IT centres in the country.
 India ranked 77th in the World Bank’s Doing Business 2019 report. 6
STATISTICS
 The IT-BPM industry revenues (excluding hardware) is estimated to be US$ 181 bn for 2018-19. For 2018-19, export
revenues of the Indian IT-BPM industry are estimated to be US$ 137 bn.7
 The industry has more than 17,000 firms; 8 of which 1000+ are large firms with over 50 delivery locations in India.
 The IT-BPM industry is the largest private sector employer – delivering around 4 mn jobs. The industry accounts for more
than 45% share in total services export from India.8
 India is the 2nd largest9 start-up ecosystem in the world with 18,000+ start-ups recognized by the government till May
2019.10
GROWTH DRIVERS
 Emerging geographies and verticals, non-linear growth due to platforms, products and automation.
 Revival in demand for IT services from the US and Europe.
 Increasing adoption of technology and telecom by consumers and focused government initiatives – leading to increased
information and communication technology adoption.
 Use of IT in emerging verticals (retail, healthcare, utilities) are driving growth in the Indian IT industry.
 India is creating a future-ready digital workforce, with more than 6,00,000 digitally skilled human resources. India’s IT-BPM
firms witnessed a 20-25% increase in Learning & Development budget in 2018-19.11
 About US$ 1.6 bn is spent annually on training workforce and growing R&D expenditure.
 Bharat Net project aims to connect at least 5 Wi-Fi access points in all 2,50,000 gram-panchayats (village councils) in the
country.12
 The government's Digital India Campaign envisages a US$ 20 bn investment covering mobile connectivity throughout the
country, re-engineering of government process via technology and enabling e-delivery of citizen services.
FINANCIAL SUPPORT
PROVISIONS OF UNION BUDGET - 2018-19 AND 2019-20
 Allocation of Digital India doubled to US$ 472 mn in 2018-19.13
 Interim Budget 2019-20 announced that 1,00,000 villages to be made Digital Villages by 2023-24.14
NATIONAL POLICY ON SOFTWARE PRODUCTS (2019)
 A dedicated Software Product Development Fund (SPDF) with a corpus of US$ 145.65 mn will be created in the form of Fund
of Funds.15
SOFTWARE TECHNOLOGY PARK SCHEME
 Custom duty exemption
 Excise duty exemption
 Central Sales Tax reimbursement
 Corporate tax exemption on 90% export turnover
 Sales in Domestic Tariff Area (DTA) up to 50% of the Freight On Board (FOB) value of exports permissible. 16
INVESTMENT OPPORTUNITIES
 The setting up of IT services, BPM, software product companies, shared service centres.
 Fast-growing sectors within the BPM domain – knowledge services, data analytics, legal services, Business Process as a
Service (BPaaS), cloud-based services.
 IT Services and fast-growing sectors within it such as solutions and services around SMAC (Social, Mobile, Analytics, Cloud),
IT consulting, software testing.
 Engineering and R&D within which the fastest growing sectors are – telecom and semiconductors.
(12)LEATHER
SUMMARY
 The Leather industry in India holds a significant place in the Indian economy.
 The Leather industry in India is consistent in its high export earnings and is among the top 10 foreign exchange earners for
India.1
 The Leather industry in India stands at US$ 17.85 bn (Exports – US$ 5.85 bn, Domestic Market – US$ 12 bn). The exports
from April-Jan 2018-19 are recorded as US$ 4750.62 mn.2
 Export of different categories of Footwear (leather & non-leather and components) holds a major share of about 50.34%.3
 The Leather industry in India is an employment-focused industry, providing jobs to about 4.42 mn people. 4
 India is the 2nd largest producer of footwear, 2nd largest exporter of Leather Garments, the 5th largest exporter of Leather
Goods and 3rd Largest Exporter of Saddlery and Harness items. 5
REASONS TO INVEST
 Opportunity to set-up export units: Exports are projected to reach US$ 9.0 bn by 2020, from the present level of US$ 5.85
bn. India has trade agreements with Japan, Korea, ASEAN, Chile etc., and is negotiating Free Trade Agreement with the
European Union, Australia etc.
 Opportunity to tap the huge domestic market in India: The domestic market is expected to reach US$ 18 bn by 2020.
 Comparative advantages exist in production cost and labour costs as compared to other major manufacturing countries.
 Skilled/trained manpower is available for a new production unit or existing production unit.
STATISTICS
 Strong Raw Material Base
Page 13 of 30
 1. India is endowed with 21% 6 of the world’s cattle and buffalo and 11% of the world’s goat and sheep population.
2. India produces 3 bn sq. feet of leather on an annual basis.7
 The Leather industry in India comprises of major segments namely footwear, finished leather, leather goods, leather
garments, footwear components, saddlery and harness. All these segments have high growth potential.
 Per capita consumption of footwear in India projected to increase up to 4 pairs and total domestic consumption is expected
to reach up to 5 bn pairs by 2020.
 Great opportunity to set-up manufacturing facility of footwear components, considering increasing demand for fashion
footwear in India.
GROWTH DRIVERS
 High growth potential for exports
 The ready availability of leather
 The abundance of essential raw materials
 Rapid strides in the areas of capacity modernisation and expansion
 Skill development and environment management
 Favourable government policies
 Additional steps have been taken to increase the export of leather and leather products:
1. About 2% across the board enhancement of duty credit scrip under Merchandise Exports from India Scheme (MEIS)
for shipments made from 1 November 2017
2. GST concessions for leather industry items –
 Finished leather from 12% to 5%,
 Certain leather chemicals, leather goods, leather garments and saddlery items from 28% to 18%,
 Common Effluent Treatment Plants (CETPs) from 18% to 12%,
 Job work from 18% to 5% Footwear from 18% to 5% 8
FDI POLICY
 Leather products manufacturing is allowed 100% FDI through automatic route.
 Government of India has allowed 100% FDI in single-brand retailing in India, with a clause of 30% mandatory local
sourcing.9
 The Leather industry in India is de-licensed, facilitating expansion on modern lines with state-of-the-art machinery and
equipment.
FINANCIAL SUPPORT
 Under the Leather Technology, innovative and environmental issues sub-scheme of Indian Leather Development
Programme (ILDP), the following assistance is provided:
o Up to 50% of the project cost with a ceiling of US$ 7.69 mn for upgradation /installation of Common Effluent
Treatment Plants (CETPs)
o Addressing the environmental pollution caused by leather units
o Solid waste management through environmental workshops 10
 Integrated Development of Leather Sector (IDLS) sub-scheme of ILDP, 30% grant is provided on the cost of plant and
machinery for Micro and Small units and 20% for other units, with a ceiling of US$ 0.30 mn for each product line.
 Mega Leather Cluster (MLC) sub-scheme of ILDP, 50% grant with a ceiling of US$ 19.23 mn based on size is provided. This is
mainly for the establishment of Mega Leather Clusters to boost infrastructure facility and support services for production
and export.
 Human Resource Development (HRD) sub-scheme: An assistance for Placement Linked Skill Development training to
unemployed persons is provided –US$ 230 per person, for skill up-gradation training to employed workers - US$ 76 per
employee and for the training of trainers –US$ 3,076 per person.
 The Footwear Design and Development Institute (FDDI) has established itself as the premier training institute for the
provision of skilled manpower in the Leather industry. It has 55 training centres across India including 8 branches. Another 4
branches are being set up.11 About 25,643 persons have been trained under the primary skill development training
programme during 2018-19. 12
 Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme: MLFAC provides infrastructure support to the
leather, footwear and accessories industry. Graded assistance is provided up to 50% of the eligible project cost, excluding
the cost of land with Government assistance being limited to US$ 19 mn.
 Leather Technology, Innovation and Environmental sub-scheme: The help is provided for upgradation/installation of
Common Effluent Treatment Plants (CETPs) @ 70% of the project cost. The sub-scheme also offers support to national level
industry council/ association and support for the preparation of vision document for Leather Footwear and Accessories
Industry.
 Promotion of Indian Brands in Leather, Footwear and Accessories sub-scheme: Eligible units are approved for Brand
Promotion. Government assistance is limited to 50% of the total project cost subject to a limit of US$ 461,538 for each
brand, annually for 3 years.
 Additional Employment Incentive for Leather, Footwear and Accessories Industry scheme: Employers contribute 3.67% to
employees provident fund for all working in the leather, footwear and accessories industry. The employees are enrolled in
the Employees' Provident Fund Organization (EPFO) for the 1st 3 years of their employment.
INVESTMENT OPPORTUNITIES
 As per the Doing Business 2019, World Bank, India is ranked 77. Many initiatives under the National Trade Facilitation Action
Plan (2017-2020) have upgraded the productivity of cross-border trade, reducing border and documentary compliance time
for both exports and imports.13
 The National Manufacturing Policy identifies leather as a special focus industry, for growth and employment generation.
The policy aims at a GDP of 25% along with the creation of 100 mn jobs in all industries by the year 2025. 14
 Presence of huge production centres in the form of Mega Leather Clusters (MLC) with all required infrastructure, where
investors can set-up one of these MLCs.
 As on 2018, setting up of Mega Leather Footwear and Accessories Cluster (MLFAC) at Kota Mandal, Nellore District of
Andhra Pradesh have been approved. In addition to this, in-principle approval has been accorded for setting up of MLFAC at
Bantala, Kolkata, West Bengal. 15
LOCATION OF THE MLC
Project Approved
 Kothapatnam Village, Kota Mandal, Andhra Pradesh (Area: 537 acres) Project under consideration
 IMT Rajkot, Mewat, Haryana (Area: 105 acres)
 Sandila Industrial Area in Hardoi district & Ramaipur in Kanpur district. (Area: 150 acres) 16
FOREIGN INVESTORS
 Apache Group (Taiwan), Nellore, Andhra Pradesh
 Feng Tay Shoes (Taiwan), Cheyyar, Tamil Nadu
 Itares (Italy), Ambur, Tamil Nadu
AGENCIES
 Council for Leather Exports (CLE)
 Central Leather Research Institute (CLRI)
 Footwear Design and Development Institute (FDDI)
 National Institute of Fashion Technology (NIFT)
 Central Footwear Training Institute (CFTI)
KEY ACHIEVEMENTS
 Indian Footwear, Leather & Accessories Development Programme (IFLADP), a special package for employment generation in
the Leather and footwear industry has been launched in December 2017. The approved expenditure for this is US$ 371 mn
from 2017-18 to 2019-20. Under the programme, 4 projects have been approved with a total outlay of US$ 15 mn. This is to
facilitate upgradation of infrastructure, job creation and environmental sustainability in Tamil Nadu. 17
 In-principal approval for the mega leather cluster in West Bengal with employment potential for around 7000 people and an
investment of up to US$ 64 mn. Under the scheme, a total of 9 projects for Common Effluent Treatment Plant upgradation,
with a gross value of US$ 67 mn and government assistance of US$ 46 mn have already been approved and are under
implementation.
 During 2017-18, primary skill development training has been provided to 94,231 unemployed persons in the Leather &
footwear industry and of them, 71,125 trainees have been provided placement. 18
(13)MEDIA AND ENTERT AINMENT
SUMMARY
 The Media & Entertainment (M&E) industry revenues, at a global platform, are expected to rise from US$ 1.8 tn in 2016 to
$2.2 trillion in 2021.1
 M&E industry in India reached US$ 23.9 bn by 2017. The industry witnessed a double-digit growth of around 13% in 2016
and 13.4% in 2017. With its current trajectory, the M&E industry is expected to grow to US$ 33.6 bn by 2021. India has more
than 850 TV channels.2
 The Indian film industry grew by 12.2% during 2017-18, with an industry size of US$ 2.5 bn.3
 India is the 2nd largest television market in the world.4
REASONS TO INVEST
 The M&E industry is expected to register a CAGR of 12% during 2018-21, to reach US$ 33.6 bn market size in 2021.
Television is expected to retain position as the largest segment, whereas, digital is expected to overtake filmed
entertainment in 2019 and print by 2021. The number of television households reached 197 mn in 2018, increasing the Pay-
TV penetration to 66%.5
Page 14 of 30
  India has a large broadcasting and distribution sector, comprising approximately more than 800 satellite TV channels. The
distribution network consists of 6,000 multi-system operators, around 60,000 local cable operators, 7 DTH operators and
many IPTV service providers.6
 India had a total of 118,239 registered publications in March 2018, consisting of 17,573 in the news category and 100,666 in
periodicals.7
 The 5G spectrum band is expected to be finalised in 2019 and launched in 2020-21.
STATISTICS
 Largest industries by market size, within the M&E industry in 2018, include
o Television (US$ 10.6 bn)
o Print (US$4.4 bn)
o Filmed entertainment (US$ 2.5 bn)
o Digital media (US$ 2.4 bn).
 India has 197 mn television households, 17,500 newspapers, close to 3,000 screens in multiplexes. It also has around 570
mn internet users which is the second largest base after China and is growing at a rate of 13% annually. Multiplexes have
been adding around 200-250 screens annually.
 With the online population expected to reach 840 mn by 2022, online gaming and digital media are projected to have the
highest CAGR of 35.4% and 28% respectively.
 Overall, the industry is expected to register a CAGR of 12% to reach US$33.6 bn by 2021. 8
GROWTH DRIVERS
 Television and AGV (Animation, Gaming and VFX) segments are expected to lead the industry growth, with opportunities in
digital technologies as well.
 TV penetration in India is about 66% and the market size was estimated at US$ 13.66 bn in 2017. The digital cable (44%),
paid DTH (31%) and free DTH (13%) are growing rapidly, driven by content innovation and product offerings. 9
 Growth in the number and spread of multiplexes.
 Increasing liberalization through FDI and tariff relaxation.
 Measures such as digitization of cable distribution to enable the viewer’s choice and higher growth.
 Rising incomes and evolving lifestyles, leading to higher demand for aspirational products and services.
 Higher penetration and a rapidly-growing young population, coupled with increased usage of 4G and portable devices, to
augment demand.
FDI POLICY
BROADCASTING CARRIAGE SERVICES
 FDI in teleports, DTH, cable networks, Multi-System Operators (MSOs), mobile TV, headend-in-the-sky broadcasting services
are allowed up to 100% under the Automatic route. Condition: Infusion of fresh foreign investment, beyond 49% in a
company not seeking license/ permission from sectoral Ministry, will require Government approval. For this, the infusion
must result in the change in the ownership pattern or transfer of stake by existing investor to a new foreign investor.
BROADCASTING CONTENT SERVICES
 FDI in FM radio is allowed up to 49% under the Government route.
 FDI in up-linking of ‘News and Current Affairs’ TV channels, is allowed up to 49% under the Government route.
 FDI in up-linking of ‘Non-News and Current Affairs’ TV channels/ down-linking of TV channels, is allowed up to 100% under
the Automatic route.
PRINT MEDIA
 26% FDI under the Government route is allowed in the publishing of newspapers and periodicals dealing with news and
current affairs.
 26% FDI under the Government route is allowed in the publication of Indian editions of foreign magazines dealing with news
and current affairs.
 100% FDI under the Government route is allowed in publishing/ printing of scientific and technical magazines/specialty
journals/ periodicals.
 100% FDI under the Government route is allowed in the publication of facsimile editions of foreign newspapers. 10
Disclaimer: Investments are subject to fulfilling security conditions, rules and regulations of the Ministry of Information and
Broadcasting and all other relevant legalities
SECTOR POLICY
 In December 2011, the Government of India passed ‘The Cable Television Networks (Regulation) Amendment Act’ for the
digitization of cable television networks by 2014.
 Cable operators under the digitization regime, are legally bound to transmit only digital signals, while customers can access
subscribed channels through a set-top box.
 The Government announced 90% subsidy for the North Eastern States and 75% subsidy for other states in setting up of
community radio stations.11
 National Digital Communications Policy (2018) has the following objectives to achieve by 2022:
o Broadband for all
o Creating 4 mn additional jobs in the Digital communications industry
o Enhancing the contribution of the Digital Communications industry to 8% of India’s GDP from 6% in 2017
o Propelling India to be the top 50 nations in the ICT Development Index of International Telecommunication Union
(ITU) from 134 in 2017
o Enhancing India’s contribution to global value chains
o Ensuring digital sovereignty12
 Co-production treaties with various countries such as Italy, Brazil, the UK and Germany are to increase the export potential
of the film industry.
FINANCIAL SUPPORT
PROVISIONS OF THE 2018-19 UNION BUDGET
 Allocation for Digital India scheme was doubled to US$ 439.5 mn. US$ 1.43 bn was assigned for the creation and
augmentation of communication infrastructure.
 Bharatnet Project aims to connect 100,000 gram-panchayats (village councils) with high-speed broadband connectivity.
 Department of Telecom to support the establishment of an indigenous 5G Test Bed at IIT Madras, Chennai.13
STATE INCENTIVES
 Available with different states depending upon the investment, number of jobs created, area of investment, etc.
OTHER INCENTIVES
 Ministry of Information & Broadcasting, Government of India, announced 90% subsidy for the North Eastern States and 75%
subsidy for other States in setting up of community radio stations. 14
INVESTMENT OPPORTUNITIES
TELEVISION
 The Television industry is estimated to hold 40% of the M&E industry by 2021.
 Television advertisement revenue grew 14% in 2018 to reach US$ 4.4 bn.
PRINT
 The Print industry has grown from US$ 2.88 bn in 2014 to reach US$ 4.53 bn in 2019 at a CAGR of around 9.5%.
 Newspapers and niche magazines are likely to drive industry growth Advertising revenues were US$ 3.1 bn in 2018.
 Accelerated growth is forecast in regional print and local news segments.
