Uttar Pradesh
Advantage Uttar Pradesh
- The Uttar Pradesh is 4th largest State of India. Uttar Pradesh falls in the Golden Quadrilateral (the largest highway project in India and the fifth longest in the world) connecting many of the major industrial, agricultural and cultural centers of India.
- Uttar Pradesh is the most populous state in India (200 million plus population). 56% of UP’s 200 million population are in the working age group.
- Uttar Pradesh’s economy contributes 8.5% to the India’s GDP.
- Uttar Pradesh is also the third largest producer of thermal power and second largest producer of hydel power in India.
- Noida-Greater Noida region in the state is home to 8 operational IT SEZs.
- The state has the highest number of cities identified under the Smart Cities Mission of India.
- Availability of robust infrastructure, extensive road network and a large pool of talent are some of the factors which make UP an attractive industrial destination.
- According to Business Reforms Action Plan 2017, government of India, Uttar Pradesh’s current implementation score is 96.21%.
- Uttar Pradesh ranks 14th among Indian states in rankings based on ease of doing business. With the current pace of reforms it is expected that soon UP will become one of the top performing states in terms of EODB parameters.
- Major national & international airports connecting the rest of India, Middle East & South East Asian countries. UP has largest railway network in the country spanning over 8,949 km.
- There are as many as 12 major rivers, including the largest river in India: Ganges, that flow through the state.
- Uttar Pradesh saw more than 143,000 MSMEs and heavy industrial units set-up their base during the 12th five-year plan.
- Delhi Mumbai Industrial Corridor (DMIC) passes through Uttar Pradesh, with presence of two industrial nodes at Dadri-Noida-Ghaziabad Investment Region (DNGIR) and Meerut-Muzaffarnagar Industrial Area (MMIA)
Highlights: UP Defence and Aerospace Manufacturing Policy 2018
In Uttar Pradesh a number of public and private sector manufacturing units are producing a range of products for the Defense and Aerospace sector. The Public Sector Units (PSUs) which procure various components and materials from local players have created a strong local market base in the state. There are nine Indian Ordnance factories, three Hindustan Aeronautics Limited (HAL) manufacturing units, and a number of Defense MSMEs active in the state, majority of these are located in Kanpur and Lucknow. There are multiple research & development institutions related to Defense and Aerospace sector too.
This policy intends to attract investments in the following areas of Defense and Aerospace sector
- Defence Park at Kanpur and other districts such as Varanasi, Agra, GB Nagar.
- Defence PSUs
- Auto related components and Automobile manufacturing for military
- Testing facilities – Development testing range for artillery and other military equipment
- Police modernization
- Forensics Centres
- Drones Manufacturing and testing facilities
- Aerospace Park
- Aircraft/ Helicopter Manufacturing/ Assembling Units
Plug and Play Industrial Infrastructure
Govt of Uttar Pradesh will promote Defense & Aerospace Parks in the state. The focused districts are Kanpur, GB Nagar, Agra and Varanasi, where strong ecosystem exists. These parks will provide ‘plug-and-play’ industrial infrastructure allowing companies to focus on their core business. These parks will have:
1) Manufacturing area (components, sub-components, sub-assemblies,
Aerospace parts) and SEZ
2) Testing centre
3) Hardware/Embedded Technology Centre
4) Technology innovation centre
5) Housing & Common facility centre
A sector units will be eligible for following incentives
Capital Interest Subsidy – Reimbursement of 5% per annum for 5 years on loan taken for procurement of plant & machinery (subject to a maximum of INR 5 crore per annum per unit and overall ceiling of INR 20 crore)
Infrastructure Interest Subsidy – D&A units setup in the state, will for a maximum period of 5 years be reimbursed the amount of interest at the rate of 5% per annum payable on loan taken by them for developing infrastructural amenities for self-use, subject to a maximum of 2 crore per annum and overall ceiling of INR 10 crore.
