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Tamil Nadu Industrial Policy 2021
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This Policy is applicable for projects establishing or expanding industrial units, industrial parks, R&D projects, warehousing and logistics except those specified in the negative list in Annexure I. Investments made from January 1, 2021, will be considered eligible for availing incentives. This Policy supersedes the Tamil Nadu Industrial Policy 2014 and will be valid till 31.03.2025. The Policy may be periodically revised from time to time.
Contents
  1. Policy Targets
  2. Infrastructure
  3. Focus & Sunrise Sectors
  4. Incentives
  5. Other Key Policy Highlights
  6. Ease of Doing Business
Policy Targets
The policy aims at achieving annual growth rate of 15% in the manufacturing sector during the policy term; Attracting investments worth INR 10 lakh cr. (US$ 135 billion) between 2020 and 2025; Creating employment opportunities for 20 lakh (2 million) people by 2025 and Increasing the contribution of the Manufacturing Sector to 30% of GSVA by 2030.
15%
Annual Growth Rate in Manufacturing Sector
INR 10 lakh cr
Attracting Investments between 2020 to 2025
20 lakh
Employment Opportunities by 2025
30%
GSVA by 2030.
Infrastructure
Industrial Parks & Land Bank Creation
Transport & Logistics
Energy & Utilities
IT Infrastructure
  • 57 formally approved SEZs in the State.
  • SIPCOT & SIDCO have a combined land bank of 40,000 acres out of which 3,500 acres is currently available.
  • SIPCOT allows allottees who have used up 50% of their allotted area, to Construct Plug & Play facilities and sublease it to others.
  • Industry-Specific Parks to help promote cluster-based Development.
  • Ponneri Node of the Chennai Bangalored Industrial Corridor to be developed, Phase II of Chennai Kanyakumari Industrial Corridor is near completion, Tamil Nadu Defence Industrial Corridor (TNDIC) launched in 2019.
  • 5,324 km of National Highways, 11,830 km of State Highways, 46,496 km of District Roads, and 1,49,446 km of Rural Roads are present in the State.
  • Four International Airports & Seaports are present in the State.
  • A new Greenfield Airport has been proposed which would handle 40 million passengers annually.
  • Power Surplus State with an installed capacity of 31,990 MW accounts for 17.2% of total Renewable Energy production.
  • 24x7 Power to Industries/Developers with a demand of 10 MVA or with an investment of Rs.100 cr. or more for companies.
  • Combined Water Supply Scheme supplies 148 MLD water to nearly 541 Industries.
  • The State has 6 Submarine Landing Cable Stations with bandwidth of 14.8 Tbps.
  • Chennai is named as the Saas (Software as a Service) Capital of India.
Focus and Sunrise Sectors
Focus Sectors
The Policy shall continue to promote the existing focus sectors, which are drivers of economic growth and development in the state.
  • Automobile and Auto Components
  • Chemicals
  • Electronic Hardware
  • Heavy Engineering
  • Leather
  • Textiles
  • Financial Services
  • Software
Sunrise Sectors
The Government has launched dedicated policies for some of the identified focus and sunrise sectors. To provide a thrust to the sunrise sectors, a special package of incentives has been proposed in this Policy.
  • Aerospace and Defense Applications
  • Agro & Food Processing Except Edible Oil Industries
  • Renewable Energy Components Manufacturing
  • Electronics System Design & Manufacturing
  • Medical Electronics, Devices and Equipment
  • Electric Vehicles, EV Cell & Battery Manufacturing or any Green Fuel Technology such as Hydrogen Fuel
  • Biotechnology
  • Pharmaceuticals, Bulk Drugs and Nutraceuticals
  • Petrochemicals and Speciality Chemicals
  • Footwear, Finished Leather Goods and Polyurethane Fabric
  • Technical Textiles Including Medical Textiles
Incentives
Incentives Criteria
Eligibility
Project Category
District Category
Rs. 50 crore
Investment in 4 years
&
50 Jobs
Creation in 4 years
Project Category (Rs. in cr) Investment Period
Maximum Investment Minimum Investment
Sub-large 50 300 4 years
Large 300 500 4 years
Mega 500 5000 4 years
UltraMega 5000 - 7 years
District Category
A Category Districts (4 districts)
Chengalpattu , Chennai, Kancheepuram and Tiruvallur.