FILMS
 The size of the Indian film industry is expected to reach US$ 3.37 bn by 2021, up from US$ 2.23 bn in 2017.
 The industry is expected to grow with a CAGR of 10.6% for the 2018-21 period.
 An increasing number of digital screens and 3D films are expected to help industry growth.
 To promote joint productions, co-production agreements have been signed with Italy, Germany, Brazil, UK, France, New
Zealand, Poland, Spain, Canada, China and Korea. Agreement with Australia is in the pipeline.
 To promote India as a destination for foreign production houses, the Government has set up a single window system for
obtaining approvals and permissions from various Government Authorities.
RADIO
 The size of the Radio industry in India is estimated to reach US$ 557 mn in 2021, up from US$ 414 mn in 2017.
 The Radio industry is expected to grow at a CAGR of 8% over the period 2018-21.
 Phase-III of e-auctions for FM radio licenses will provide an impetus to the segment.
DIGITAL MEDIA
 The size of the Digital Media industry in India is estimated to reach US$ 5.06 bn by 2021, up from US$1.7 bn in 2017.
 The industry is expected to grow at a CAGR of 28% over the period 2018-21.
ONLINE GAMING
 The size of the Online Gaming industry in India is estimated to reach US $1.71 bn in 2021, up from US$ 429 mn in 2017.
 The industry is expected to grow at a CAGR of 35.4% during 2018-21.
ANIMATION & VFX
 The size of the Animation and VFX industry in India is estimated to reach US$ 1.83 bn by 2021, up from US$ 958 mn in 2017.
 The industry is expected to grow at a CAGR of 17.4% during 2018-21.
 The growth in international animation films, especially 3D productions and the subsequent impetus for Indian production
houses will further help growth in this segment.15
KEY ACHIEVEMENTS
 FDI grew 1.8 times in Information & Broadcasting - from US$ 1.9 bn during 2010-14 to US$ 3.4 bn in 2014-18.
 FDI inflow from April 2000 till March 2019 amounted to US$8.38 bn.16
 Print Media Advertisement Policy 2016, to promote transparency and accountability in the release of advertisements by
Directorate of Advertising & Visual Publicity (DAVP)
 Guidelines for empanelment procedure by DAVP to ensure fairness among various categories of Newspapers/ Journals.
 National Film Heritage Mission (NFHM) launched with US$ 89 mn allotments for implementing single window clearances
for film shootings for foreign filmmakers in India.17
 Film and Television Institute approved in Arunachal Pradesh.
Page 15 of 30
 6. Madhya Pradesh – 17.34%
(14)MINING 7. Maharashtra – 2.07%
SUMMARY 8. Jammu and Kashmir – 1.35%
 The Mining industry in India is one of the core industries of the economy. It provides basic raw materials to many important  The value of metallic minerals increased by 19.03% in 2016-17.14
industries.  The private sector has grown into a major contributor to mineral production. During 2016-17, (excluding atomic, fuel, and
 The Mining industry is characterized by a large number of small operational mines. 1 minor minerals), the private sector accounted for 66.84% of mineral production by volume and US$ 4.5 bn by value.15
 India is endowed with huge resources of many metallic and non-metallic minerals.2 India produces 95 minerals, which  There has been a notable turn around ever since the government has taken initiative for policy reforms.
includes 4 fuels, 10 metallic, 23 non-metallic, 3 atomic and 55 minor minerals (including building and other materials). 3  Minerals like manganese, lead, copper, alumina are expected to witness double-digit growth in the years ahead. There is
 The number of mines with reported mineral production (excluding atomic, fuel and minor minerals) in India stood at 1531 in significant scope for new mining capacities in iron ore, bauxite, and coal.
2017-18 as compared to 1508 in 2016-17.4  India has an advantage in the cost of production and in conversion costs of steel and alumina.
 Based on the geological mapping of the country, an area of 571,000 sq. km, out of a total of 3.1 mn sq. km. has been FDI POLICY
demarcated as Obvious Geological Potential (OGP) area, where the geological potential for the occurrence of mineral FDI up to 100% under the automatic route is allowed in:
deposits is higher.5 1. Mining and exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding
REASONS TO INVEST titanium bearing minerals and its ores; subject to the Mines and Minerals (Development & Regulation) Act, 1957.
 Mineral concessions (Mining Lease & Prospecting Licence cum Mining Lease) grant to be granted through auctions for the 2. Coal and Lignite mining for captive consumption by power projects, iron and steel cement units and other eligible activities
companies interested in mining or for the raw material for their downstream industry. permitted under and subject to the provisions of Coal Mines Nationalization Act, 1973.
 An Inter-Ministerial Group facilitator constituted for expediting the clearances and approvals process. 3. Setting up coal processing plans like washeries subject to the condition that the company shall not do coal mining and shall
 Exploration companies can venture into the revenue share model, being formulated for the exploration of blocks identified not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized
by the Geological Survey of India. This has been enabled by the National Mineral Exploration policy, 2016 announced in July coal to those parties who are supplying raw coal to coal processing plans for washing or sizing.
2016. Around 100 blocks have already been identified by GSI for auction. FDI up to 100% under the Government route is allowed in:
 India has vast mineral potential with mining leases granted for longer and stable tenure of 50 years. 1. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities.
 The demand for various metals and minerals will grow substantially over the next 15 years. 2. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities subject to
 India’s strategic location enables convenient exports. industry regulations and the Mines and Minerals (Development and Regulation Act 1957).
STATISTICS SECTOR POLICY
 The GVA accrued from the mining and quarrying industry at 2011-12 prices for the first quarter of 2017-18 is estimated to  The Government has amended the Mines and Minerals Development and Regulation Act 1957 (MMDR Act). The
be US$ 12.3 bn.6 amendment removed discretion by instituting auction to be the sole method of grant of major mineral concessions and,
 The mining and quarrying industry’s contribution (at current prices) to GVA accounted for about 2.3% for the first quarter of thereby bringing in greater transparency. It also provided the much-needed impetus to the mining industry by deemed
the year 2017.18.7 extension of mining leases. The Salient features of the recent amendments are:
 Up till December 2017, 33 mineral blocks have been successfully auctioned, having a total value of estimated resource of o Mineral Concessions Grant Through Auctions to bring transparency and remove discretion.
US$ 24.2 bn.8 o District Mineral Foundation (DMF) to address the grievances of the people affected by mining and in turn improve
 The estimate for the total value of mineral production (excluding atomic and fuel minerals) during 2017-18 has been pegged the image of the mining industry.
at US$ 16.2 bn9, which depicts an increase of 13% over that of the previous year. o National Mineral Exploration Trust (NMET) for incentivizing regional and detailed exploration to fill the gaps in
exploration in the country.
 India has 1531 mines, which are distributed across the country as follows10
o Mining Leases for 50 years and even the existing leases deemed extended eliminating any renewals for security of
1. Tamil Nadu – 230
tenure.
2. Madhya Pradesh – 197
o Stronger penal provisions have been put in place to check illegal mining. A penalty of up to (approximately) US$
3. Gujarat – 191
7200 per hectare of the area and jail term of up to 5 years is the probable punishment for illegal mining. 16
4. Karnataka – 142
5. Odisha – 132  National Mineral Exploration Policy 2016 announced in July 2016. Around 100 blocks have been identified by Geological
6. Andhra Pradesh – 129 Survey of India for auctioning on revenue sharing mechanism for regional exploration to encourage private participation in
7. Chhattisgarh – 112 exploration. The bidders would be protected by way of entitlement for a normative cost in the event unsuccessful outcome
8. Goa – 87 after exploration. The mechanism is being formulated in consultation with the stakeholders.
9. Rajasthan – 85 FINANCIAL SUPPORT
10. Maharashtra – 75 KEY HIGHLIGHTS OF UNION BUDGET 2019-20
11. Jharkhand – 58  Budgetary allocation towards the Ministry of Mines stands at US$ 214.3 mn.17
These 10 states account for 94% of the total number of mines in the country.  The budget allocation towards the Indian Bureau of Mines stands at US$ 12.2 mn. 18
 Among 175 Mineral Resource Assessment Projects, 29 are on ferrous minerals (iron, manganese and chromite), 42 precious  The budget allocation towards the Geological Survey of India stands at US$ 81.1 mn. 19
metals and mineral, 72 for non-ferrous and strategic minerals, 32 on industrial and fertilizer minerals.11 INVESTMENT OPPORTUNITIES
GROWTH DRIVERS POST AUCTION MINING CLEARANCES AND APPROVALS FACILITATOR
 The rise in infrastructure development and automotive production is driving the growth of the metals and mining industry Mineral blocks of non-minor minerals are being put up for auctions by the States for Mining or Prospecting cum Mining, depending
in India.12 on their level of exploration. The grant process is to be completely transparent through competitive bidding on an e-auction portal.
 The growth in the mining industry in terms of production of minerals has significantly improved in comparison to recent An Inter-Ministerial Group, Post Auction Mining Clearances and Approvals Facilitator (PAMCAF) has been constituted which will
past. It is pertinent to recall that the industry recorded a negative growth of 0.6% for two consecutive years (2011-12 and expedite the requisite clearances to enable the early start of mining activity.20
2012-13). NATIONAL MINERAL POLICY 2019
The aim on the National Mineral Policy (NMP) 2019 is to have an effective, meaningful and implementable policy that brings further
 The mineral production statistics of 2017-18 have shown a mixed trend as compared to that of 2016-17.13 The states that
transparency, better regulation and enforcement, balanced social and economic growth as well as sustainable mining practices. The
have witnessed an increase in the value of mineral production are:
NMP 2019 focuses on the Government’s Make in India initiative and gender sensitivity in terms of its vision.21 The NMP 2019 aims to
1. Karnataka – 30.66%
attract private investment through incentives while the efforts would be made to maintain a database of mineral resources and
2. Chhattisgarh - 29.98%
tenements under the mining tenement system.
3. Rajasthan – 25.61%
KEY ACHIEVEMENTS
4. Goa – 23.46%
5. Odisha – 21.98%
Page 16 of 30
  Up till November 2018, 50 mineral blocks across nine States have been auctioned. The States include Rajasthan, Odisha,
Madhya Pradesh, Chhattisgarh, Karnataka, Jharkhand, Andhra Pradesh, Gujarat and Maharashtra. The estimated value of
the e-auctioned minerals stands at approximately US$ 31.6 bn.
 Restrictions on sharing baseline geo-scientific data in public domain have been relaxed by the Ministry of Defence.
(15) OIL AND GAS
SUMMARY
 The Oil and Gas industry in India is set for a sea change with recent developmental ambitions of the Government of India –
175 GW of installed capacity of renewable energy by 2022. Moreover, the aim to achieve 100 smart cities mission, 10%
reduction of oil and gas import dependence by 2022 and provision of clean cooking fuels. 1
 As on 31 March 2017,
1. Estimated reserves of crude oil in India stood at 604.10 mn tonnes (MMT).
2. Estimated reserves of natural gas in India stood at 1289.81 bn cubic meters (BCM). 2
3. Estimated coal bed methane (CBM) resources are of the order of 2600 bn cubic metres (BCM).
 The predicted conventional hydrocarbon resources in 26 sedimentary basins are of the order of 41.87 bn tonnes (oil and oil
equivalent of gas), which is about 49% increase as compared to earlier estimates of 28.08 bn tonnes. 3
 India is the second largest refiner in Asia after China. It is emerging as a refinery hub with refining capacity exceeding
demand.4 The country’s refinery capacity has increased to 247.57 MMTPA. 5
REASONS TO INVEST
 The growing economy and population growth are the main drivers for oil & gas demand, increasing every year.
 The import content in the Oil & Gas industry in India is in the range of 15% for a refinery to 67% for upstream.
 In 2018, the Government of India launched the Bid Round-I under Open Acreage Licensing Policy (OALP) for international
competitive bidding. For the first time in India, 55 bidder selected blocks carved out by prospective bidders themselves.
 National Data Repository (NDR) has been set up on 28 June 2017, at Directorate General of Hydrocarbons (DGH), to make
the entire Exploration and Production (E&P) data available. This is mainly for commercial exploration, research and
development and academic purposes.6
 National Gas Grid (Pradhan Mantri Urja Ganga): India targets to have a gas-based economy and boost the share of gas in the
energy basket to 15%. The Government has approved a capital grant of US$ 739 mn to provide clean energy in East India.
 Pradhan Mantri Ujjwala Yojana (PMUY): PMUY launched in FY 2016-17 to provide LPG connections to 50 mn women from
the Below Poverty Line(BPL) families. PMUY scheme is for a period of 3 years ending in FY 2019-2020.7
 Several private companies have emerged as important players. Cairn India contributed ~25% to India's domestic crude oil
production in the FY 2017-18. Cairn has the vision to produce 50% of India’s oil and gas.8
 Supportive Government Regime — ease of doing business moved to industry-specific policy HELP (Hydrocarbon Exploration
& Licensing Policy). Also, to encourage private players and global oil companies, income generated from storage and selling
of crude oil in strategic crude oil reserves has been exempted from Income Tax.
 Gas initial is in place for Coalbed Methane (CBM) established at 9.9 tn cubic feet (Tcf) (280.34 BCM) with the possibility of an
upside. 9
 Being a net importer of crude oil, India has also become a net exporter of petroleum products by investing in refineries
designed for export, particularly in Gujarat.
 Investment opportunities are in the upstream, gas pipeline, city gas distribution (CGD) network, LNG terminal,
petrochemical and refinery.
 India's largest grass-roots refinery of 60 MMTPA capacity at west coast to be set-up by oil & gas CPSEs (Central Public Sector
Enterprise).
 Gas based economy is being developed by connecting major cities with green highways. The highways will have vehicles
running on CNG and LNG with adequate re¬fuelling stations.
 The 2 world class gas hydrate reservoirs are discovered in ultra-deep waters of KG basin under national gas hydrate
programme-2. This has opened new avenues for alternative resources.
 Abundant opportunities are present for the development of underground coal gasification, coal to liquids etc.
STATISTICS
 The Oil and Gas industry in India ranks amongst India's 8 core industries.
 India is the 3rd largest consumer of oil in the world, after the United States & China, as per 2018. 10
 Oil imports constitute about 83.7% of India's total domestic oil consumption in 2018-19.11
 Oil and gas contribute about 41.73% to primary energy consumption in India. 12
 India had 54 tn cubic feet of proven natural gas reserves at the start of 2015. Approximately 34% of total reserves are
located onshore, while 66% is offshore.
 India has 247.566 MMTPA of refining capacity with a surplus refining capacity of about 15%, 13making it the 2nd largest
refiner in Asia after China.
 India is the 4th largest LNG (Liquified Natural Gas) importer in 2017 and accounted for 7.1% of global imports. 14
GROWTH DRIVERS
1. As part of International Energy Outlook 2018, more than 40% of global demand was in Europe & North America. About 20%
demand was seen in developing economies in Asia in 2000 and this situation is expected to reverse by 2040.15
2. The Oil and Gas industry in India plays a predominant role as over 1/3rd of the energy required is met by the hydrocarbons.
3. As on February 2019, 16,788 km natural gas pipelines are operational and about 14,239 km gas pipelines are being
developed, to increase the availability of natural gas.16
4. Priority for allocation of domestic gas has been accorded to PNG (Piped Natural Gas) / CNG (Compressed Natural Gas)
segments for meeting 100% demand and faster rollout of PNG connections and CNG stations. There are plans to connect
326 cities with a city gas distribution network (CGD) by 2022.
5. In a bid to improve oil security, crude oil strategic storage of 5.33 MMT capacity has been built at 3 locations viz.
Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT). The project at Visakhapatnam is already
commissioned, while Mangalore and Padur are under advanced stage of commissioning.
6. New Domestic Gas Pricing guidelines, reforms in existing contracts, calibrated marketing freedom, clarity on testing
requirements under exploration and production have resulted in unlocking of reserves valued at US$ 53.84 bn.
7. India's refining capacity is estimated to reach 280.320 MMTPA by 202217 after completion of projects undertaken by several
refineries, which are currently under various stages of implementation.
8. E&P sector has undergone complete re-engineering to strengthen the exploration and production of India's hydrocarbon
reserves. Many path-breaking policies have been formulated to revolutionize Exploration & Production (E&P) industry. This
includes Hydrocarbon Exploration and Licensing Policy, Discovered Small Field Policy and Gas Pricing Reforms.
9. The price of diesel has been made market determined effective 19 October 2014, resulting in better service delivery, due to
increased competition in the auto fuel industry. The saving in subsidy is available for funding anti-poverty and social sector
schemes.
10. The Government is focused on providing access to affordable, reliable, sustainable and modern energy to every citizen. In a
bid to promote clean cooking fuel, the Government has planned to increase LPG coverage. Presently LPG coverage has
reached 79.2% in 2017-18.18
11. With the launch of the BS IV fuel in 2017, a new era of clean transportation fuels has begun. Next step is to pave the way for
BS-VI fuels by 01 April 2020, to be at par with global standards.19
12. There is a renewed focus on biofuels by promoting ethanol blending programme and bio-diesel programme.
13. The Government has introduced a well-organized system of subsidy delivery to LPG consumers through PAHAL. The
initiative is to rationalize subsidies based on the approach to cut subsidy leakages. As on 6 December 2018, more than 230
mn LPG consumers have joined the PAHAL Scheme. PAHAL has entered into Guinness book of World record as a largest
Direct Benefit Transfer scheme.20
FDI POLICY
 The government has allowed 100% Foreign Direct Investment (FDI) automatic route, in the following:
o Exploration activities of oil and natural gas fields,
o Infrastructure related to marketing of petroleum products and natural gas,
o Marketing of natural gas and petroleum products, petroleum products' pipelines, natural gas pipelines,
o LNG regasification infrastructure, market study, formulation and petroleum refining in the private sector,
o The policy of the government or private participation in the exploration of oil and the discovered fields of natural
oil companies
 The government offers a 49% automatic route, in case of petroleum refining by PSU, without disinvestment of dilution of
domestic equity in existing PSUs.
