Arunachal Pradesh Industrial Development and Investment Policy, 2025 (APIDIP 2025)
Why the policy exists
Notified vide No. DOI-13/5/2024, Department of Industries, dated 02.04.2025, effective from 01.04.2025. Nodal: Director/Commissioner of Industries, Govt. of Arunachal Pradesh. Registration period: 3 years from date of notification, subject to specific incentive periods.
The Arunachal Pradesh Industrial Development and Investment Policy, 2025 (APIDIP 2025) aims "to usher in growth and economic development by fostering entrepreneurship, promoting self-employment and creating employment opportunities by way of industrialization, while ensuring ecological sustainability and heritage of the State." It replaces and repeals the Arunachal Pradesh State Industrial and Investment Policy, 2020.
Key Objectives
- •Create a congenial investment climate for existing and new enterprises in manufacturing and services.
- •Promote local entrepreneurs and products manufactured from state produce — textiles, food processing and tourism.
- •Promote integrated regional growth while preserving ecology.
- •Skill development of youth for local entrepreneurship and employment generation.
- •Encourage exports and create market linkages from the region to global markets.
- •Simplify procedures and develop industrial/social infrastructure, human resources, credit and market access.
- •Support the One District One Product (ODOP) programme and GI Products from the State.
- •Support underprivileged sections of society.
State Snapshot (as stated in the policy)
| Parameter | Figure |
|---|---|
| Area / Forest cover | 83,743 sq. km; 79.33% forest cover — one of the world's 12 mega biodiversity hotspots |
| Districts | 28 |
| Hydropower potential / installed | 58,000 MW potential; 1,270 MW installed |
| Industrial power tariffs | ₹3.35–₹4.30 per unit; agri/BPL as low as ₹2.65 per unit; competitive bulk tariffs ₹3.25–₹3.75 per unit |
| Literacy rate | 66.95% |
| Industrial estates/growth centres | 17 (Annexure-I of the policy) across 10 districts/DICs |
| Registered units (Udyam Portal) | 18,165 total — 5 Large, 16 Medium (Manufacturing), 19 Medium (Service), 18,125 Micro & Small |
Connectivity Infrastructure Cited
- •Nechiphu and Sela Tunnels improving West Kameng/Tawang connectivity to mainland Assam.
- •Donyi Polo Airport, Itanagar (inaugurated 2022); operational airports at Hollongi, Tezu, Pasighat, Ziro; 7 Advanced Landing Grounds; 25 helipads.
- •Railway expansion: 26 km of track and 5 rail goods sheds currently; key upcoming projects include Murkongselek–Pasighat, Pasighat–Tezu–Rupai, Silapathar–Bame–Along and Misamari–Tawang.
Who qualifies, and under what conditions
Eligible Units
- •New manufacturing units — except activities on the Negative List (Annexure-IV).
- •New service-sector units engaged in activities on the Positive List for Service Sector (Annexure-III).
- •Existing manufacturing units undertaking Substantial Expansion (minimum 25% additional investment over existing investment) — except Negative List activities.
- •Existing Positive-List service units undertaking Substantial Expansion.
- •Existing units in manufacturing/services, irrespective of expansion, for specified incentives only.
Key Definitions
| Term | Meaning (as per policy) |
|---|---|
| Investment | Capital expenditure on plant, machinery, buildings and other long-term physical assets; land may be included subject to competent-authority approval |
| Substantial Expansion | Additional investment of minimum 25% of the total existing investment in plant & machinery (manufacturing) or building/durable assets (services), for capacity enhancement, modernisation, diversification or a new activity line |
| Priority Sector | Food processing; non-timber forest produce (bamboo, cane, medicinal/aromatic plants, tea, coffee); textiles/handloom/handicraft; tourism; skilling; ODOP; GI products; EV charging infrastructure; pharmaceuticals; waste-to-wealth |
| Consultant | Consultancy organisation registered/empanelled with State/Central Govt., or MSME NIC Code-70200 management consultants, for DPR/feasibility reports |
Priority Sectors (Annexure-III)
Food processing · non-timber forest produce industries · textiles, handlooms & handicrafts · tourism (resorts, hotels, homestays, adventure tourism) · coaching/training/skill development · ODOP · GI products · EV charging infrastructure · pharmaceuticals · waste-to-wealth activities.