Industrial Research Subsidy to D&A units– On the interest of loan taken for industrial research, quality improvement and development of products by incurring expenditure on procurement of plant, machinery & equipment for setting up testing labs, quality certification labs and tool rooms, a reimbursement of 5% per annum for 5 years. (subject to an overall ceiling of INR 1 Crore)
Stamp Duty Exemption – 100% Stamp duty exemption for units set up in D&A sector in Bundlekhand & Poorvanchal Region, 75% stamp duty exemption to D&A units in Madhyanchal & Pashchimanchal Region (except GB Nagar, Ghaziabad), and 50% Stamp duty exemption to those set up in GB Nagar, Ghaziabad districts.
Electricity duty exemption – 100% exemption for 10 years to all new D&A units set up in the state.
SGST reimbursement – 70% of net SGST reimbursement to MSME units in D&A sector for 7 years, subject to annual ceiling of 15% of capital investment or actual tax deposited, whichever is lower.
70% of net SGST reimbursement to eligible Large D&A Units (capital investment of above INR 10 cr and below the capital investment required for consideration under various categories of mega investment) for 10 years, subject to annual ceiling of 10% of capital investment or actual tax deposited, whichever is lower.
70% of net SGST reimbursement to Mega D&A units eligible under this policy for 20 years for Bundelkhand and Poorvanchal and 15 years for Madhyanchal and 12 years for Paschimanchal subject to annual ceiling of 15% of capital investment or actual tax deposited, whichever is lower.
EPF Incentive – All such new D&A units set up in the state, which provide employment to 100 or more unskilled workers, shall be reimbursed 50% of Employer’s contribution to EPF. And, additionally 10% of employer’s contribution on direct employment to 200 skilled and unskilled workers will be reimbursed. 5.8.
Case to Case Incentives – Projects in the following categories will be provided incentives on case to case basis for finalizing the incentive structure – Mega units, Anchor units along with their Vendor units, in case their cumulative fixed capital investment qualifies the eligibility criteria of mega projects, DPSUs with minimum fixed capital investment of INR 1000 crores, DPSUs will also be provided land on lease at subsidized rates.
Additionally, the eligible D&A units will be provided additional incentives i.e. Tax incentive, the Aviation Turbine Fuel is already subsidized under UP Civil Aviation Policy 2017, Rebate on Transportation Charges, Subsidy for setting up Effluent Treatment Plant (ETP), Tech Transfer Subsidy and R&D and Testing Facility Support.
The MSME units in D&A sector will be eligible for reimbursement of 50% of cost of participation in international exhibitions/fairs, subject to maximum of INR 5 lakh per exhibition/fairs, towards maximum 10 MSME D&A units. One unit will be provided this incentive only once in a year.
And Govt of Uttar Pradesh will give preference in procurement to state based D&A units, while procuring equipment for its security forces.
Ease of Doing Business
Single Window– All required approvals and clearances to D&A manufacturing units shall be provided under one roof through single window system of the state directly monitored by the Chief Minister’s office.
Lump Sum Payment of incentives– All incentive payments in the form of reimbursement, subsidies, etc. under the policy will be made with a single sanction order and from a single head of account by the nodal agency.
Simplifying procedures– This policy aims to rationalise existing regulatory regime and simply procedures by supporting self-certification, deemed approval and third party certification.
Labour Permits– Govt of UP will permit D&A industry towards flexible employment conditions, working hours and employment of women in 3-shifts, and hiring of contractual workers, subject to the requisites of respective laws.
Quality Power– Govt of Uttar Pradesh is committed to supply 24X7 reliable, quality power to D&A industry as per provisions in Industrial Investment & Employment Promotion Policy 2017.
Industrial Security– Govt of Uttar Pradesh will provide safe and secure industrial environment in the state. Towards this dedicated police force headed by specialised officer will be deputed at industrial clusters/ areas in regions and integrated police cum fire station will also be established.
You can download the complete ‘Uttar Pradesh Defence and Aerospace Manufacturing Policy 2018’ document
Other Key policies of the Uttar Pradesh state:
Industrial Investment and Employment Promotion Policy UP 2017
Electronics Manufacturing Policy 2017
Civil Aviation Promotion Policy 2017
Highlights of MSMEs Policy of Uttar Pradesh – 2017
Other Important Links
Nivesh Mitra- Single Window Portal, Govt. of Uttar Pradesh