SECTOR POLICY
1. Hydrocarbon Exploration & Licensing Policy (HELP) replaces the present policy regime for exploration and production of oil
and gas, known as New Exploration Licensing Policy (NELP). HELP provides a uniform licensing system to explore and
produce all hydrocarbons such as oil, gas, coal bed methane, shale oil/gas, etc. under a single licensing framework.
2. With an opportunity to increase domestic production of oil and gas, Government of India in September 2015, in
consultation with ONGC and OIL, approved the Discovered Small Field Policy. This policy aimed for monetization of 69
discovered small fields/discoveries of ONGC and OIL, which had not been put into production. Under the Discovered Small
Field Policy Round-II, on 9 August 2018, Government of India has offered 59 discoveries clubbed under 25 contract areas for
bidding.21
3. Under the New Domestic Gas Pricing Policy, a transparent new gas pricing formula linked to the global market is made
effective from 1 November 2014.
4. Policy framework for relaxation, extensions and clarifications at the development and production stage under PSC
(Production Sharing Contract) regime for early monetization of hydrocarbon discoveries approved on 10 November 2014.
5. Policy for grant of extension to the Production Sharing Contracts of 28 Small and medium-sized discovered blocks approved
on 10 March 2016.
6. Policy on Testing Requirements for discoveries in New Exploration Licensing Policy (NELP) blocks approved on 29 April 2015.
7. Hydrocarbon vision 2030 for North East India has been released in February 2016.
Page 17 of 30
 8. Pooling of gas in fertilizer (Urea) industry was approved on 31 March 2015. Mainly to supply gas at a uniform delivered price
to all fertilizer plants, through a pooling mechanism of domestic gas with R-LNG.
9. The Petroleum and Natural Gas Regulatory Board Act 2006 regulates refining, processing, storage, transportation,
distribution, marketing and sale of petroleum, petroleum products and natural gas.
10. The National Biofuel Policy 2009 promotes bio-fuel usage. The Government of India has provided a 12.36% concession on
excise duty on bio-ethanol and also exempted bio-diesel from excise duty. The Union Cabinet has approved National Policy
on Biofuels – 2018. 22
11. The Government is implementing an Ethanol Blending Petrol programme under which oil marketing companies are
mandated to sell Ethanol blended petrol with up to 10% Ethanol. The mechanism for procurement of ethanol by Oil
Marketing Companies (OMCs) to carry out Ethanol Blended Petrol programme approved on 10 December 2014. The
Government of India has enhanced the Ethanol Procurement Price and opened an alternate route like cellulosic and
lignocellulosic materials, including Petrochemical route.
12. Direct sale of bio-diesel by private manufacturers/suppliers to bulk consumers like Railways and State Transport
Corporations permissible on 10 August 2015.
13. The milestone set in Auto Fuel Policy 2003 is already achieved. Ministry of Petroleum and Natural Gas has issued a
statement to all the concerned stakeholders including oil marketing companies. The statement is for implementation and
expansion of the supply of BS-IV auto fuels in phases by 1 April 2017, as per the road map is given in Auto Fuel Vision &
Policy-2025.
14. The Policy on Shale Gas & Oil, 2013 allows companies to apply for shale gas and oil rights in their petroleum exploration
licenses and petroleum mining leases.
FINANCIAL SUPPORT
FISCAL INCENTIVES
 Various exemptions are given from customs duty on goods imported for petroleum exploration licenses. Also, movement of
goods from one block to another under various types of licenses/mining leases etc., have been merged into a single
exemption, with a unified list of goods and conditions.
 The central sales tax rules have been amended to facilitate smooth trade of natural gas across India, thereby, helping to
build a gas-based economy.
 To increase investment in the exploration industry, no basic customs duty & countervailing duty (CVD) on imports of goods
required for exploration & production of hydrocarbon activities is extended. This is mainly for operations undertaken to
Exploration Licenses & Mining Leases issued or renewed before 1 April 1999.
STATE INCENTIVES
 Each state in India offers additional incentives for industrial projects. Incentives are provided in areas such as
o subsidised land cost
o relaxation of stamp duty on sale/lease of land
o power tariff
o concessional rates of interest on loans
o investment subsidies and/or tax
o backward areas subsidies
o special incentive packages for mega projects
AREA BASED INCENTIVES
 Hydrocarbon Vision 2030 for north-east India has been released. It visualizes an investment of US$20 bn in upstream,
downstream and midstream industry in hydrocarbon industry till 2030. To incentivize E&P (Exploration & Production) 40%
subsidy on gas operation has been extended to private companies operating in the region.
INVESTMENT OPPORTUNITIES
 One of the main components of Hydrocarbon Exploration Licensing Policy has been launched on 30 June 2017, to call for
expression of interest (EOI) for the open acreages. International Competitive Bidding for 55 blocks has been launched
because of blocks identified after receiving Expression of Interest (EOI).23
 For early monetization of discovered small fields, in September 2015, Cabinet approved 69 marginal fields for offer under
Discovered Small Fields Policy. Out of these, 67 Discovered Small Fields were clubbed into 46 contract areas and put on
offer through online international competitive bidding.24
 The government announced to construct Strategic Petroleum reserves under Phase II at two new locations. The Ministry is
working towards obtaining required approvals to set up these SPRs at Chandikhol in Odisha and Padur in Karnataka. 25
 India plans to connect 326 cities with a city gas distribution network (CGD) by 2022. To promote the use of natural gas,
priority for allocation of domestic gas has been accorded to PNG/CNG segments for meeting 100% demand and faster
rollout of PNG connections and CNG stations.
 There is a provision of 100 mn new LPG connections till 2019, of which 50 mn are for BPL households. The Government is
focused on providing access to affordable, reliable, sustainable and modern energy to every citizen.
SHALE
 As per Energy Information Administration (EIA) USA, 584 tn cubic feet (tcf) of shale gas and 87 bn barrels of shale oil in 4
basins (Cambay Onland, Damodar, Krishna Godavari Onland & Cauvery Onland) are estimated as of 2013. 26
UNDERGROUND COAL GASIFICATION
 Coal gasification has been identified as one of the end uses under the government’s captive mining policy.
OPPORTUNITIES FOR PIPELINE TRANSPORTATIONS
 In advanced economies like the US, more than 60% of petroleum product movement happens by pipeline. Whereas in India
only 35% of product movement happens over pipelines. The city gas and distribution industry offer opportunities for both
incumbents and new companies. The Petroleum and Natural Gas Regulatory Board allows the following incentives to
authorised entities:
o Infrastructure exclusivity is available to the authorised entity for a period of 25 years.
o Exclusivity for the activity of marketing of natural gas is allowed to the authorised entity for a period of five years.
o For incumbents, the marketing exclusivity extends to a period of three years. Government has ensured City Gas
Distribution (CGD) companies for availability of domestic gas for CNG (Transport) and PNG (Domestic)
consumption.
THE REFINING SECTOR
 India is already a refining hub with 23 refineries and expansions planned for tapping foreign investment in export-oriented
infrastructure, including product pipelines and export terminals.
OPPORTUNITIES FOR E&P SERVICES AND EQUIPMENT COMPANIES
 India is yet to explore the 48% of the sedimentary area.
 From a total sedimentary area of 3.142 mn sq. km, an area of 1.502 mn sq. km is yet to be appraised. Ministry of Petroleum
and Natural Gas has framed a plan to conduct 2D seismic surveys in all sedimentary basins of India. As on 31 December
2017, 2D Seismic survey work has started and 14,077 LKM (29.18%) of the survey has already been completed. 27
 Re-assessment of hydrocarbon reserves in all 26 sedimentary basins in India to be carried out by ONGC in 2017-18.
OFFERING OF EXPLORATION BLOCKS
 The offering of un-monetized discoveries through international competitive bidding under Small Discovered Field Policy for
early monetization of reserves worth US$ 10.76 bn. The ‘Minimum Government — Maximum Governance’ policy is packed
with all possible reforms like uniform licensing, pricing and marketing freedom, and revenue sharing mechanism. As on 9
August 2018, under the Discovered Small Field Policy Round-II, the Government offered 59 discoveries clubbed under 25
contract areas for bidding. This policy has enabled production at unmonetized discoveries/fields to increase the domestic
production of oil and gas.28
 Marketing and pricing freedom would incentivize gas production from difficult areas, such as deep/ ultra-deepwater and
high pressure/ high temperature. This will further facilitate in the monetization of 6.75 tn cubic feet of gas reserves valued
at US$ 23.07 bn.
 National Data Repository (NDR) has been established to consolidate and store all the Geoscientific data generated. The
objective of NDR policy is to assimilate, preserve and regulate the E&P data generated by various companies collected till
date.29
 To ease out rigidities in the functioning of Production Sharing Contract (PSC) regime, the Government approved policy
framework for relaxation, extension and clarifications for early monetization of hydrocarbon discoveries. This has helped in
the resolution of around 40 pending issues and move ahead with discoveries valued at US$ 4.6 bn.
 Policy on Grant of extension to the production sharing contracts for small and medium-sized discovered fields would help in
the monetization of resources of the order of US$ 7.69 bn. Policy on the testing requirement in NELP blocks would resolve
existing disputes; facilitate monetization of resources of the order of US$ 11.53 bn.
OPPORTUNITIES FOR FOREIGN INVESTMENTS AND TECHNOLOGY PARTNERSHIPS IN THE UPSTREAM SECTOR
 Securing supplies is expected to remain on top of India's energy agenda for the predictable future. While exploration activity
has taken place inland and in shallow basins across the country, it is believed by many that deep water and ultra-deep-water
oil and gas resources hold the key to substantially increasing domestic production. This creates a plethora of opportunities
for strategic investors having the relevant technical expertise and financial muscle.
KEY ACHIEVEMENTS
 Crude oil strategic storage of 5.33 mn metric tonne (MMT) commissioned at Visakhapatnam, Mangalore and Padur
 IOCL refinery with a capacity of 15 mn metric tonnes per annum (MMTPA) commissioned at Paradip, Odisha
 Under OALP Bid Round I, 55 blocks having an area of 59,282 sq. km have been awarded
 The 2nd Bidding Round under DSF Policy offering 59 discoveries have been launched
 Development of additional 13500 Km long gas pipeline is underway
 Remunerative price is fixed for ethanol procurement, based on raw material utilized for ethanol production
 As on 31 October 2018, the surface coverage of 28485 LKM, out of 48243 LKM has been achieved under 2D seismic data
acquisition under National Seismic Programme.30
 On 14 August 2016, ONGC launched a Start-Up Fund of US$ 1.43 bn, to support, raise and foster start-ups in the energy
sector. 31
(16) PHARMACEUTICALS
SUMMARY
Page 18 of 30
  India is the 3rd largest Pharmaceuticals industry in the world by volume. THE NATIONAL PHARMACEUTICAL PRICING POLICY, 2012 (NPPP-2012) NOTIFIED ON 07 DECEMBER 2012, WITH THE FOLLOWING
 The Indian Pharmaceutical industry has contributed significantly to global healthcare by ensuring high quality, affordable SALIENT FEATURES:
and accessible medicines around the world.  The regulation of prices of drugs on the basis of the essentiality of drugs as specified under the National List of Essential
 India remains an attractive destination for generic R&D and manufacturing of pharmaceuticals owing to its strong Medicines (NLEM) – 2011.
capabilities across the value chain.1  The regulation of prices of drugs on the basis of regulating the prices of formulations only.
 The Pharmaceutical industry in India stood at US$ 38.2 bn in the FY 2018-19. The compound annual growth rate (CAGR) of  The regulation of prices of drugs on the basis of fixing the ceiling price of formulations through Market-Based Pricing.
15.4% between 2014 and 2018 was seen in the sector. 2  The provision of exemptions to drugs manufactured through indigenous R&D from price control for five years.
 India exports to more than 200 countries, with the US as the main destination, and pharmaceutical exports stood at US$  A Drug Price Control Order 2013 has been notified in May 2013 to implement the provisions of NPPP-2012.
13.94 bn in the fiscal year 2019 (up to December 2018).3 UMBRELLA SCHEME
 There are over 10,500 manufacturing units and 3,000 pharma companies in India. Over 60,000 generic brands exist across  The Department of Pharmaceuticals has prepared an Umbrella Scheme namely ‘Scheme for Development of Pharma
60 therapeutic categories industry’.
 India accounts for 20% of global exports in generics, making it the largest provider of generic medicines globally. Indian  The said Umbrella Scheme comprises of the following sub-schemes:
vaccines are exported to 150 countries. o Assistance to Bulk Drug Industry for Common Facilitation Centres
 Driven by the Pharma Vision 2020, the Indian Government has embarked on its journey to becoming a leading country for o Assistance to Medical Device Industry for Common Facilitation Centres
end-to-end manufacturing and innovation and has sought to incentivise investment into local medicine production to o Assistance to Pharmaceutical Industry (CDP-PS)13
increase self-sufficiency. PHARMACEUTICALS PROMOTION DEVELOPMENT SCHEME (PPDS)
 The Government also aims to augment infrastructure through the 'Make in India' initiative, aims to improve the quality of  Under the PPDS, the Department of Pharmaceuticals aims to:
the workforce and aims to increase funds for innovation. This is all in line with the country's focus to ensure that India is one o Conduct Training/knowledge improvement programs/activities on issues/subjects relevant to the growth of the
of the top five pharmaceutical innovation hubs by 2020.4 pharmaceutical industry.
REASONS TO INVEST o Organize Summits, Convention, Exhibitions, Pharmacy week, meetings etc. in India and abroad and produce
 India's healthcare market may see a threefold jump in value terms to reach US$ 372 bn by 2022 with rising income, greater promotional materials like films, displays etc.
health awareness, increased precedence of lifestyle diseases and improved access to insurance. 5 o Conduct research studies, sector reports etc.
 Ayushman Bharat is National Health Protection Scheme, which will cover over 100 mn poor and vulnerable families o Purchase books, quality standards, pharmacopoeias, magazines, directories, software for developing information
(approximately 500 mn beneficiaries) providing coverage up to US$ 7,150 per family per year for secondary and tertiary data banks, developing e-learning modules etc.
care hospitalization.6 o Give awards to achievers in pharmaceutical industry.14
 Medical tourism to India is on a rise, primarily due to its expertise in cardiac and orthopaedic procedures, in addition to FINANCIAL SUPPORT
other specialized areas like neuro-surgeries, cancer treatment and organ transplantation. RESEARCH & DEVELOPMENT
 Drugs worth US$ 130 bn are expected to go off-patent between FY 2017 to FY 2022, presenting a huge market opportunity  Weighted tax deduction of 200% under section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure
for Indian manufacturers. incurred on scientific research and development. Expenditure on land and buildings are not eligible for deduction.
 With the increasing penetration of chemists, especially in rural India, OTC drugs will be readily available. INVESTMENT OPPORTUNITIES
 Pharma companies have increased spending to tap rural markets and develop better infrastructure.  Emerging segments such as Biosimilars and Specialty drugs
 In January 2019 the government amended the Indian Patents Act, 1970, exempting newly patented drugs from price  Contract Research and Manufacturing Services (CRAMS)
controls for five years.7 FOREIGN INVESTORS
 The government is revitalizing the decade-old Jan Aushadhi scheme to provide affordable medicines, by setting up stores to  Teva Pharmaceuticals (Israel)
provide cheaper generic drugs and medical devices. By January 2019 it had opened 4,677 stores and plans to open 2,500  Nipro Corporation (Japan)
more stores by 2020.8  Procter & Gamble (USA)
 India’s cost of production is significantly lower than that of the USA and almost half of that of Europe.  Pfizer (USA)
 Presence of a skilled workforce as well as high managerial and technical competence.  Glaxo Smith Kline (UK)
STATISTICS  Johnson & Johnson (USA)
 India's pharmaceutical exports stood at US$ 18.5 bn in 2018, up from US$ 16.8 bn in 2017. Exports are expected to grow  Otsuka Pharmaceutical (Japan)
strongly during 2019-23, predominantly if India secures a free-trade agreement (FTA) with the Eurasian Economic Union or a  AstraZeneca (Sweden-UK)
Regional Comprehensive Economic Partnership in Asia.9 KEY ACHIEVEMENTS
 Indian pharmaceutical companies account for 30% of the US' generic drug imports with exports to the US and other ‘PRADHAN MANTRI BHARTIYA JANAUSHADHI PARIYOJANA’ (PMBJP) DECEMBER 2018
regulated western markets accounting for over 50% of the country's global medicine exports.10  4504 PMBJP Kendras functional in 35 States/UTs of the country.
 In 2018, generic drugs accounted for 88.3% of prescription drug sales and 75.5% of total sales.  800+ medicines and 154 surgical & consumables available in the product basket.
 In 2018, healthcare spending reached a value of US$ 118 bn. In 2019, it is estimated that healthcare spending will reach a  625 medicines and 32 surgical & consumables available in CWH of BPPI for sale.
value of US$ 124.6 bn, growing 12.7% from the previous year in local currency terms. By 2023, it is expected that the health  PMBJP guidelines amended to provide incentives to PMBJP Kendras run by private entrepreneurs on the basis of their
expenditure will reach a value of US$ 210.58 bn, representing a CAGR of 12.6% in local terms and 12.3% in US dollar terms. purchase of medicines (from Distributor/ Central Warehouse/ Regional Warehouse) in a month.