Positive List for Service Sector (selected)
IT/Electronics, online services, film/video production and music studios · commercial greenhouses · cold storage/controlled atmosphere · hospitals/medical diagnostics · eco-tourism infrastructure · cable car/theme/adventure parks · hotels/guest houses/resorts (new units must install solar water heating) · heritage restoration for commercial use · testing/R&D/certification services · EV fleet aggregation (min. 10 vehicles) · EV charging infrastructure.
Negative List (Annexure-IV, summarised)
Tobacco and tobacco substitutes · plastic carry bags below 20 micron · petroleum/gas refinery products · fossil-fuel power generation and refineries · coke and fly ash · units without valid environmental clearance/consent · low value-addition activities (mere storage, cleaning, repacking, re-labelling) · gold and gold ore · molasses.
Incentive quantum on plant, machinery & durable assets
A. Capital Investment Incentive (New Units & Substantial Expansion)
| Investment Band | Base Incentive | Priority Sector Add-on | Local Employment Add-on* | Max Cap |
|---|---|---|---|---|
| ₹5 Lakh – ₹25 Lakh | 50% of P&M / building & durable-asset cost | +10% of deduced subsidy | +10% of deduced subsidy | ₹15 Lakh |
| >₹25 Lakh – ₹50 Lakh | 50% of P&M / building & durable-asset cost | +10% of deduced subsidy | +10% of deduced subsidy | ₹30 Lakh |
*Employing at least 50% (or 5 employees in Band 1 / 10 employees in Band 2) of skilled workforce from APST/permanent residents of Arunachal Pradesh. Both add-ons together, if qualified, can bring Band 1 to ₹15 Lakh and Band 2 to ₹30 Lakh (the illustrative worked examples in the policy show ₹13.75 Lakh and ₹27.5 Lakh respectively for a single add-on on the maximum eligible investment).
- •Applicable only where new P&M/building purchases are made on Arm's Length Pricing.
- •An existing unit can avail this incentive for Substantial Expansion only once during the scheme's validity.
- •A unit newly registered under the scheme cannot separately claim the Substantial Expansion benefit.
- •Physical verification of the unit is mandatory before disbursal.
B. Capital Interest Subvention (CIS)
| Investment Band | Standard Rate | Priority Sector Rate | Period | Max Cap (Standard / Priority) |
|---|---|---|---|---|
| ₹5 Lakh – ₹25 Lakh | 6% p.a. | 8% p.a. | Max 5 consecutive years | ₹10 Lakh / ₹15 Lakh |
| Above ₹25 Lakh | 5% p.a. | 6% p.a. | Max 5 consecutive years | ₹20 Lakh / ₹25 Lakh |
- •Eligible unit bears a minimum 2% p.a. interest burden — subvention adjusts if the bank's lending rate falls (e.g., a 5% lending rate limits subvention to 3%, unit bears 2%).
- •Computed on the amount actually disbursed, not the sanctioned principal.
- •Disbursement begins only after commencement of commercial production/operation.
- •Service-sector units need a minimum ₹5 Lakh investment in new building/durable assets to qualify.
C. Working Capital Interest Subvention
All existing and new GST-registered eligible units can avail 5% p.a. interest subvention on working capital loans for a maximum of 5 consecutive years from date of registration. The unit bears a minimum 1% p.a. interest burden. Maximum benefit: ₹50 Lakh over 5 years, not exceeding 100% of investment in plant & machinery/durable assets. Disbursed annually as reimbursement on submission of the bank's annual interest payment certificate.
D. Stamp Duty & Registration Fee
100% reimbursement of Stamp Duty and Registration fee on the conveyance/lease deed, admissible only after commencement of commercial production/operation — applicable only to units allotted land in Government Industrial Estates/Parks/Growth Centres. The required land area must be specified in the DPR and/or bank appraisal report.
