Land, transportation subsidy and more! Tamil Nadu does everything to attract foreign investment
The government of Tamil Nadu has announced a series of incentives, including subsidies on the cost of land, transportation and reimbursement of the state GST levied on capital goods for incoming foreign direct investment (FDI). state over the next year. The special scheme aims to attract foreign companies looking to diversify their business activities and supply chain amid Covid-19. The minimum investment commitment must be Rs 500 crore over a period of four years. For projects over Rs 5,000 crore, the investment period is seven years.
The program and a series of other state industrial development incentives are part of Tamil Nadu’s Industrial Policy 2021, unveiled by Chief Minister Edappadi K. Palaniswami on February 16 in Chennai.
FDI firms will be eligible for an investment promotion grant which may take the form of an SGST refund for finished products, a fixed capital grant, a flexible capital grant, or a based grant. on turnover. The amount of the subsidy can be up to 40% of eligible fixed assets, including new and used machines in the event of relocation. The policy states that the four options are mutually exclusive and that a single choice must be exercised at the start of the project by the investor. It also indicates that investment proposals from companies with resettlement plans may benefit from a higher set of incentives on a case-by-case basis.
To facilitate the transition of foreign companies to Tamil Nadu, a transport subsidy of 75 percent of the costs incurred for transport and logistics (with a cap of Rs 10 crore) has been authorized.
The policy states that land will be provided at concessional rates of 50 percent in the less industrialized districts of the state. Projects will also benefit from an electricity tax exemption for five years, exemption from stamp duty, green industry incentives up to 1 crore rupees, certification incentive quality and an incentive to create intellectual property (IP).
The new investment policy talks about equity financing, industrial ecosystem funds, R&D funds, venture capital funds and digital accelerator funds. The provision for term loans of up to Rs 40 crore for new industries through the Tamil Nadu Industrial Investment Corporation is also part of the new policy.
The policy targets an annual growth rate of 15 percent in the state’s manufacturing sector over the life of the policy. It strives to attract investment worth Rs 10 lakh crore by 2025. Creating employment opportunities for 20 lakh people by 2025 and increasing the contribution of manufacturing to 30% (compared to 25% currently) of the state’s economy are the most important goals.
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