 Over the long-term, healthcare spending is expected to reach US$ 398 bn in 2028. By 2028, health expenditure will  Use of point-of-sale software by PMBJP Kendra will not be a mandatory condition for receipt of incentives.
represent 5.5% of GDP. NATIONAL INSTITUTE OF PHARMACEUTICAL EDUCATION AND RESEARCH (NIPER):
 Government expenditure on healthcare reached US$ 36.4 bn in 2018, accounting for 30.8% of total health spending. 11  Directors at NIPER Hyderabad and Hajipur appointed in June 2018 and November 2018 respectively. All NIPERs have regular
FDI POLICY Directors.
 100% FDI has been allowed through automatic route for Greenfield pharmaceuticals projects  Constitution of BoG for other six NIPERs in process.
 For Brownfield pharmaceuticals projects, FDI has been allowed up to 74% through automatic route and beyond that  60% work of construction of NIPER Guwahati campus completed.
through government approval  50 acres of IDPL land allotted to NIPER Hyderabad.
SECTOR POLICY  Govt. of West Bengal recently allotted 10 acres of land at Nadia District for NIPER Kolkata.
PROVISIONS OF BUDGET 2019-20  Department decided to accept 12.5 acres of land allotted by State Govt. for NIPER Hajipur.
 As per the Union Budget 2019-20, the allocation to the Department of Pharmaceuticals has been US$ 33 mn. 12  Construction of regular campus approved for NIPER Ahmedabad and Guwahati
MEDICAL DEVICES SECTOR:
Page 19 of 30
  The Department of Pharmaceuticals issued guidelines for implementation of Public Procurement (Preference to Make in COASTAL BERTH SCHEME
India) Order, 2017 related to Medical Devices on 15 June 2018.  The scheme aims to provide financial support to ports/state governments for the creation of infrastructure for movement of
SCHEME FOR DEVELOPMENT OF PHARMACEUTICAL INDUSTRY: cargo/passenger by sea or National Waterways.22
 Central Sector Scheme with a total financial outlay of US$ 67.48 mn. MAJOR PORT AUTHORITIES BILL, 2016
 Objective to ensure drug security in the country by increasing the efficiency and competitiveness of the domestic  The bill aims to decentralize decision making and infuse professionalism in governance of ports. It will also help bring
Pharmaceutical industry transparency in operations of various ports.23
‘AFFORDABLE & QUALITY HEALTHCARE FOR ALL’ - AVAILABILITY OF CHEAPER MEDICINES REVAMPED MERCHANT SHIPPING BILL, 2016
 National Pharmaceutical Pricing Authority (NPPA) has fixed retail prices of the 357 new drug under DPCO 2013 in 2018.  The bill replaces the Merchant Shipping Act of 1958. The bill aims to promote ease of doing business to meet new
 Cardiac Stents to cost 85% lesser challenges that the merchant shipping sector faces. The act will; (i) safeguard rights and privileges of seafarers; (ii) enhance
 Knee Implants to cost 69% lesser 15 safety and security of vessels and life at sea; and (iii) develop Indian coastal shipping and trade.24
 To increase investments into the port sector, the Government revised the Model Concession Agreement (MCA) for PPP
(17) PORTS AND SHIPP ING projects in major ports. This includes the establishment of the Society for Affordable Redressal of Disputes- Ports as a
SUMMARY dispute resolution mechanism.
 India has 121 major ports and around 2002 minor ports. FINANCIAL SUPPORT
 The total cargo handling capacity of Major ports during 2017-18 was 1451.2 Million Metric Tonnes Per Annum (MMTPA).3 KEY PROVISIONS IN UNION BUDGET 2019-20
 Ports in India handle more than 90%4 (by volume) and 72%5 (by value) of India’s external trade.  Total allocation made to Ministry of Shipping in 2019-20 stands at US$ 272 mn.25
REASONS TO INVEST  Total capital expenditure allocation in the union budget 2019-20 stands at US$ 38.1 mn.26
 The Ministry of Shipping strives to increase the overall port capacity to 3500+ million metric tonnes per annum (MMTPA) to  Total budget allocation towards the development of major ports stands at US$ 14.08 mn and is US$ 15.7 mn for minor
cater to projected traffic of 2500 MMTPA by 2025.6 ports.27
 The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, adding 275-325 million metric tonnes (MMT)  An allocation of US$ 78.7 mn has been made towards the Sagarmala Projects.28
of capacity.7  The total allocation towards inland water transport stands at US$ 108.3 mn.29
 India’s cargo traffic handled by ports is expected to reach 1,695 MTPA by 2020. 8 For further details about the budget allocation for the Ministry of Shipping, please log onto Budget Allocation for Ministry of
 The National Maritime Development Programme (NMDP) has been formulated by the Ministry of Shipping. The total Shipping.
investment involved under the programme is US$ 14.3 bn.9 INVESTMENT OPPORTUNITIES
 Port projects involving investment of over US$ 10 bn identified for award for the upcoming five years.  Shipbuilding
 An integrated and comprehensive plan for port-led industrialization has been developed. The plan combines the growth  Ship repair
potential of port-linked industries with the competitive location for each industry. The port-led industrialization program is  Ship recycling
going to be delivered through Coastal Economic Zones (CEZs) and industrial clusters. Each CEZ will consist of multiple  Development of inland waterways and inland water transport
industrial clusters categorised under energy, material and discrete industries.10  Port and harbour construction projects
 91 initiatives under Project Unnati, to improve the efficiency and productivity of the major ports, have been implemented.  Port and harbour maintenance projects
These initiatives will unlock around 80 MMTPA capacity.11 FOREIGN INVESTORS
 India’s increasing integration into Global Value Chains requires a well-established port infrastructure.  AP Moller Maersk (Denmark)
STATISTICS  PSA Singapore (Singapore)
 India is the 16th largest maritime country in the world, with a coastline measuring more than 7500 km.12  Dubai Ports World (UAE)
 The cargo handling capacity of Major Ports stands at 1451.19 MMTPA in 2017-18.13 This is a 385.36 MMTPA increase from  Hyundai Engineering and Construction Company Limited (South Korea)
the 2016-17 value of 1065.83 MMTPA. KEY ACHIEVEMENTS
 During 2017-18, the cargo traffic handled at major ports was 679.36 MMTPA, an increase of 5% from 2016-17.14  Under the Sagarmala Programme, 89 projects were completed, while 443 projects worth US$ 617.9 bn are under various
 Traffic handled at Major Ports in April 2019 was 60 MMTPA. The value in April 2018 was 56 MMTPA. 15 stages of implementation and development.30
 The traffic handled at non-major ports, for 2016-17, stands at 485.2 MMTPA.16  The average turnaround time (in hours) reduced to 60.48 hours (up to 31 October 2018) from 64.32 hours in 2017-18.31
 Cargo handled at ports during the period April’2017- January’ 2018: Petroleum, Oil and Lubricants (33.74%, followed by  The average output per ship berth has increased to 16,166 (up to 31 October 2018) from 15,333 in 2017-18.32
Container (19.70%), Thermal & Steam Coal (13.72%), Other Misc. Cargo (12.09%), Coking & Other Coal (7.60%), Iron Ore &  Six new port locations – viz Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour
Pellets (6.72%), Other Liquid (4.15%), Finished Fertilizer (1.17%). (Odisha), Sirkazhi (Tamil Nadu) and Belekeri (Karnataka) have been identified to increase overall cargo handling capacity.33
FDI POLICY  More than 50 projects with an investment of US$ 1.4 bn and involving capacity addition of 90 MMTPA are being awarded
The Government of India allows 100% FDI under the automatic route for port development projects. 17 during 2018-19.34
SECTOR POLICY
SAGARMALA
 Sagarmala aims to change India’s logistics sector performance, by unlocking the full potential of India’s coastline and (18) RAILWAYS
waterways. Various projects have been initiated under the Sagarmala project: 18
o Port connectivity enhancement SUMMARY
o Port connectivity enhancement  The Indian Railways network spans more than 68,442 km1, as of March 2018.
o Coastal Community Development  The Indian Railways runs 12,617 trains that carry 23 mn passengers on a daily basis.2
 The Sagarmala Project has the following aims:19  The Indian Railways currently employees 1.3 mn3 (as of March 2018).
o Reduce logistic cost for export import (EXIM) and domestic trade with minimal infrastructure investment  The Indian Railways aims to be the driver of India’s economic growth and development by being safe, financially viable and
o Optimise cost of EXIM container movement environmentally friendly.4 The focus to achieve this goal is through resolution of key concerns such as passenger experience,
o Lower the logistics cost of bulk commodities by locating future industrial capacities near the cost zero fatality, cost, sustainability.5
o Improve export competitiveness by developing port proximate discrete manufacturing clusters REASONS TO INVEST
o Reduce cost of transporting domestic cargo through optimising modal mix  The railway infrastructure segment allows 100% foreign direct investment (FDI), opening opportunities for participation in
 The Sagarmala Project is predicted to mobilise infrastructure investments worth US$ 5.7 bn by 2025. 20 It is predicted, that projects such as high-speed railways, railway lines to and from coal mines and ports, electrification, high-speed tracks and
by 2025, the estimated logistics cost saving per annum will be US$ 5-5.7 bn.21 suburban corridors.6

Page 20 of 30
  The Indian Railways aims to invite private equity through individuals, NGOs, trusts, charitable institutions, corporates, etc.  The Indian Railways achieved the country’s highest ever freight loading in 2018-19. Freight earnings are expected to be
to provide passengers with a better experience. Some measures taken in this regard include: valued at US$ 20.5 bn in budget estimates (BE) 2019-20.25
o Battery-operated carts to facilitate movement for senior citizens and differently-abled at stations.  The first phase of the Eastern Dedicated Freight Corridor (Bhadan to Khurja, 200 km) and Western Dedicated Freight
o Standard ramps for barrier-free entry at 2,350 stations Corridor (Rewari to Madar, 200 km) have been completed.26
o Non-slippery walk ways from the parking lots to the stations at 1,410 stations. FDI POLICY
 The Ministry of Railways is making provisions to involve Public Private Partnership (PPP) investments to boost passenger The FDI Policy permits 100% FDI in railways infrastructure sector. FDI is permitted in the construction, operation and maintenance of
amenities. These amenities include foot-over bridges, escalators and lifts at all major stations, automatic ticket vending the railway transport sector:27
machines (ATVM) at railway stations for dispensation of tickets, computerised passenger reservation system (PRS), 1. Suburban corridor projects through PPP model
introduction of alternate train accommodation scheme for waitlisted passengers, “Vikalp”, etc. 2. High-speed train projects
 The National High-Speed Rail Corporation Limited (NHSRCL) has launched the high-speed train corridor project between 3. Dedicated freight lines
Ahmedabad and Mumbai.7 The project, commonly referred to as the ‘Bullet Train’ project, is being implemented with 4. Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities
technical and financial assistance from Japan. The high-speed railway line covers a distance of 508.2 km8 in approximately 5. Railway electrification
two hours with an operating speed of around 320 kmph.9 It is expected to become operational by 2023. Of the total project 6. Signalling systems
cost, 81% is in the form of a loan from Japan International Coeporation Agency (JICA). 10 While most of the corridor is 7. Freight terminals
proposed to be on an elevated track, there will be a stretch that will be under the sea. 11 8. Passenger terminals
 The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is an undertaking by the Ministry of Railways to 9. Infrastructure in industrial park pertaining to railways line/sidings including electrified railways lines and connectivity to the
overlook planning, development and mobilisation of financial resources, construction, maintenance and operation of the main railway’s line
Dedicated Freight Corridors. Two projects have been commissioned under the DFCCIL – the Eastern Dedicated Freight 10. Mass Rapid Transport Systems
Corridor (1,856 km) and the Western Dedicated Freight Corridor (1,504 km). These corridors provide India with the Further information can be viewed on Sectoral guidelines for Domestic/Foreign Direct Investment in Railways.
opportunity to create one of the world’s largest freight operations.12 It is predicted that 92 mn tonnes of traffic would move SECTOR POLICY
through the Eastern Dedicated Freight Corridor. The Dedicated Freight Corridors are also expected to reduce GHG  In 2016, the Ministry of Railways developed the National Rail Plan 2030.28 The aim of the Plan is to harmonise and integrate
emissions.13 the rail network with other modes of transport to achieve a seamless multi-nodal transportation network across India.
 Certain stations have been identified to be developed as per international standards with modern facilities and passenger For further information, log on to National Rail Plan, 2030.
amenities on the lines of newly developed airports, using PPP model.  In 2015, the ‘Foreign Rail Technology Cooperation Scheme’ was launched to achieve higher quality rail service for the
 The ‘Green Energy Project’ of the Indian Railways is important, given the growing concern for environmental pollution, nation. MoUs have been signed in the past for technical cooperation with a number of foreign railways or their entities.
depleting fossil fuels and global warming. The Indian Railways has started making use of solar and wind energy sources to  The Indian Railways formulated the Policy for Participative Investment Models in Rail Connectivity and Capacity
meet their energy requirements.14 A proposal is in place to harness solar energy by utilizing rooftop spaces on railway Augmentation Projects to attract private capital for accelerated construction of fixed rail infrastructure. The Policy aims to
stations, other railway buildings and land, through the PPP model. Indian Railways aims to achieve 5 GW of their energy strengthen, modernise and expand the Indian Railways network.
requirements through solar energy, with 3.9 GW from utility scale projects and the remaining from the rooftop. This would The advantages of this policy for the investors are:
result in 25% of the Indian Railways’ electricity mix derived from renewables by 2025. The Indian Railways has signed an 1. Opportunity for returns from investment in rail project
MoU with GAIL (India) Ltd to provide infrastructure facilities for supply of natural gas to their workshops, production units 2. Ensures timely availability of rail infrastructure to the beneficiaries viz, ports, industries and states.
and depots. This replacement is expected to reduce costs by INR 20 crore per annum for the Indian Railways.15 For further information, log onto Overview Framework.
 Project Swarn has been initiated to improve passenger experience of the Rajdhani and Shatabdi Express Trains. The FINANCIAL SUPPORT
dimensions that will be worked on are coach interiors, toilets, onboard cleanliness, staff behaviour, catering, linen, FOR MANUFACTURING ACTIVITY:
punctuality, security and on-board entertainment.16 STATE INCENTIVES:
 The Ministry of Railways is making efforts to reduce travel time for passenger trains by increasing the speeds of all long-  State governments offer additional incentives for industrial projects. Incentives are in areas such as rebates in land cost,
distance passenger trains and introducing semi high speed trains that may eventually replace Shatabdi and Rajdhani relaxation in stamp duty on the sale or lease of land, power tariff incentives, concessional rates of interest on loans,
trains.17 ‘Mission Raftaar’ was announced in the railway budget 2016-17 which aims to double the average speed of freight investment subsidies/tax incentives, backward areas subsidies and special incentive packages for mega projects.
trains and increase the average speed of all non-suburban passenger trains on selected routes by 25 kmph in the next five  Ministry of Railways is in a continuous process to sign Joint Ventures with the states to expedite the process of railway
years.18 network. Government of Jharkhand is the 9th state to form a Joint Venture with Ministry of Railways to construct rail line of
 Speed enhancement projects have been initiated to raise the speed of trains on two routes – New Delhi-Mumbai Central 222 km at a cost of USD 0.33 billion .
and New Delhi-Howrah – to 160 to 200 kmph. Speed enhancement project includes works such as fencing, removal of level EXPORT INCENTIVES:
crossings, train protection warning system (TPWS), mobile train radio communication (MTRC), automated and mechanised  Various kinds of incentives on exports are available under foreign trade policy.
diagnostic systems, etc.19 AREA BASED INCENTIVES:
 The Central Organisation for Railways Electrification (CORE) has electrified a total of 29,288 route kilometre (RKM) till 2017-  Incentives for units in Special Economic Zones (SEZ) / National Investment & Manufacturing Zones (NIMZ) as specified in
18, which accounts for about 43.5% of the total RKM of the Indian Railways.20 respective Acts or setting up of projects in special areas such as the North-east, Jammu & Kashmir, Himachal Pradesh &
 The antiquated signalling system is going to be revamped in phases to enhance safety and increase average speed of trains. Uttarakhand.