B Category Districts (12 districts)
Coimbatore, Erode, Karur, Krishnagiri, Namakkal, The Nilgiris , Ranipet, Salem, Tiruchirappalli, Tirupattur, Tiruppur, and Vellore.
C Category Districts (22 districts)
Ariyalur, Cuddalore, Dharmapuri, Dindigul, Kallakurichi, Kanniyakumari, Madurai, Mayiladuthurai, Nagapattinam, Perambulur, Pudukkottai, Ramanathapuram, Sivagangai, Tenkasi, Thanjavur, Theni, Thiruvarur, Thoothukudi, Tirunelveli, Tiruvannamalai, Villupuram and Virudhunagar.
Tamil Nadu on Google maps
Class A
District*
Class B
District*
Class C
District*
*Disclaimer: Districts are categorized into three classes based on the sector-wise incentives offered to them. To learn about the sector-wise incentives offered to various district-class, click here.
Eligibility
Rs. 50 crore
Investment in 4 years
&
50 Jobs
Creation in 4 years
Project Category
Project Category: Sub-large
Minimum Investment (Rs. in cr.): 50
Maximum Investment (Rs. in cr.): 300
Investment Period
4 years
Project Category: Large
Minimum Investment (Rs. in cr.): 300
Maximum Investment (Rs. in cr.): 500
Investment Period
4 years
Project Category: Mega
Minimum Investment (Rs. in cr.): 500
Maximum Investment (Rs. in cr.): 5000
Investment Period
4 years
Project Category: UltraMega
Minimum Investment (Rs. in cr.): 5000
Maximum Investment (Rs. in cr.): -
Investment Period
4 years
District Category
Class A
District*
Class B
District*
Class C
District*
*Disclaimer: Districts are categorized into three classes based on the sector-wise incentives offered to them. To learn about the sector-wise incentives offered to various district-class, click here.
District Category
A Category Districts (4 districts)
Chengalpattu , Chennai, Kancheepuram and Tiruvallur.
B Category Districts (12 districts)
Coimbatore, Erode, Karur, Krishnagiri, Namakkal, The Nilgiris , Ranipet, Salem, Tiruchirappalli, Tirupattur, Tiruppur, and Vellore.
C Category Districts (22 districts)
Ariyalur, Cuddalore, Dharmapuri, Dindigul, Kallakurichi, Kanniyakumari, Madurai, Mayiladuthurai, Nagapattinam, Perambulur, Pudukkottai, Ramanathapuram, Sivagangai, Tenkasi, Thanjavur, Theni, Thiruvarur, Thoothukudi, Tirunelveli, Tiruvannamalai, Villupuram and Virudhunagar.
Category of Incentives
Eligibility
Projects that are Mega and Ultra-Mega in A Districts, or Large, Mega and Ultra-Mega in B and C Districts.
Investment Promotion Subsidy
Investors are provided 4 different options while availing the Investment Promotion Subsidy -
  • SGST Reimbursement - 100% SGST payable on the sale of final products manufactured, sold, and registered in the State shall be reimbursed for a period of 15 years.
  • Fixed Capital Subsidy -Capital Subsidy of up to 25% will be disbursed over a maximum period of 15 years based on the location and project category. Large projects in A district shall be provided a back ended capital subsidy of Rs. 1 cr.
  • Flexible Capital Subsidy - Capital Subsidy of up to 35% of EFA for A Districts, 37% for B Districts and 40% of EFA for C Districts based on the project disbursed over 2.5 times the investment period.
  • Turnover Based SubsidyUp - to 2% of yearly turnover of mega/ultra-mega projects more than 2000 jobs for 10 years.
Training Subsidy
  • Skilling support can be availed in form of a Training Subsidy of Rs. 4000 per worker per month for 6 months for residents of Tamil Nadu.
  • For women and transgender employees, persons with benchmarked disabilities, persons from SC/ST communities the training subsidy shall be Rs. 6000 per worker per month for 6 months.
Land Cost Incentive
Eligible projects in SIPCOT in A & B districts, land allotment will be made at a 10% concessional rate and at a 50% concessional rate in C districts for land up to 20% of EFA.