The new European Train Control System-2 (ETCS2) will allow for increased train speeds, which will in turn help run more Key points in the Rail Budget 2019-20:
trains with the same infrastructure. The move will also enhance safety on the tracks. 21  Capital support of US$ 9.2 bn for the Indian Railways.29
STATISTICS  Overall capital expenditure programme of US$ 22.7 bn.30
 The Indian Railways operates more than 20,000 trains every day, to move more than 3 mn tonnes of freight traffic and more  To eliminate all Unmanned Level Crossings on broad gauge. 31
than 23 mn passengers daily.22  The operating ratio to improve to 95% in 2019-20 (BE).32
 In 2017-18, 29,376 km of railway line was electrified.  Semi high-speed ‘Vande Bharat Express’ introduced. It is the first train to be indigenously developed and manufactured in
 The total track length of the Indian Railways is 123,236 km, connecting 7,318 railway stations. India.33
 A total of 13,452 passenger trains and 9,141 goods trains are operated daily. INVESTMENT OPPORTUNITIES
 Between April 2014 and December 2018, 3,601 bridges have been repaired, strengthened, rehabilitated or rebuilt by the  Suburban corridor projects through PPP34
Indian Railways.23  High-speed train projects35
 The construction of the 4.9 km long Bogibeel Bridge was completed. It is the longest rail-cum-road bridge in India and  Upcoming dedicated freight lines36
reduces the journey time from Itanagar to Dibrugarh to only five hours from 24 hours. 24  Rolling stock including train sets and locomotives or coach manufacturing and maintenance facilities 37
 Railways electrification38
Page 21 of 30
  Signalling systems39
 Freight terminals or logistics parks40
 Passenger terminals41
 Railways technical training institutes42
 Testing facilities and laboratories43
 Concessions in standalone passenger corridors (brand lines, hill railways, etc.) 44
 Non-conventional sources of energy45
 Mechanized laundry46
 Rolling stock procurement47
 Bio-toilets48
 Technological solutions for manned and unmanned level crossings49
 Technological solutions to improve safety and reduce accidents50
FOREIGN INVESTORS
 Alstom Transport Holdings B.V. (Netherlands)
 Bombardier (Singapore)
 Ansaldo STS (Australia)
 GE Capital International (Mauritius)
 Inversiones EN Concesiones (Spain)
KEY ACHIEVEMENTS
1. Safety has been of foremost importance to the Indian Railways. There has been an 81% drop in the number of deaths from
152 during 2013-14 to 29 during 2018-19(till January).51
2. The semi-high speed (160 kmph) self-propelled Train 18 is being manufactured in India, boosting the Government’s ‘Make in
India’ initiative.52
3. The Indian Railways has focused on digital initiatives to become more transparent and accountable. 53
4. India’s longest rail-road bridge connects Assam and Arunachal Pradesh, thus making the Northeast accessible by train. 54
5. Over 4,405 km of railway track renewal was carried out in 2017-18.55
(19) RENEWABLE ENERG Y
SUMMARY
 In December 2018, the global renewable energy generation capacity amounted to 2,351 GW. 1
 Hydropower constituted around half the share of the global total energy capacity, with an installed capacity of 1,172 GW.2
 India has the 4th largest wind power capacity in the world. In October 2018, wind power installed capacity stood at 34.9
GW.3
 India has the 5th largest solar power capacity in the world. Solar Energy capacity increased to 24.3 GW in October 2018.4
 The world’s largest ground-based solar power plant is located in Kamuthi (Tamil Nadu, India) and the world’s largest rooftop
solar plant is located in Beas (Punjab, India).5
 Biomass power includes installations from biomass combustion, biomass gasification and bagasse co-generation, for which
capacity stands at 9.5 GW as of November 2018.
 Total renewable energy capacity in November 2018 stood at 73.4 GW (21.1%) apart from hydropower at 45.58 GW (13.1%).
REASONS TO INVEST
 Economic growth, increasing prosperity, a growing rate of urbanization and rising per capita energy consumption is
contributing to increasing demand for energy in the country.
 The target of National Solar Mission has been up-scaled to 100 GW from 20 GW of grid connected solar power by 2022. This
is creating a positive environment among investors keen to tap into India’s renewable energy potential. 6
 India’s estimated renewal energy potential stands at 1,096 GW from commercially exploitable sources. This includes Wind –
302 GW (at 100-meter mast height), Small Hydro – 21 GW, Bio-energy – 25 GW and Solar Power - 750 GW, assuming 3%
wasteland.7
 India is the 4th largest importer of oil and the 15th largest importer of petroleum products and Liquefied Natural Gas (LNG)
globally. The increased use of indigenous renewable resources is expected to reduce India’s dependence on expensive
imported fossil fuels.
 As per the Paris Accord on Climate Change, the Government of India has set a target of adding 175 GW of renewable power
by 2022, which will offer massive investment opportunities across the value chain. 8
STATISTICS
 A total of around 73.4 GW of renewable energy capacity was installed in 2018 (till October). 9
 Wind Power capacity addition in 2016-17 amounted to 5.5 GW, the largest ever and exceeded the target by 38%. Between
April and November 2018, a total of 841 MW capacity has been added making the cumulative capacity to 34.9 GW. 10
 In terms of wind power installed capacity, India is globally placed at 4th position after China, US and Germany.
 Solar Power capacity addition in 2017-18 amounted to 9.4 GW which is largest till date. Between April and November 2018,
a total 2.6 GW capacity has been added making the cumulative capacity to 24.3 GW. 11
 Over 196,000 solar pumps were installed in the Country, along with 1.7 mn solar home-lights as of October 2018. 12
 Solar projects of capacity 22.8 GW were tendered and 13.8 GW under implementation till November 2018. 13
 Small hydropower plants had a capacity addition of 0.7 GW under grid-connected renewable power between April 2014 to
October 2018.
 Biomass power includes installations from biomass combustion, biomass gasification and bagasse co-generation.
Cumulative capacity of 9.5 GW was achieved till October 2018 against a target of 10 GW bio-power by 2022.14
 Family Type Biogas Plants mainly for rural and semi-urban households are set up under the National Biogas and Manure
Management Programme (NBMMP). In March 2018, the Ministry of New and Renewable Energy set up the annual physical
target of setting up 65,180 biogas plants during 2017-18. Under NBMMP, around 5 mn such biogas plants were installed by
November 2017.15
FDI POLICY
• FDI up to 100% is permitted in the renewable energy sector under the Automatic route and no prior Government approval is
required.
SECTOR POLICY
 Amendments in Tariff Policy 2016 of the Ministry of Power to promote renewable energy:
o Enhancement in Solar Renewable Power Obligation (RPO) to 8% by March 2022
o Introduction of Renewable Generation Obligation (RGO) for new coal/ lignite-based thermal plants after a specified
date.
o Ensuring affordable renewable power through bundling of renewable power with thermal power from unallocated
quota of the Government. This facilitated grid-connected solar power generation at affordable prices to
distribution companies.
o No inter-state transmission charges and losses to be levied for solar and wind power.
 Notification of the long-term growth trajectory of RPO for solar and non-solar energy was published by the Ministry of
Power in June 2018. The targets from solar and non-solar renewable sources, excluding hydro sources, are 17.5%, 19% and
21% for 2019-20, 2020-21 and 2021-22 respectively.
 Development of solar parks and ultra-mega solar power parks.
 Development of power transmission network through Green Energy Corridor Project.
 Roof top solar is now a part of housing loan provided by banks.
 Repowering next phase of wind power projects for optimal utilization of wind resources.
 Offshore wind energy policy for the development of offshore wind energy in the Indian Exclusive Economic Zone.
 Supporting research and development, with industry participation, on various aspects of renewable energy.
 Financial incentives for off-grid and decentralized renewable energy systems and devices for meeting energy needs for
cooking, lighting, and productive purposes.
FINANCIAL SUPPORT
 The Ministry of New and Renewable Energy has announced provision for bank loans up to a limit of US$ 2.3 mn to
borrowers for purposes like solar-based power generators, biomass-based power generators, wind power systems, and
micro-hydel plants.16
 Loans are also provided for renewable energy-based public utilities like street lighting systems and remote village
electrification.
 For individual households, the loan is capped at US$ 15,384 per borrower.
INVESTMENT OPPORTUNITIES
 Green Energy Corridor with an estimated investment of US$ 5.8 bn has been set up to ensure evacuation of renewable
energy from generation points to the load centres by creating transmission infrastructure.
 Scheme for Development of solar parks and ultra-mega solar power projects has an approved capacity of 40,000 MW. This
entails setting up of at least 50 solar parks, each with a capacity of over 500 MW. A planned Central Government financial
support of US$ 1.2 bn is provided for the Scheme.
 Upcoming 100 smart cities under the Smart City Project have huge scope for being powered by renewable energy.
 Hydro projects exempted from competitive bidding until 2022.
 Setting up of small hydro projects declared as ‘Priority’ under National Mission on Small Hydro. Upgradation of watermills
and micro-hydro projects under the same Scheme.
 Battery packs for Electric Vehicles.
FOREIGN INVESTORS
 Enercon (Germany)
 Vestas (Denmark)
 Applied Materials (US)
 Asian Development Bank
 Enel (Italy)
 Gamesa (Spain)
 Orix (Japan)
Page 22 of 30
  Nordex (Germany)
 Mudajaya (Malaysia)
KEY ACHIEVEMENTS
 More than 100 bn kWH of power was generated in the Country during 2017-18 from all renewable energy sources.17
 The cumulative installed capacity of renewable energy has increased from 35.5 GW in March 2014 to 73.4 GW in October
2018.18
 40 solar parks of aggregate capacity of 21,144 MW sanctioned in 21 states.
 Wind Atlas 2015, a Geographic Information System (GIS) was launched.
 Renewable energy sector re-classified as ‘white category’ sector under pollution laws.
 Globally, India ranks 4th in installed wind power capacity and 5th in installed solar power capacity as well as in overall
installed renewable energy capacity.19
(20) ROADS AND HIGHWAYS
SUMMARY
 India has one of the largest road networks in the world. It measures 5,482,809 km. 1
 The National Highways/Expressway measure 120,543 km as of December 2018.2
 The State Highways measure 155,222 km as of December 2018.3
 The implementation agencies of the Ministry of Road Transport and Highways include:
o National Highways Authority of India
o State/Union Territories Public Works Departments
o National Highway and Infrastructure Development Corporation Limited
o Border Roads Organization
o Indian Academy of Highway Engineers (IAHE)
 Historically, investments in the transport sector have been made by the Government. However, to increase private sector
participation, the Ministry has laid down comprehensive policy guidelines for private sector participation in the
development of National Highways.4
REASONS TO INVEST
 The Government offers various incentives to attract Private Investment and Foreign Direct Investment in the roads and
highways sector.
o The Government bears the following costs:
 Project Feasibility Study
 Land for the right of way and wayside amenities
 Shifting of utilities
 Environment clearance, cutting of trees, etc.
 Subsidy up to 40 % of the project cost to make project viable
 100% tax exemption in any consecutive 10 years out of 20 years after commissioning of the project
 Duty-free import of high capacity and modern road construction equipment
 The Government of India is taking many measures to combat vehicular pollution.5
o The Ministry of Road Transport and Highways has come up with initiatives to promote alternate fuels in vehicles.
Electric Vehicles are being given a big push by the ministry. India’s first multi-nodal Electric Vehicle passenger
transport project has been launched in Nagpur with an integrated solution of buses, taxis and e-rickshaws.
o Emission norms for Tractors and Construction Equipment vehicles have been notified for low sulphur fuel, to be
implemented from 01 October 2020.
o Guidelines have been issued to project directors, contractors and field level officials working on highway projects
around Delhi to keep the pollution arising from construction work under check.
 The Government of India is in the process of implementing various roads and highway projects. Some of the projects that
have been implemented/are being implemented are as follows: 6
o Bharatmala Pariyojana: The Bharatmala Pariyojana is the country’s largest ever highways development
programme. It aims to optimize the efficiency of road traffic movement across the country by bridging critical
infrastructure gaps. Multi-nodal integration is one of the key focuses of this programme. Around 53,000 km of
National Highways (NH) have been identified to improve the efficiency of the National Corridors, out of which
24,800 km of NH are to be taken up in Phase 1. Phase 1 is being implemented over 2017-2022. The total fund
provision for Phase 1 is US$ 80.4 bn.
o Chennai-Nashri Tunnel: This 9 km long, twin tube, all-weather tunnel between Udhamput and Ramban in Jammu &
Kashmir is India’s longest highway tunnel. It is also Asia’s longest bi-directional highway tunnel. It is built at an
elevation of 1,200 m and cost US$ 559.2 mn. The tunnel is a part of the 286 km long Jammu-Srinagar National
Highway.
o Bhupen Hazarika Setu: The Bhupen Hazarika Setu Bridge provides 24-hour road connectivity between upper Assam
and the eastern part of Arunachal Pradesh.
o Other projects under implementation include Delhi-Meerut Expressway, Vadodra-Mumbai Expressway, Bangalore-
Chennai Expressway, Eastern and Western Peripheral Expressways. Components under Bharatmala Phase 1 are: 7
 Economic Corridors Development: Length - 9,000 km Investment Outlay: US$ 17.2 bn
 Inter-corridor and feeder roads - Length: 6,000 km Investment Outlay: US$ 11.4 bn
 National Corridors Efficiency Improvements Length - 5,000 km Investment Outlay: US$ 14.3 bn
 Border and International Connectivity Roads: Length - 2,000 km Investment Outlay: US$ 3.6 bn
 Coastal and Port Connectivity Roads Length - 2,000 km Investment Outlay: US$ 2.9 bn
 Expressways Length: 800 km Investment Outlay - US$ 5.7 bn
 National Highways Development Project (NHDP): The Government launched NHDP to upgrade and strengthen National
Highways through various phases of the project. The phase-wide details of NHDP as on 31.05.2017 are as follows:
 The government has taken many e-initiatives such as Project Monitoring Information System (PMIS), INAM-Pro+, Electronic
Toll Collection (ETC) to simplify the processes in the roads and highways sector and bring transparency to it.
 The Ministry of Road Transport and Highways provides financial assistance to states to strengthen the public transport
system in the country. 23 projects in 17 states have been implemented to bring the latest IT related features to the road
transport system in the States.
 Under its Green Initiatives, NHAI planted over 2.5 lakh trees and has also set up a Green Highway Division.
STATISTICS
 Up till November 2018, 5,759 km of highways have been constructed.8
 The number of road accidents has fallen from 480,652 in 2016 to 464,910 in 2017.9
 The number of fatalities has fallen fron 150,785 to 147,913. 10
 More than 61,300 km length of road projects, costing more than US$ 92.7 bn in are progress as of December 2018. 11
 National Highways awarded in 2017-18 stood at 17,055 km, against 15,948 km in 2016 -17.
 Setu Bharatam scheme has been launched to replace Level Crossings on National Highways by Roads Over Bridges (ROBs) or
Roads Under Bridges (RUBs). Under the programme, 174 ROBs/RUBs are to be constructed. Out of these 174, 93 have been
sanctioned at an estimated cost of US$ 1 bn. The 93 ROBs/RUBs that have been sanctioned are at various stages of
progress.12
 30 km of highways are being built on a day basis.13
FDI POLICY
 100% Foreign Direct Investment (FDI) is allowed under the automatic route in the road and highways sector, subject to
applicable laws and regulation.
SECTOR POLICY
 Development and maintenance of road infrastructure is a key Government priority, the sector has received strong
budgetary support over the years.
 Standardised processes for PPP and public funded projects and a clear policy framework relating to bidding and tolling have
been developed over the years.
 Major policy initiatives undertaken by the Ministry of Road Transport and Highways (MoRTH) are:
o Provision of funds to the State Government for development of state roads as per the Central Road Fund Act 2000,
amended by Finance Act from time to time.
o Introduction of Electronic Toll Collection System, FASTag by MoRTH. The success of the initiative can be witnessed
in the increase in user fee collection from US$ 27 million in January’ 2017 to US$ 43 million in November’ 2017. The
penetration during the same period increased from 11.2% to 18.5%.
o Implementation of Value Engineering Programme in 2017 to promote use of new technologies, materials and
equipment in highway projects executed either under PPP or public funding mode.
o Automation of Regional Transport Offices under Transportation Mission Mode Project. It envisages creation of a
consolidated transport database. The two flagship applications under the project are VAHAN (Vehicle Registration,
Taxation, Permit, Fitness and associated services) and SARATHI (Driving License, Learner License, Driving Schools
and related activities).
o To fast track approval process, enhanced powers to NHAI, specifically for EPC (Engineering, Procurement and
Construction) and PPP (Build-Operate-Transfer) projects where no Viability Gap Funding is involved.
o Project Monitoring Information System introduced by NHAI for tracking the status of all projects, preparation of
reports and online upload of important project documents like DPRs and contract documents, etc.
FINANCIAL SUPPORT
MASALA BONDS
The National Highways Authority of India (NHAI) launched Masala Bonds at the London Stock Exchange in May 2017 with the aim of
mobilising funds.
A total of US$ 450.9 mn has been collected by way of Masala Bonds. Asia contributed 60% and Europe contributed 40% to the
subscription.14
Page 23 of 30
HYBRID ANNUITY MODEL  With the ISRO undertaking the development of cutting-edge technologies and interplanetary exploratory missions, there is
To encourage private sector participation, the Ministry of Road Transport and Highways adopted the Hybrid Annuity Model. As per a tremendous scope in contributions to the realization of operational missions and new areas such as satellite navigation.
the model, 40% of the project cost is provided by the Government as ‘construction support’ to the private developer during the TECHNOLOGY TRANSFER
construction period and the balance 60% as annuity payments over the concession period along with interest on outstanding  The technologies licensed to industries for commercialization include Multi-Layer Printed Antenna Technology and DDV 100
amount to the concessionaire. Resin system. In addition to this, industries have been shortlisted for the know-how transfer of Dual Polarization LIDAR,
The model has successfully revived PPPs in the roads and highways sector. 52 NH with a total length of around 3,200 km and having Solid State Power Amplifier, Precision Tapping Attachment and EPY 1061 coating compound. There are several technologies
an investment outlay of around US$ 7.8 bn have been awarded through this model. 15 identified for know-how transfer from ISRO. These include various types of adhesives and polymers, silica fibre and granule
material, ceramics, pressure transducers, liquid level detectors, temperature sensors, silver plating and thermal control
KEY HIGHLIGHTS OF THE UNION BUDGET 2019-20 coating techniques, ground penetration radar, elastic Raman Lidar, Lower Atmospheric Wind Profiling radar etc. As of 2016,
 The union budget allocation towards the Ministry of Road Transport and Highways is US$ 11.9 bn. 16 over 300 technologies have been transferred to Indian industries. The Licensee industries continue to produce and market
The revenue expenditure stands at US$ 1.6 bn and the capital expenditure stands at US$ 10.3 bn. 17 the products licensed by ISRO.4
 The total budget allocation towards the National Highways Authority of India stands at US$ 5.3 bn. 18 TECHNICAL CONSULTANCY
 The total budget allocation towards Road Transport and Safety stands at US$ 40 bn.19  ISRO provides technical consultancy services to industries and R&D institutions in diverse areas of its expertise. Some recent
INVESTMENT OPPORTUNITIES areas where consulting services have been provided are: gold plating application on MMIC-based Ku-band receiver and on
The investment opportunities in the sector include: aluminium boxes, fabrication of precision components, mechanical shock tests, to name a few.
 Project Highways – Construction and Operations & Maintenance: STATISTICS
o New Expressway projects under Bharatmala Pariyojana Project Phase 1:  Space activities in the country were initiated with the setting up of the Indian National Committee for Space Research
 Delhi-Jaipur Expressway (Greenfield – 196 km) (INCOSPAR) in 1962.
 Delhi-Amritsar-Katra Expressway (600 km)  The ISRO was established in August 1969.
 Vadodra-Mumbai Expressway (650 km)  The Government of India constituted the Space Commission and established the Department of Space (DOS) in June 1972
 Hyderabad-Vijayawada-Amravathi Expressway (300 km) and brought ISRO under DOS in September 1972.
 Nagpur-Hyderabad-Bangalore Express way (1,100 km)  Polar Satellite Launch Vehicle (PSLV), in its 21st flight (PSLV-C19), launched India’s first radar imaging Satellite (RISAT-1) from
 Kanpur Lucknow Expressway (75 km) Amravath Ring road/Expressway (186 km) Sriharikota on 26 April 2012. One orbited India’s radar imaging Satellite (RISAT-1) and the other, a French Remote Sensing
 The rise in two-wheeler and four-wheeler vehicles, increasing freight traffic, strong trade and tourist flows between states Satellite SPOT-6 and the Japanese satellite PROITERES. In its 22nd flight (PSLV-C21), PSLV successfully launched the French
are all set to augment growth.20 earth observation satellite SPOT-6, along with Japanese micro-satellite PROITERES from Sriharikota on 09 September 2012.
 Multi-modal logistic parks: 35 Multinodal Logistics Parks have been identified for development in Phase-1 of Bharatmala  India’s heaviest communication satellite, GSAT-10, was successfully launched by Ariane-5 VA 209 from Kourou, French
Pariyojana. Guiana on 29 September 2012.
 Revival of languishing stalled projects: The Ministry has identified 73 projects, which cover 8,187 km, worth an estimated  PSLV, in its 23rd flight (PSLV-C20), successfully launched Indo-French Satellite SARAL along with six smaller foreign satellites
investment of US$ 14.3 bn as Languishing Projects. The reasons for the delay in these projects have been identified and the from Sriharikota on 25 February 2013.
requisite measures are being taken to address the same.  Geosynchronous Satellite Launch Vehicle (GSLV) launched successfully on 08 September 2016 by Indian Space Research
 Toll-Operate-Transfer Model: The Ministry is monetizing road assets constructed using public funds by way of the Toll- Organisation (ISRO). 6 GSAT-18 successfully launched by Ariane-5 VA-231 from Kourou, French Guiana on 06 October 2016.
Operate-Transfer (ToT) scheme. The scheme proposes bidding of bundled national highways for a concession period of 30 6 India successfully launched South Asia Satellite, GSAT-9 on 05 May 2017.5
years.  PSLV C42 successfully launched NovaSAR and S1-4 in sun-synchronous orbit on 16 September 2018. PSLV-C43 successfully
FOREIGN INVESTORS launched HysIS and 30 Satellites on 29 November 2019.
 CIDBI Malaysia (Malaysia)  PSLV-C45 successfully launched EMISAT and 28 international customer satellites on 01 April 2019. 6
 ERA-SIBMOST (Russia)  ISRO has a constellation of nine communication satellites, 1 meteorological satellite, 10 earth observation satellites and one
 Essel Infra & CR-18 Consortium (China) scientific satellite.
 Gamuda Malaysia 0 WCT Malaysia (Malaysia) GROWTH DRIVERS
 GMR-Tuni-Ankapalli Express Ltd (Malaysia) THE INDIAN SPACE RESEARCH ORGANISATION (ISRO)
 Hindustan Construction Company Ltd-Laing Sadbhav Consortium (UK)  The prime objective of ISRO is to develop space technology and its application to various national tasks.
SPACE COMMERCE:
(21) SPACE  Antrix Corporation Limited, the commercial arm of the Department of Space has undertaken many initiatives for the global
SUMMARY marketing of space products and services. Antrix has continued to expand its market base.
 India’s space programme stands out as one of the most cost-effective in the world. India has earned worldwide recognition  There has been good progress in the provision of TTC support to international customers.
for launching lunar probes, built satellites, ferried foreign satellites up and has even succeeded in reaching Mars. 1 LAUNCH VEHICLES
 Indian Space Research Organisation (ISRO) has formal co-operative arrangements in place with 33 countries and three  Satellite Launch Vehicle (SLV): SLV’s first launch took place in 1979 with two more in each subsequent year, and the final
multinational bodies. launch took place in 1982.
 There are 30 spacecrafts placed in differing orbital paths.  Augmented Satellite Launch Vehicle (ASLV): The first launch test was held in 1987, and three others followed in 1988, 1992
 The number of rocket launches undertaken by ISRO during the last three years i.e. 2015, 2016 & 2017 is as follows: and 1994.
o 2015: 5 launches (4 PSLV & 1 GSLV)  Polar Satellite Launch Vehicle (PSLV): PSLV can launch Remote Sensing (IRS) satellites into sun-synchronous orbits. It can
o 2016: 7launches (6 PSLV&1 GSLV) also launch small satellites into geostationary transfer orbit (GTO). The reliability and versatility of the PSLV is proven by the
o 2017: 5 launches (3 PSLV, 1 GSLV & 1 GSLV Mk-III) fact that it has launched 30 spacecrafts (14 Indian and 16 from other countries) into a variety of orbital paths so far.
 From January 2015 till December 2017, a total of 169 foreign satellites from 23 countries were successfully launched  Geosynchronous Satellite Launch Vehicle (GSLV): The Geosynchronous Satellite Launch Vehicle, known by its abbreviation
onboard Polar Satellite Launch Vehicle (PSLV). Revenue earned through these launches was approx. US$ 112.03 mn. 2 GSLV, is an expendable launch system developed to enable India in launching its INSAT-type satellites into geostationary
REASONS TO INVEST orbit and to make India less dependent on foreign rockets. GSLV is ISRO’s heaviest satellite launch vehicle and can put a
 India’s space programme has attracted global attention for its accelerated rate of development. total payload of up to five tonnes to Low Earth Orbit.
 India's PSLV has launched a total of 84 satellites of which 51 are for international customers, during the years 1994-2015.3 SPACE SCIENCE PROGRAMME
 ISRO has forged a strong relationship with many industrial enterprises, both in the public and private sector, to implement  At the ISRO Satellite Center (ISAC), space science research activities are pursued at
its space projects. o Physical Research Laboratory (PRL)
o Space Physics Laboratory (SPL)
Page 24 of 30
 o National Atmospheric Research Laboratory (NARL) PROJECTS
o Special Advisory Group (SAG) PROJECTS
 Many space science research projects in the field of atmospheric science, astronomy and planetary exploration and science  GSLV III
payload development activities are supported and implemented by ISRO through the recommendations of ISRO’s Advisory o GSLV III is designed to launch heavier communication satellites weighing 4500 to 5000 kg, it would also enhance
Committee for Space Sciences (ADCOS). the capability of the country to be a competitive player.
 Mars Orbiter Mission is ISRO’s first interplanetary mission to Mars with a spacecraft designed to orbit Mars in an elliptical o GSLV is designed to put satellites to geosynchronous transfer orbit, an intermediate orbit to which satellites
orbit of 372 kms by 80,000 kms. The primary driving technological objective of the mission is to design and realize a ultimately destined for geostationary are normally taken by launchers.
spacecraft with a capability to reach Mars (Martian Transfer Trajectory), then to orbit around Mars (Mars Orbit Insertion) o On 29 March 2018, India's Geosynchronous Satellite Launch Vehicle (GSLV-F08) successfully launched GSAT-6A
over a period of nine months. As on June 2017, Mars Orbiter Mission completed 1000 Earth days in its orbit.7 Satellite into Geosynchronous Transfer Orbit (GTO). 10
FDI POLICY  Chandrayaan-2
 Foreign Direct Investment (FDI) up to 100% is allowed in satellites-establishment and operation, subject to the sectoral o India second moon mission, launched in 2016-17, has a soft land over a wheeled robotic vehicle to explore the
guidelines of the Department of Space/ISRO, under the government route. landing area. This has three modules namely Orbiter, Lander (Vikram) & Rover (Pragyan).
SECTOR POLICY o The Orbiter and Lander modules will be interfaced mechanically and stacked together as an integrated module and
SATELLITE COMMUNICATION POLICY accommodated inside the GSLV MK-III launch vehicle. The Rover is housed inside the Lander.
 A policy framework for Satellite Communication in India had been approved by Government in 1997. o After launching into earthbound orbit by GSLV MK-III, the integrated module will reach Moon orbit using Orbiter
 The norms, guidelines and procedures for implementation of the Policy Framework for Satellite Communications in India, propulsion module. Lander will separate from the Orbiter and soft land at the predetermined site close to the lunar
approved by the government in the Year 2000. South Pole. The Rover will roll out for carrying out scientific experiments on the lunar surface. Instruments are also
 The INSAT Programme is managed by the INSAT Coordination Committee (ICC) with the technical support of its Technical mounted on Lander and Orbiter for carrying out scientific experiments.
Advisory Group (TAG). All the guidelines regarding the INSAT system shall be determined by the INSAT Coordination o All the modules are getting ready for Chandrayaan-2 launch during the window of 09 July 2019 to 16 July 2019 with
Committee(ICC) keeping in view Policy Framework for Satellite Communications in India. 8 an expected Moon landing on 06 September 2019.11
 In 2011, India adopted the Remote Sensing Data (RSD) Policy. National Remote Sensing Centre (NRSC) of ISRO/ DOS is  India plans to send manned spacecraft to space by 2022 and India will be the fourth country to do this. 12
consigned with the authority to obtain and circulate all satellite remote sensing data in India, both from Indian and foreign  Mars Orbiter Mission: Mars Orbiter Mission has been India's first interplanetary mission to planet Mars with an orbiter craft
satellites. Antrix Corporation Ltd. (of DOS) will be accountable for grant of license for acquisition/ distribution of IRS data designed to orbit Mars in an elliptical orbit. Mars Orbiter Mission (MOM) was launched on 05 November 2013 by PSLV-
outside India. NRSC will uphold a systematic National Remote Sensing Data Archive and a log of all acquisitions of data for C25.13
all satellites.9  Polar Satellite Launch Vehicle (PSLV):
INTERNATIONAL COOPERATION o The PSLV is capable of launching 1600 kg satellites in 620 km sun-synchronous polar orbit s and 1050 kg satellite.
 Formal co-operative arrangements are currently in place with space agencies of 33 countries and three multinational o ISRO’s PSLV, in its 42nd flight, PSLV-C40 successfully launched the 710 kg Cartosat-2 Series Remote Sensing Satellite
bodies, namely, Argentina, Australia, Brazil, Brunei Darussalam, Bulgaria, Canada, Chile, Egypt, European Centre for along with 30 co-passenger satellites on 12 January 2018, from Satish Dhawan Space Centre SHAR, Sriharikota.14
Medium-Range Weather Forecasts (ECMWF), European Organisation for Exploitation of Meteorological Satellites FOREIGN SATELLITES
(EUMETSAT), European Space Agency (ESA), France, Germany, Hungary, Indonesia, Israel, Italy, Japan, Kazakhstan,  PSLV-C30 was successfully launched, carrying six foreign customer satellites (one each from Indonesia and Canada and four
Mauritius, Mongolia, Myanmar, Norway, Peru, Republic of Korea, Russia, Saudi Arabia, Spain, Sweden, Syria, Thailand, the nanosatellites from the USA). PSLV has launched 51 satellites which are for international customers.15
Netherlands, Ukraine, the United Kingdom, the United States of America and Venezuela.  SPOT-7
 The areas of co-operation address mainly remote sensing of the earth, satellite communication, launch services, telemetry o Country: France
and tracking support, space exploration, space law and capacity building. o Mass: 714 kilograms
 Co-operative instruments signed during last year are: o Objective: Earth Observation satellite, like SPOT-6. This will form part of the existing earth observation
1. An implementation arrangement between ISRO and the National Oceanic and Atmospheric Administration (NOAA) constellation.
of the USA for collaboration of OCEANSAT-2 activities.  NLS.1 & NLS7.2
2. Implementing arrangement between ISRO and the National Aeronautics and Space Administration (NASA) of USA o Country: Canada
for the collaboration of OCEANSAT-2 activities. o Mass: 15 kilograms
3. Implementing arrangements between ISRO and NASA for co-operation on Global Precipitation Measurement and o Objective: Experiments on formation, flying of two satellites which are very near to each other in orbit, using GPS.
Megha-Tropiques.  VELOX-1
4. Memorandum of Understanding between India and Australia concerning co-operation in Civil Space Science, o Country: Singapore
Technology and Education. o Mass: 7 kilograms
5. Cooperation Agreement among ISRO, CNES and EUMETSAT concerning the use of Near Real-Time Megha- o Objective: Experiments technology demonstration of satellite-based cameras and associated systems.
Tropiques data.  AISAT
 ISRO and the French National Space Agency (CNES) have worked in synergy to make available data products from Indo- o Country: Germany
French Megha-Tropiques satellite to the global scientific community for validation activities. o Mass: 14 kilograms
 India-USA space cooperation made significant progress during last year and several follow-up actions of the third meeting of o Objective: A global sea-traffic monitoring system.
India-USA Joint Working Group on Civil Space Cooperation held at Bangalore in July 2011 were actively pursued. (22) TEXTILES AND GARMENTS
 The wind products derived from OCEANSAT-2 Scatterometer are disseminated globally since October 2012 for operational SUMMARY
global applications through an arrangement with EUMETSAT.  The Textile industry in India is one of the largest in the world with a large raw material base and manufacturing strength
 The processed data from meteorological satellites of other nations are made available by EUMETSAT to Indian scientific across the value chain.
community through a system called ‘EUMETCast’.  India is:
 ISRO and the Canadian Space Agency (CSA) are working on the development of the Ultraviolet Imaging Telescope (UVIT) o The largest producer of cotton in the world
planned on ISRO’s multi-wavelength astronomy satellite ASTROSAT. o The second largest exporter of cotton in the world
 ISRO continues to share its facilities, expertise and services in the application of space technology through hosting of United o Leading consumer of cotton
Nations (UN) affiliated Centre for Space Science and Technology Education in Asia and the Pacific (CSSTE-AP). As of now, o The second largest producer of silk in the world
there are more than 1100 beneficiaries from 52 countries.  India is a global leader in jute production, accounting for about 70% of estimated world production. 1
 ISRO, on behalf of India, continues to play an active role in the deliberation of the United Nations Committee on Peaceful
Uses of Outer Space (UN-COPUOS).
Page 25 of 30
  The total number of looms installed in jute industry was 48,322, as on 01 January 2018. The installed spindles in jute mills
other than 100 % export oriented units were 7,48,612. The maximum installed capacity in jute mills other than 100% export
oriented is about 2.75 mn tonnes annually. 2
 The Textile industry in India is one of the largest sources of employment generation in the country with more than 45 mn
people employed directly in 2017-18.
 The Textile industry in India is dominated by 70% of women workforce and balance male workforce.
 The industry contributes to 7% of industrial output in value terms, 2% of India’s GDP and 15% of the country’s export
earnings.3
REASONS TO INVEST
 Investments opportunities in India in many areas are enormous. Regional Comprehensive Economic Partnership, or RCEP, is
an ambitious free trade agreement (FTA) connecting countries for more business and tourism prospects. FTAs provide an
entry to these manufacturing nations for the development and investment in the industry. 4
 The 7th Regional Comprehensive Economic Partnership (RCEP) Intersessional Ministerial Meeting took place in Siem Reap,
Cambodia on 02 March 2019. The participating countries of the RCEP are the 10 ASEAN member states and those countries
which have existing FTAs with ASEAN – Australia, China, India, Japan, Republic of Korea and New Zealand.5
 The Indian market has favourable demographics, rising income levels and brand as well as quality oriented customers.
 The following government policies are favourable which provide attractive incentives to the manufacturers:
o Amended Technology Upgradation Fund Scheme (ATUFS)
o Scheme for Integrated Textile Parks (SITP)
o Integrated Skill Development Scheme (ISDS)
o Technology Mission on Technical Textiles (TMTT)
o Swarnjayanti Gram Swarozgar Yojana (SGSY)
o Integrated Processing Development Scheme (IPDS)
o Merchandise Exports from India Scheme (MEIS)
o Market Development Assistance (MDA)
o Market Access Initiative (MAI) 6
 An abundance of raw materials such as cotton, wool, silk, jute and manmade fibres.
 There is a comparative advantage seen in terms of skilled manpower and production cost over the majority of textile
producers globally.
 India’s policies are focused and promising, which give a boost to the overall textile market.
 India’s value chain starting from production of natural fibre to the production of yarn, fabric and apparel gives India an edge
over other countries.
 India also sees a tremendous amount of skills in the traditional skill sector like handloom and handicraft.
 The Government of India announced a Special Package to create 10 mn job opportunities and boost textile exports by US$
31 bn, attracting investments worth US$ 11.93 bn during 2018-2020.7
STATISTICS
 The Textiles industry in India is estimated at around US$ 150 bn and is expected to reach US$ 250 bn during 2019.8
 India has the largest acreage with 12.2 mn hectares under cotton cultivation, which is around 42% of the world area of 29.3
mn hectares.