Interest Subvention
5% as a rebate in the rate of interest shall be provided to Ultra-Mega Projects only on actual term loans taken for the purpose of financing the project, up to Rs. 4 cr. per annum for a period of 6 years.
Standard Incentives
  • Electricity Tax exemption for 5 years on purchased power from TANGEDCO, or generated & consumed from captive sources.
  • 50% concession on stamp duty in A & B districts in SIPCOT parks, 100% concession in C Districts in government promoted parks.
  • 25% subsidy on cost of green industry initiatives up to Rs. 1 cr.
  • 50% of cost incurred limited to Rs. 25 lakh per company.
  • 50% of expenditure incurred limited to Rs. 30 lakh per company.
SGST Refund of Capital Goods
Companies facing inverted tax structure can utilise Input Tax Credit reimbursed over 5 annual instalments.
Eligibility
Projects in Sunrise Sector that are Mega and Ultra-Mega Projects for A Districts, or Large, Mega and Ultra-Mega Projects for B & C Districts.
Investment Promotion Subsidy
Projects opting for Flexible Capital Subsidy shall get a Sunrise Booster of 1 which implies an additional capital subsidy of up to 7.5% of EFA.
Land Cost Subsidy
Land allotment will be made at 10% concessional rate in A & B districts and at a 50% concessional rate in C districts for land up to 20% of EFA.
Stamp Duty Incentive
100% stamp duty exemption will be given for lease or purchase of land.
Enhanced Incentive for Quality Certification
50% subsidy of the total cost incurred up to Rs. 1 cr.
Enhanced Incentive for Intellectual Property Creation
50% of the expenditure incurred up to Rs. 1 cr.
Interest Subvention
5% rebate on actual term loans for a period of 6 years up to Rs. 4 cr. per annum.
Standard Incentives & SGST Refund on Capital Goods
Project shall also be eligible for standard incentives (except IP creation & Quality Certification) and SGST Refund on Capital Goods for firms with inverted tax structures.
Eligibility
Developers of Mega & Ultra-Mega industrial parks (investment >Rs. 500 cr.)
Incentives
  • Capital Subsidy of 12% or 15% of investment in B or C Category Districts,
  • Subsidy of 10% on the cost of developing the residential facilities developed within the industrial park up to Rs. 10 cr.
  • 25% subsidy on cost of capital for Green Industry initiatives, up to Rs. 5 cr.
Eligibility
  • Minimum investment of Rs. 50 cr. in Eligible Fixed Assets and creation of Employment for 50 persons.
  • Clearly demarcated facilities in or outside the Projects with project located in Tamil Nadu.
  • Registered with the Department of Scientific and Industrial Research, Government of India (DSIR).
Land Cost Incentive
50% reimbursement of the cost of purchase or lease of land for up to 20 acres.
R&D Training Incentive
Rs. 10,000 per person per month can be availed for 12 months.
Enhanced Quality Certification Incentive
50% subsidy of the total cost incurred up to Rs. 1 cr.
Enhanced Incentive for Intellectual Property Creation
50% of the expenditure incurred up to Rs. 1 cr. and up to Rs. 5 cr. for standalone R&D assets.
Standard Incentives & SGST Refund on Capital Goods
Project shall also be eligible for standard incentives (except IP creation & Quality Certification) and SGST Refund on Capital Goods for firms with inverted tax structures.
Eligibility
  • Multimodal logistics park with investment >Rs. 50 cr. and area >10 acres.
  • Cold chain facility with investment >Rs. 15 cr. and area > 20,000 sq feet or
  • Warehousing facility with investment>Rs. 25 cr. and area >1 lakh sq feet.
Industry Status
Logistics parks to get industry status, relaxation on non- processing area.
Incentive for Integrated Logistics Parks
  • Capital Subsidy of 12% or 15% of investment in B or C Category Districts,
  • 10% subsidy on the cost of developing residential facilities developed within the Industrial Park up to Rs. 10 cr.
  • 25% subsidy on cost of capital for Green Industry initiatives, up to Rs. 5 cr.
Skilling & Capacity Building
50% reimbursement of the training cost shall be provided to logistics and warehousing projects in C Districts up to Rs. 10,000 per employee (residents of Tamil Nadu).