 India produced an estimated 6.5 mn tonnes during 2017-18.
 India's overall textile exports have been US$ 31.65 bn in FY19 and are expected to increase to US$ 82.00 bn by 2021. 9
 The production of raw cotton in India is estimated to have reached 36.1 mn bales in FY19. 10
FDI POLICY
 100% FDI is allowed under the automatic route in the Textile Industry in India.
SECTOR POLICY
PROVISIONS OF BUDGET 2019-20
 The allocation to the Ministry of Textiles for 2019-20 is US$ 830 mn approx.11
FINANCIAL SUPPORT
JUTE-SMART:
 Jute-Smart is an e-Governance Initiative for Procurement.
 The JUTE-SMART software has become operative since 01 November 2016. Indents for a total quantity of around 3.85 mn
bales, worth US$ 1.32 bn, have already been placed through JUTE-SMART, from the month of November 2016 to March
2018.12
UPGRADATION FUND SCHEME:
 There is a provision of one-time capital subsidy for eligible benchmarked machinery for the following:
o For garments and technical textiles segments, at the rate of 15%, with a cap of US$ 4.6 mn
o For weaving, processing, jute, silk and handloom segments, at the rate of 10%, with a cap of US$ 3 mn
 An outlay of US$ 2.7 bn has been approved for seven years to meet the committed liabilities of US$ 1.9 bn and US$ 800 mn
for new cases under ATUFS.
INTEGRATED SKILL DEVELOPMENT SCHEME:
 The Ministry of Textiles is implementing the Integrated Processing Development Scheme (IPDS) to enable the textile
processing sector in meeting environmental standards. This will be achieved through appropriate technology including
marine, riverine and Zero Liquid Discharge (ZLD).
 The Government of India provides financial assistance up to 50% of project cost for Common Effluent Treatment Plants
(CETPs) subject to a ceiling of US$ 11.5 mn. The ministry has approved 4 projects in Rajasthan and 2 projects in Tamil Nadu.
INTEGRATED SCHEME FOR DEVELOPMENT OF SILK INDUSTRY:
 Integrated Scheme for Development of Silk Industry is implemented with an outlay of US$ 300 mn from 2017-18 to 2019-20.
The Scheme has 4 components:
o Research & Development (R&D), training, transfer of technology and IT initiatives
o Seed organizations and farmers’ extension centres
o Coordination and market development for seed, yarn and silk products
o Quality Certification System (QCS) by creating amongst others a chain of silk testing facilities. 13
INFRASTRUCTURE DEVELOPMENT SCHEMES
 Scheme for Integrated Textile Park (SITP)
 Integrated Processing Development Scheme
 Mega Textile Clusters Scheme
INVESTMENT OPPORTUNITIES
 The Textile industry in India has a robust presence in the entire value chain.
 All levels of textile value chain i.e. from fibre/ filament to garment/speciality fabrics manufacturing at large scale are
available.
 India has an extensive custom of textile and apparel manufacturing with infrastructure spread across the country in
numerous clusters.
 Fabric processing set-ups are for all kind of natural, synthetic and speciality textiles.
 Opportunities for investments in retail brands are immense.
KEY ACHIEVEMENTS
 India reported a growth of 5.37% with exports increasing from US$ 35.52 bn in Jan-Dec 2016 to US$ 37.43 bn in Jan-Dec
2017.14
 The Textiles industry in India (including dyed and printed) attracted Foreign Direct Investment (FDI) worth US$ 3.12 bn from
April 2000 to March 2019. 15
 Apparel and garment manufacturing centres have been set up in the north-eastern region.
 Integrated Textile Office Complex set up at the Indian Institute of Handloom Technology (IIHT) in Varanasi
 India Handloom brand has been launched by the Hon’ble Prime Minister of India on the occasion of the first National
Handloom Day on 07 August 2015.16
 Special Textile Package of US$ 850 mn is approved, to attract investment of US$ 11 bn and to create 10 mn jobs
 Overall 11,14,545 persons were trained under the Skill Development, mainly in apparel and garment (86%), of which
8,43,082 persons (75.64%) were given employment in the textile sector.17
(23) THERMAL POWER
SUMMARY
 Global proven crude oil reserves are estimated at 1697 bn barrels, proven natural gas at 193 tn cubic meters, and proven
coal at 1,035 bn tonnes.1
 Total Coal reserves in India is estimated to be 319.02 bn tonnes, out of which 148.79 bn tonnes are proven reserves. Proven
natural gas reserve measures up to 1339.57 bn cubic meter (BCM), as reported in March 2018. 2
 India is the third largest producer of electricity and consumer of energy. 3
REASONS TO INVEST
 The Government has set an electricity generation target of conventional sources, for 2018-19, at 1265 bn units (BU). This is
comprised of:
o 1091.5 BU thermal
o 130 BU hydro
o 38.5 BU nuclear
o 5 BU import from Bhutan4
 The revised Tariff Policy 2016 ensures an adequate return on investment to companies engaged in power generation,
transmission and distribution. It also ensures the financial viability of the industry to attract investments by companies.
 Government of India, through the Ministry of Power, launched the initiative of Ultra Mega Power Projects (UMPPs) in 2005.
It comprises of 4,000 MW super thermal power projects (both pit head and imported coal-based) with the objective to
develop large capacity power projects in India. Power Finance Corporation Ltd (PFC) was appointed as the nodal agency to
facilitate the development of these projects. Various inputs for the UMPPs are tied up by the Special Purpose Vehicle (SPV)
with the assistance of the Ministry of Power and Central Electricity Authority (CEA). CEA is involved in the selection of sites
for these UMPPs.
Page 26 of 30
  The Ministry of Power has brought the guidelines for determination of tariff through a transparent process of bidding for
procurement of power from UMPPs based on allocated domestic captive coal blocks and to be set up on Build, Own and
Operate (BOO) basis.
 UMPPs projects in the pipeline:5
o Husainabad in Deoghar district in Jharkhand
o Bijoypatna in Chandbali Tehsil of Bhadrak District, Narla & Kasinga sub-division of Kalahandi District in Odisha
o Kakwara in Banka Distt in Bihar
o Niddodi village in Karnataka
o Sites in Tamil Nadu and Gujarat for their second UMPPs and a site in Uttar Pradesh are being examined
STATISTICS
 With a production of 1497 Tera Watt-hour (TWh), India is the world’s third largest producer of electricity.6 India is also the third largest
consumer of energy.7
 The Power industry accounts for almost a quarter of the projected investments amongst all the infrastructure industries between 2012-
17.
 FDI in the Power industry between April 2000 to March 2019 stood at US$ 14.32 bn.8Electricity generation installed capacity increased by
39.2% from 248.5 GW on March 2014 to 346 GW on October 2018.9
 Total thermal installed capacity accounted for 222.92 GW, which is 63.7% of total installed capacity till February 2019.10
GROWTH DRIVERS
 Expansion in industrial activity to boost demand for electricity.
 A growing urban and rural population is likely to boost demand for energy.
 Increasing market penetration and per-capita usage are expected to provide further impetus to the energy industry.
 Ambitious projects and increasing investments across the value chain in various sectors with high electricity demand.
FDI POLICY
 Under the automatic route, 100% Foreign Direct Investment (FDI) is allowed in the Power industry for generation from all
sources (except atomic energy), transmission and distribution of electric energy and power trading, subject to all the
applicable regulations and laws.
 FDI in power exchanges up to 49% registered under Central Electricity Regulatory Commission (Power industry) Regulations,
2010 under the automatic route, subject to the following conditions, as laid down in the Policy:
o Foreign Institutional Investors (FII)/ Foreign Portfolio Investors (FPI) purchases shall be restricted to secondary
market only
o No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in these
companies
o The foreign investment will have to comply with the Securities & Exchange Board of India (SEBI) regulations and the
applicable laws/regulations, security and other conditions
SECTOR POLICY
ELECTRICITY ACT, 2003
 Elimination of licensing for electricity generation projects
 Increased competition through international competitive bidding
 Demarcation of transmission as a separate activity
NATIONAL TARIFF POLICY, 2006
Revised Tariff Policy, 2016:
 Ensure the availability of electricity to consumers at reasonable and competitive rates
 Ensure financial viability of the sector and attract investments Promote transparency, consistency and predictability in regulatory
approaches across jurisdictions and minimize perceptions of regulatory risks
 Promote competition, efficiency in operations and improvement in the quality of supply
 Promote the generation of electricity from renewable sources
 Promote hydroelectric power generation including Pumped Storage Projects (PSP) to provide adequate peaking reserves, reliable grid
operation and integration of variable renewable energy sources
 Evolve a dynamic and robust electricity infrastructure for better consumer services
 Facilitate the supply of adequate and uninterrupted power to all categories of consumers
 Ensure creation of adequate capacity including reserves in the generation, transmission and distribution in advance, for the reliability of
supply of electricity to consumers.
ULTRA MEGA POWER PROJECTS (UMPPS)
 Govt. of India undertook the initiative for setting up of Ultra Mega Power Projects of 4 GW capacity each, to reap the benefits of
economies of scale, and provide fast capacity addition. The Ministry of Power identified Power Finance Corporation (PFC) as the nodal
agency for the UMPPs. To enhance investors' confidence, reduce risk perception and get a good response to competitive bidding, PFC
incorporated Special Purpose Vehicles (SPVs) for each UMPP. The SPVs take up the bidding process on behalf of the power procuring
(beneficiary) states. The purpose of the SPVs is to carry out the bid process management and obtain various clearances/consents for the
projects. Thus, the same is transferred to the successful bidder along with the SPV, who are selected through the tariff based
International Competitive Bidding (ICB). The logistic support provided by the SPV, prior to award of the project, is considered necessary -
to enhance the investor’s confidence, reduce risk perception and get a good response to the competitive bidding process. Based on the
above initiative of Government of India and its implementation process, four UMPPs -Sasan in Madhya Pradesh, Mundra in Gujarat,
Krishnapatnam in Andhra Pradesh and Tilaiya in Jharkhand - were awarded to the successful bidders. Mundra UMPP and Sasan UMPP are
fully commissioned and are generating electricity.
RENOVATION & MODERNIZATION OF DISTRIBUTION SYSTEM
Government of India launched two schemes, namely, Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power
Development Scheme (IPDS) in December 2014. It provides capital subsidy to the States for strengthening of sub-transmission and
distribution networks in rural areas and urban areas. Under DDUGJY scheme, a capital subsidy is being provided for feeder
separation, electrification of unelectrified villages and households, metering and system strengthening & augmentation of the
distribution system in rural areas. The erstwhile scheme of RGGVY was subsumed in DDUGJY as a separate component for rural
electrification in the country. Under the IPDS Scheme, a capital subsidy is provided for strengthening and augmentation of the
distribution system. A capital subsidy is also provided for metering of distribution transformers/feeders/consumers, and IT
enablement in the distribution sector in the urban areas. The erstwhile Restructured Accelerated Power Development and Reform
Programme (R-APDRP) scheme was subsumed in the IPDS as a separate component for IT enablement and system strengthening.
DOMESTIC AND STREET LED LIGHTING PROGRAM
The Ministry of Power has launched UJALA (Unnat Jyoti by Affordable LED for All) scheme for replacement of 770 mn incandescent
domestic bulbs with energy efficient LED bulbs in the country. In addition, 35 mn street lightings are also being replaced with energy
efficient LED street lights in the country.
FUEL SUPPLY AGREEMENT
 The Fuel Supply Agreement with Coal India Ltd. will ensure the availability of coal for power companies over the long term.
PUBLIC-PRIVATE PARTNERSHIP(PPP)
 To reduce dependency on imported coal, a PPP policy framework is planned to be devised with Coal India Ltd. to increase
coal production.
NATIONAL ELECTRICITY POLICY
The Government of India is planning to revise the National Electricity Policy to bring out far-reaching changes in the Power industry.
This includes ensuring a cleaner atmosphere by increasing renewable generation including rooftop solar PV generation, increasing
electric vehicles in cities and towns, improved power supply reliability to consumers through the smart grid. This policy would also
encourage efficient utilization of resources including land and water.
UJWAL DISCOM ASSURANCE YOJANA (UDAY)
The Scheme "UDAY" (Ujwal DISCOM Assurance Yojana) was formulated and launched by the Government in November 2015, for the financial and
operational turnaround of State-owned DISCOMs (Electricity Distribution Companies). The scheme UDAY envisages reform measures in all sectors –
generation, transmission, distribution, coal, and energy efficiency. The scheme aims to reduce interest burden, reduce the cost of power, reduce
power losses in distribution and improve the operational efficiency of DISCOMs. The scheme also incentivizes the States by
 Exempting State takeover of DISCOM debts from Fiscal Responsibility & Budget Management (FRBM) limits for two years
 Increased supply of domestic coal
 Coal linkage rationalization
 Liberally allowing coal swaps from inefficient to efficient plants
 Allocation of coal linkages to States at notified prices and additional/priority funding in schemes of the Ministry of Power and the Ministry
of New & Renewable Energy, if they meet the operational milestones in the scheme.
The scheme also envisages that the States accepting UDAY and performing as per operational milestones will be given additional/priority funding
through DDUGJY, IPDS and Power System Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and
Renewable Energy. These States shall also be supported with additional coal at notified prices and, in case of availability through higher capacity
utilization. The States not meeting operational milestones will be liable to forfeit their claim on IPDS and DDUGJY grants.
FINANCIAL SUPPORT
BUDGET INCENTIVES
 Extension of sunset date under section 80 IA (4) (iv) of the Income Tax Act, for the power sector (generation, distribution and
transmission) to 31 March 2017, for claiming a deduction of 100% of profits and gains for 10 consecutive assessment years.
 Adequate quantity of coal will be provided to power plants which are already commissioned or are to be commissioned by March 2015.
 Allocation of US$ 15.38 mn for preparatory work for a new scheme creating ultra-modern supercritical coal-based thermal power
technology aimed at providing cleaner and efficient thermal power. Deen Dayal Upadhyaya Gram Jyoti Yojana was allocated US$ 581 mn
to in 2019-20 Interim Budget.11
 Full exemption from central excise duty is provided to liquefied propane mixture, liquefied propane, liquefied butane and liquefied
petroleum gases for supply to non-domestic exempted category customers retrospectively from February 2013 onwards. The companies
that executed this exemption are Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) or Bharat
Petroleum Corporation Limited (BPCL).
 The duty structure on non-agglomerated coal of various types is rationalized at 2.5% Basic Customs Duty (BCD) and 2% Countervailing
Duty (CVD). The BCD on anthracite coal and other coal is reduced from 5% to 2.5%.
 The CVD on anthracite coal, coking coal and other coal is reduced from 6% to 2%.
 Imports of liquefied propane mixture, liquefied propane, liquefied butane and liquefied petroleum gases for supply to non-domestic
exempted category customers by the IOCL, HPCL or BPCL retrospectively from February 2013.
TAX INCENTIVES R&D INCENTIVES
 Industries and infrastructure sectors including the power/energy efficiency sectors with in-house R&D centers get a write-
off in revenues and capital expenditure incurred on R&D.
Page 27 of 30
  A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act to industry/private sponsored research 1. Separation of agriculture and non-agriculture feeders
programmes. 2. Strengthening and augmentation of sub-transmission and distribution systems including metering
 A weighted deduction of 200% is granted to assesses for any sums paid to a national laboratory, university or institute of 3. Rural electrification including off-grid solutions
technology, or specified people with a specific direction. The said sum will be used for scientific research within a  Objectives
programme approved by the prescribed authority. 1. Electrification of 18452 un-electrified villages by 01 May 2018
STATE INCENTIVES 2. Providing electricity access to 50 mn households
 India offers additional incentives for industrial projects in certain states.  Investment Opportunities
 Incentives are in areas such as rebates in land cost, the relaxation of stamp duty exemption on the sale and lease of land, Total Outlay: US$ 11.67 bn
power tariff incentives, a concessional rate of interest on loans, investment subsidies, tax incentives, backward area 1. System Strengthening:
subsidies and special incentive packages for mega projects. Power Transformers: 14,491 nos
AREA BASED INCENTIVES Distribution Transformers: 317,068 nos
 Incentives are available for the setting up of projects in special areas like the North-east, Jammu & Kashmir, Himachal Conductors: 869,521 km
Pradesh, and Uttarakhand. Energy Meters: 11 mn nos
INVESTMENT OPPORTUNITIES 2. Metering the un-metered
THERMAL POWER PROJECTS Feeder/Boundary/ DTs: 1.19 mn nos
Energy Meters: 9.99 mn nos
INTEGRATED POWER DEVELOPMENT SCHEME
Total outlay: US$ 11.78 bn with gross budgetary support of US$7.39 bn from Government of India (including erstwhile R-APDRP)
 Components
1. Strengthening of sub-transmission and distribution networks in the urban areas
2. Metering of distribution transformers/feeders/ consumers in the urban areas.
3. IT enablement of the distribution sector and strengthening of distribution network under R-APDRP.
 Investment opportunities
1. Metering: US$ 317.07 mn; Sub Stations (New + Augmentation): US$ 592.61 mn; HT / LT Lines (New + Augmentation): US$ 1.27 bn;
DTs (New + Augmentation): US$ 495.23 mn; UG Cabling (HT & LT): US$ 339.87 mn; Rooftop Solar / net metering: US$ 36.30 mn;
Misc. (ABC cable, R&M, Capacitor etc): US$ 696.76 mn.
(24) TOURISM AND HOSPITALITY
SUMMARY
 The Tourism and Hospitality industry in India is one of the largest service industries. Tourism is an integral pillar of the Make
in India programme.
 India is the 8th largest country in terms of contribution to travel & tourism GDP. 1
 The Tourism industry in India generated US$ 247.3 bn showing a growth of 6.7% during the year 2018, accounting for 9.2%
of the total economy.2
HYDRO ELECTRIC PROJECTS  In 2017, the total number of domestic tourist visits (DTVs) to states and Union Territories stood at 1652.5 mn. About 10 mn
foreign tourist arrivals have been recorded in 2017. The contribution to employment, by the Tourism industry in India, has
been 42.7 mn jobs in 2018.3
 The World Heritage List has 36 sites inscribed which include 28 cultural, 7 natural and 1 mixed category site. There are 3686
monuments/sites under the protection of the Archaeological Survey of India (ASI). 4
REASONS TO INVEST
 The Tourism industry in India accounted for 9.2% of the Gross Domestic Product (GDP) in 2018. India is the third largest
foreign exchange earner for the country. The Foreign Exchange Earnings (FEE), from the Tourism industry in India, stood at
US$28.9 bn in 2018. In 2018, 2.37 mn foreign tourists availed the E-Visa facility which represents a 39.4% increase over
2017.5
 Globally, India is also the 3rd largest in terms of investment in travel & tourism with an investment of US$ 45.7 bn in 2018. 6
 India has a diverse portfolio of niche tourism products which includes cruises, adventure, medical, wellness, sports such as
Golf and Polo, MICE (meetings, incentives, conferencing, exhibitions), eco-tourism, film, rural and religious tourism.
 Hotels with a project cost of US$ 29.85 mn or above are already included in the Harmonized Master List (HML) of
Infrastructure. The MOF (Ministry of Finance) is constantly being pursued for the inclusion of Hotels with a project cost of
US$ 3.7 mn to US$ 29.85 mn in the HML.7
 The centrally funded scheme of Swadesh Darshan and Pilgrimage Rejuvenation and Spirituality Augmentation Drive
(PRASAD) provide for introducing suitable Public Private Partnership (PPP) for improved sustainability of the projects.
Viability Gap Funding may be provided under the schemes in accordance with the relevant guidelines/instructions of the
Government.
STATISTICS
 The Tourism and hospitality industry in India is an employment generating industry and every US$1 mn invested in tourism
creates 78 jobs.
 The Tourism industry in India is the 3rd largest foreign exchange earner after gems, jewellery and readymade garments.
 India ranks 14th in terms of absolute Foreign Exchange Earnings (FEE) and 122nd in terms of share of visitor exports in total
DEENDAYAL UPADHAYA GRAM JYOTI YOJANA (DDUGJY) export.8
 Components
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  India registered 10.04 mn Foreign Tourist Arrivals (FTAs) in 2017, registering an annual growth of 14%. The number of
domestic tourist visits in India during 2017 was 1652.49 mn, registering a growth rate of 2.3%. 9
GROWTH DRIVERS
 The Government of India has recently been focusing upon fast-track infrastructure development and promoting tourism
digitally.
 Sustained efforts have led to a jump of 25 places in World Economic Forum Travel & Tourism Competitiveness Index ranking
between 2013 and 2017.10
 The key initiatives undertaken are:
o E-Visa facility extended to 166 countries for visit to India through 28 international airports and 5 sea airports.
o Undertaken promotional activities such as Incredible India 2.0 campaign and India Tourism Mart in 2018.
o 15 circuits on specific themes have been identified for development under the Swadesh Darshan scheme. During
2018-19, a total of 7 projects worth US$ 55 mn were sanctioned under the scheme.
o 25 religious sites have been identified for development under the PRASAD scheme. The Ministry has released US$
12 mn for the projects sanctioned under PRASHAD till 31 March 2018.11
o India’s first ‘Adventure Tourism Guidelines’ launched covering 29 land, air and water-based activities.
o ‘Swachh Paryatan Mobile App’ & 24x7 Tourist Helpline launched in 12 international languages.
o The Ministry of Tourism has been complemented by progressive initiatives by other ministries, such as UDAN
scheme by the Ministry of Civil Aviation, tourist trains by the Ministry of Railways, Sagarmala project and
development of lighthouses by the Ministry of Shipping.
o The traditional themes of culture & heritage, religious and nature-based Tourism are still the frontrunners shaping
the inbound tourism landscape in India. Rich history & vibrant culture, deeply entrenched faith in religion and
unparalleled diversity in natural resources present a distinct advantage to India.12
o Availability of medical experts offering speciality treatment, advanced equipment and low cost have positioned
India as a preferred medical tourism destination in several international markets.
o Adventure tourism is another rapidly growing segment which has a tremendous potential based on the diverse
natural landscape on offer in India.13
FDI POLICY
 100% FDI is allowed under the automatic route in the Tourism and hospitality industry in India, subject to applicable
regulations and laws.
 100% FDI allowed in tourism construction projects, including the development of hotels, resorts and recreational facilities.
SECTOR POLICY
NATIONAL TOURISM POLICY
 A National Tourism Policy was formulated in 2002. However, considering the widespread interrelated global advancements,
a new draft National Tourism Policy has been formulated, which is yet to be approved and has the following salient
features:14
o The focus of the Policy is on employment generation and community participation.
o Stress on the development of tourism in a sustainable and responsible manner.
o An all-encompassing Policy involving linkages with various Ministries, Departments, States/Union Territories and
Stakeholders.
o The Policy enshrines the vision of developing and positioning India as a “MUST EXPERIENCE” and “MUST RE-VISIT”
destination for global travellers, whilst encouraging Indians to explore their own country.
o To develop and promote varied tourism products including the rich culture and heritage of the country, as well as
niche products such as medical &wellness, MICE (meetings, incentives, conferences and exhibitions, Adventure,
Wildlife and so on.
o Development of core infrastructure (airways, railways, roadways, waterways, etc.) as well as Tourism
Infrastructure.
o Developing quality human resources in the Tourism and Hospitality industry in India, across the spectrum of
vocational to professional skills development and opportunity creation.
o Creating and enabling an environment for investment in tourism and tourism-related infrastructure.
o Emphasis on technology-enabled development in tourism.
o Focus on domestic tourism as a major driver of tourism growth.15
FINANCIAL SUPPORT
KEY PROVISIONS OF BUDGET:
 To develop and enhance tourist infrastructure a provision of US$ 158 mn is made for developing Swadesh Darshan.16 States
have been given greater flexibility in the development of Tourist infrastructure as per local requirement from their
enhanced resources
 A host of benefits have been provided under the GST regime. Extremely low taxes on food and hotel rooms have been very
beneficial. GST is proving to be a major benefit for the tourism and hospitality industry. The process to claim and avail ITC
(input tax credit) is simple and clear.17
 Resources to be provided to start work along landscape restoration, signage and interpretation centres, parking, access for
the differently abled, visitors amenities, including securities and toilets, illumination and plans for benefiting communities
around them at various heritage sites which include Churches & Convents of Old Goa, Hampi, Karnataka, Elephanta Caves,
Mumbai, Kumbalgarh and other hill forts of Rajasthan, Rani ki Vav, Patan, Gujarat, Leh Palace, Ladakh, J&K, Varanasi Temple
town, UP, Jalianwala Bagh, Amritsar, Punjab and Qutub Shahi Tombs, Hyderabad, Telangana
 The e-Tourist Visa facility has now been increased for travellers of 166 countries.18
TAX INCENTIVES:
 An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new hotels in the 2-
star category and above across India, thus permitting a 100% deduction in respect of the whole or any expenditure of a
capital nature excluding land, goodwill and financial instruments incurred.
STATE INCENTIVES:
 Incentives offered by state governments include subsidised land cost, relaxation in stamp duty, exemption on sale/lease of
land, power tariff incentives, concessional rate of interest on loans, investment subsidies/tax incentives, backward areas
subsidies and special incentive packages for mega projects.
 Incentives are provided for setting up projects in special areas – the North-east, Jammu & Kashmir, Himachal Pradesh and
Uttarakhand.
INCENTIVES FROM THE MINISTRY OF TOURISM:
 Assistance in large revenue-generating projects
 Support for Public-Private Partnerships (PPPs) in infrastructure development such as viability gap funding
 Schemes for capacity-building of service providers
INVESTMENT OPPORTUNITIES
TOURISM:
 The presence of world-class hospitals and skilled medical professionals make India a preferred destination for medical
tourism.
 As an opportunity for cruise owners and operators by capturing/capitalizing the opportunity from a vast beautiful coast line,
vast forest and undisturbed idyllic islands.
 Rural tourism is mainly promoted by the Incredible India 2.0 Campaign.19
 The Ministry of Tourism has sanctioned Rural Tourism projects at 185 sites in several states/union territory administrations
up to 31 March 2012.20
 Under Swadesh Darshan Scheme, Ministry of Tourism identified Rural & Coastal Circuits as one of the thematic circuits for
development.
 Eco-tourism is at a nascent stage, but there are conscious efforts to save the fragile Himalayan eco-system and the culture
and heritage of indigenous people.
 The Tourism and hospitality industry in India offers opportunities across various sub-segments such as timeshare resorts,
convention centres, motels, heritage hotels and the like. Investment opportunities in the setting up of tour operations and
travel agencies cater to burgeoning tourist inflow.
KEY ACHIEVEMENTS
 Swadesh Darshan launched - 15 theme-based tourist circuits identified, 5 pan-India mega circuits identified, 77 projects
worth US$ 880 mn underway.22
 PRASAD launched – 41 sites in 25 states identified, 24 projects worth US$ 104 mn underway.23
(25) WELLNESS
SUMMARY
 Second largest exporter of Ayurvedic and alternative medicine in the world.
 INR 490 Billion wellness market.
 6200 indigenous herbal plants.
 During 2014-15, the Indian wellness industry was estimated at USD 13 billion.
 Potential to generate three million job opportunities.
 The country has developed vast AYUSH infrastructure comprising of 736,538 registered practitioners.
REASONS TO INVEST
 India has an unmatched heritage represented by its ancient systems of medicine which are a treasure house of knowledge
for both preventive and curative healthcare.
 The demand for Ayurveda, Yoga, Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) and herbal products is surging in
India and abroad. India is the second largest exporter of AYUSH and herbal products.
 Indian systems of medicine and homoeopathy particularly Ayurveda and Yoga are widely recognised for their holistic
approach to health and capability for meeting emerging health challenges. These systems are playing an important role in
achieving the national health outcome goals of reducing Maternal Mortality Rate (MMR), Infant Mortality Rate (IMR),
malnutrition and anemia.
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  The country has developed vast AYUSH infrastructure comprising of 686,319 registered practitioners, 26,107 dispensaries  The National Rural Health Mission has a declared policy of promoting ‘Pluralistic Healthcare’ by involving, alongside the
and 3167 hospitals in public sector, 501 undergraduate colleges with annual intake of 28,018 students, 151 centres for post- allopathic system, the AYUSH systems, including local health traditions in its operational mission.
graduate education with annual admission of 3504 scholars and 8896 licensed drug manufacturing units.  The National Policy on Indian Systems of Medicine & Homoeopathy – 2002.
 India also has a vast infrastructure with a dedicated Central Council of Indian Medicine, Central Councils of Homoeopathy  Evidence-based centres are to be set up by the All India Institute of Medical Sciences. These centres will also be instated in
(Regulatory Councils) and five Central Councils for Research, one for each AYUSH system. There are seven National government hospitals.
Institutes (two for Ayurveda and one each for other systems), two North-eastern institutes to cater to needs of a specific  Central Sector Scheme for in-situ & ex-situ conversation efforts of medicinal plants and National AYUSH Mission of
area, two Pharmacopoeia Laboratories, one Pharmacopoeia Commission for Indian Medicine, a National Medicinal Plants medicinal plants for promoting medicinal plants cultivation to help ensure assured raw material supply.
Board and a public sector undertaking for manufacture of standardised Ayurvedic and Unani medicine.  The establishment of a North-eastern Institute of Ayurveda and Homoeopathy at Shillong, Meghalaya and the North-
 Investors and corporate houses are increasingly investing in AYUSH sector. eastern Institute of Folk Medicine at Passighat.
 India has a vast reservoir of natural flora and fauna and also ancient texts and knowledge that have made it an authority in  Central Sector Sceme for promotion of International Cooperation in AYUSH for providing incentives for the promotion of
the field of AYUSH. AYUSH abroad.
 Ayurveda has a unique therapy called Panchkarma which is beneficial for preventive/promotive health and also for FINANCIAL SUPPORT
treatment of many chronic lifestyle disorders.  A scheme has been envisaged for the development of AYUSH clusters, for creating a Common Facility Centre for standardisation, quality
 Yoga is widely recognised and practiced in Asian as well as western countries. Several yoga centres/studios have been assurance and control, productivity, marketing, infrastructure and capacity-building through a cluster-based approach.
established across the globe during the last 4-5 decades.  Central Sector Scheme for promotion of international cooperation in AYUSH which provides for international exchange of experts and
 Yoga is a drugless system and can be applied as independent modality or as an add-on therapy with other systems. The officers, incentive to drug manufacturers, entrepreneurs, AYUSH institutions etc. for international propagation of AYUSH by participating
classical methods of yoga originated and propagated in India has its own advantages. in international exhibitions, trade fairs, road shows etc. and registration of AYUSH products (Market Authorisation) at regulatory bodies of
different countries such as USFDA/EMEA/UK-MHRA/NHPD/TGA etc. for exports, support for international market development and
 The ancient Indian texts have defined the concepts of do’s and don’ts related to dietics, conduct, activities etc. which are
AYUSH promotion-related activites, translation and publication of AYUSH literature/books in foreign languages.
used as natural modalities for prevention of diseases and restoration of health.
 A centrally-sponsored scheme has been set up for specialised AYUSH facilities in government tertiary care as well as AYUSH hospitals in
STATISTICS PPP mode.
 India’s wellness market is estimated at INR 490 Billion, and wellness services alone comprise 40% of the market.  The Central Sector Scheme to provide support for Conservation, Development and Sustainable Management of Medicinal plants aims at
 The AYUSH sector has an annual turnover of around INR 120 Billion. The sector is dominated by micro, small and medium ex-situ/in-situ conservation, awareness creation, R&D, herbal gardens, etc. and a centrally sponsored scheme "National AYUSH Mission"
enterprises, accounting for more than 80% of the enterprises, located in identifiable geographical clusters. (NAM) to support cultivation of medicinal plants on farmer's lands on mission mode.
 The products market is worth about INR 40 Billion with over-the-counter products such as digestives, health food and pain  Provisions have been made for the North-eastern region in this sector.
balms, constituting almost 75% the segment. India has 9,000 units engaged in the manufacture of AYUSH drugs.  The Scheme for Hospitals and Dispensaries, under NRHM including AYUSH flexi-pool, continues to provide assistance to states for
 The biggest markets for Indian herbal products are Western Europe, Russia, USA, Kazakhstan, UAE, Nepal, Ukraine, Japan, integrating AYUSH in the national health care network, creating AYUSH facilities in PHCs/CHCs/District Hospitals.
Philippines, Kenya etc.  The AYUSH Sector Innovation Council has been instituted by the Government of India.
 India has over 8000 medicinal plants found in the Himalayan region, around its coastline, deserts and rainforest eco-system. INVESTMENT OPPORTUNITIES
 More than 32 Million people are practicing yoga in the USA alone. The demand for yoga across the world is growing  Ayurveda drug manufacturing (nutraceuticals, food supplements, cosmetics and rejuvenates).
exponentially.  Setting up of specialised treatment centres.
GROWTH DRIVERS  Medical tourism for curative and rejuvenation treatments.
 The Government of India has set up a dedicated Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and
Homoeopathy (AYUSH) with the aim of providing impetus to these ancient healthcare systems with a targeted thrust.
 In many places in India, the Indian systems of medicine and homoeopathy continue to be widely used due to their
accessibility and sometimes, because they offer the only kind of medicine within the physical and financial reach of the
patient.
 The Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy provides ample opportunities for
investment, education and research, health services and training in the AYUSH sector.
 The department has a ‘Central Sector Scheme for promotion of International Cooperation’ which aims to promote global
acceptance of AYUSH systems of medicine, facilate international promotion, development and recognition of Ayurveda,
Yoga, Naturopathy, Unani, Siddha and Homoepathy. Its purpose is also to create awareness about AYUSH strengths and
utility in emerging health problems, to foster interaction of stakeholders and market development of AYUSH at the
international level, to support international exchange of experts and information for the cause of AYUSH systems, to give a
boost to AYUSH products in the international market, to establish AYUSH academic chairs in foreign countries.
 One of the main reasons for the surge in demand for AYUSH is concerns related to escalating costs of conventional health
care and the adverse effects of chemical-based drugs and increasing lifestyle disorders.There is an epidemiological
transition. By the year 2020, non-communicable diseases (NCDs) are expected to account for seven out of every 10 deaths
in developing regions. AYUSH has the strength in managing NCDs.
 India has conducted international exchange programmes, seminars and workshops on AYUSH. MoUs for ‘Country to Country
cooperation in the field of tradional medicine’ have been signed with China, Malaysia, Hungary, Trinidad and Tabago and is
in the pipeline with Serbia, Nepal, Bangladesh, Sri Lanka and Mexico.
 Ministry of Tourism also promotes AYUSH Systems of Medicine by organising and participating in various wellness and
medical tourism events and by running publicity campaigns and organising road shows in the overseas market.
FDI POLICY
 100% Foreign Direct Investment (FDI) is permitted in the AYUSH sector.
SECTOR POLICY
 A National Health Assurance Mission is to be launched in order to promote the sector.
 A number of AYUSH clusters across the country will provide plug-and-play facilities for setting up AYUSH units.

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