Apex Skill Development Centre for Transportation & Logistics
Apex Skill Development Centre for Transportation and Logistics to be scaled up to Southern & Western Tamil Nadu in a phased manner.
Eligibility
  • SGST Reimbursement - 100% SGST payable on the sale of final products manufactured, sold, and registered in the State shall be reimbursed for a period of 15 years.
  • Fixed Capital Subsidy - Capital Subsidy of up to 25% will be disbursed over a maximum period of 15 years based on the location and project category. Large projects in A district shall be provided a back ended capital subsidy of Rs. 1 cr.
  • Flexible Capital Subsidy - Capital Subsidy of up to 35% of EFA for A Districts, 37% for B Districts and 40% of EFA for C Districts based on the project disbursed over 2.5 times the investment period.
  • Turnover Based Subsidy - Turnover Based Subsidy Up to 2% of yearly turnover of mega/ultra-mega projects more than 2000 jobs for 10 years.
Investment Promotion Subsidy (up to 40% of EFA)
Logistics parks to get industry status, relaxation on non- processing area.
Imported Machinery
New and second-hand machinery can be included under Eligible Fixed Assets.
Transport Subsidy
75% of the cost of relocation of capital goods up to Rs. 10 cr.
Land Cost Subsidy
Eligible projects in SIPCOT in A & B districts, land allotment will be made at a 10% concessional rate and at a 50% concessional rate in C districts for land up to 20% of EFA.
R&D Training Incentive
Rs. 10,000 per person per month can be availed for 12 months.
Standard Incentives & SGST Refund on Capital Goods
Project shall also be eligible for standard incentives and SGST Refund on Capital Goods for firms with inverted tax structures.
Eligibility
Projects with investment between Rs. 50-300 cr. within 4 years and employment > 50 people.
Incentives
  • Capital subsidy of Rs. 1 cr for A district and 5% of EFA in C district in 5 equal annual instalments.
  • Electricity Tax exemption for 5 years on purchased power from TANGEDCO, or generated & consumed from captive sources.
  • 50% Concession on Stamp duty payable on lease or purchase of land.
  • 25% subsidy on cost of green industry initiatives up to Rs. 1 cr.
Other Key Policy Highlights
  • Reservation of 20% of land area in SIPCOT Industrial Parks for MSMEs to continue as per the current practice.
  • 15% of the Industrial Park area exceeding 500 acres shall be reserved for social infrastructure.
  • Development of two Industrial Housing Facilities to accommodate 20,000 workers to cater to the housing needs of five Industrial Parks in the Sriperumbudur Belt.
  • Apex Skill Development Centres (ASDC) in 3 Sectors - Auto, Auto Components & Machine Tools, Hospital and Health Care Services and Transportation & Logistics.
  • Flexibility in employment conditions including flexible working hours, higher incentives for industries encouraging employment for locals, women, transgenders, and persons from the SC/ST communities.
  • TIDCO to provide Equity Financing to Investors from 2-26% based on the Sector.
  • Industrial Ecosystem Fund with a corpus of INR 500 Cr. to support Small Infrastructure Projects and Ecosystem creation shall be created.
  • Research & Technology Fund with a corpus of INR 100 Cr. to support Research and Development in Sunrise Sectors and Technology adoption in existing Industries.
  • Venture Capital Fund with a corpus of INR 500 Cr. to support Entrepreneurs undertaking Ventures in Sunrise Sectors.
  • Digital Accelerator Scheme to promote Startups Investing in Tamil Nadu from US in various fields such as IT/Healthcare/EV/emerging areas on IOT, AI, Cloud Computing /SDGs, 10% of Capital raised may be provided as a grant up to INR 1 Cr. per Start-Up.
  • Term Loan of up to INR 40 Cr. (US$ 5.7 Million) under the General Term Loan Scheme.
Ease of Doing Business
  • All enterprises with a proposed investment in plant and machinery or equipment that exceeds INR 50 Cr., and turnover that exceeds INR 250 Cr., are eligible for the SWPs 180+ services across 38 Departments.
  • Dedicated desk and portal for Non-Resident Tamils to facilitate investments in Tamil Nadu, with joint working committee agreements with countries.
  • Industry help desk portal is designed to help businesses resolve pending operational issues, incentives disbursal, approvals/clearances within 30 Days.
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