SGST, VAT, power and environmental incentives
A. SGST Reimbursement (New Units / Substantial Expansion)
| Category | Period | Ceiling |
|---|---|---|
| Micro Enterprises | 7 years from DCP | 250% of eligible investment amount |
| Small Enterprises | 7 years from DCP | 200% of eligible investment amount |
| Medium & Large Enterprises | 7 years from DCP | 180% of eligible investment amount |
100% of Net SGST (Gross SGST paid less Input Tax Credit) reimbursed. Condition: post-benefit, the unit must maintain production/operation for the next 5 years at not less than 70% of average preceding-5-year production, and must not have availed similar benefit elsewhere — violation triggers full clawback (subject to a hearing and force-majeure exceptions).
B. VAT Exemption
99% Sales Tax (VAT) exemption for eligible New Units or units undertaking Substantial Expansion, for 7 years from commencement of commercial production.
C. Power Subsidy
| Unit Category | Rate | Cap | Period | Connection Requirement |
|---|---|---|---|---|
| Manufacturing MSMEs | ₹2.00 per unit consumed | ₹75 Lakh p.a., not exceeding 100% of total P&M investment | 5 years from DCP | 11 kV / 33 kV transmission lines |
| Large-scale / bulk consumers | ₹1.00 per unit consumed | Not exceeding 100% of total P&M investment | 5 years from DCP | 132 kV or above transmission lines |
Subsidy is front-ended (deducted from the bill itself); exclusive of load security, interest and taxes; requires regular, timely payment to the Power Department; available to New Units or units undertaking Substantial Expansion.
D. Green Incentives
| Incentive | Quantum | Cap | Notes |
|---|---|---|---|
| Green Energy Generation (solar/wind/water/biomass/hybrid, 10 kW–2000 kW) | 50% of purchase & installation cost | ₹25 Lakh | Released 40% at 6 months, 40% at 1 year, 20% at 2 years post-installation; existing units only for DG-Set replacement |
| Wastewater Recycling Facility | 50% of equipment/technology cost | ₹2 Lakh | Excludes construction/civil works |
| Pollution Control Devices | 50% of equipment cost | ₹10 Lakh | Existing units only; released after satisfactory State PCB commissioning report |
| Electric E-Load Carriers (excl. e-rickshaw) | 10% of ex-showroom price | ₹50,000; max 1 vehicle/unit; max 100 units statewide | New Units only; min. 785 kg carrying capacity; first-come-first-served |
Quality, underprivileged, transport & export support
A. Common Facilitation Centre (CFC) Reimbursement
50% of cost incurred using a recognised Common Facility Centre (R&D/testing labs, packaging etc.), capped at ₹1 Lakh per unit per year for a maximum of 3 years. Available to units and registered cooperatives/FPOs in Handicraft, Handloom, Agro, Food Processing and Aromatic/Medicinal plant sectors.
B. Quality Certification & Testing
35% reimbursement on cost of in-house testing equipment/quality certification, capped at ₹5 Lakh. Sanctioned only after obtaining a national/international quality mark (GMP, ISO, BIS, FPO, BEE, AGMARK, ECOMARK, ZED Rating, GHP, GRIHA, LEED, etc.). Not applicable to machinery used directly in manufacturing/service delivery.
C. Incentives for Underprivileged Sections
| Incentive | Quantum |
|---|---|
| DPR Consulting Fee Reimbursement | 95% of consultant's fee, up to ₹1 Lakh |
| Plot Allotment Reservation | 10% of plots in Industrial Estates reserved for eligible persons |
Eligibility restricted to: Women category (single mothers and widows) and Specially-abled category (40%+ physical disability of vision, hearing or locomotive skills) — over and above standard MSME incentives.
D. Transport Subsidy (Air Freight) & Export Incentive
| Incentive | Quantum | Cap |
|---|---|---|
| Air Freight Transport Subsidy (finished goods, out-of-state within India) | 50% of freight amount | ₹5 Lakh per year per unit, max 5 years |
| Export Transportation Subsidy (finished goods to international port) | 60% of transport cost up to international port | ₹5 Lakh per year per unit, max 5 years; export-registered units only |
| Export Sample Shipment Reimbursement | Actual cost of sample shipment to overseas buyer | ₹50,000 per enterprise per year, max 2 years; export-registered units only |
Process, obligations and administration
| Element | Detail |
|---|---|
| Registration | New units must register with the Industries Department through the notified mechanism; date of commencement of operation is authenticated by designated authorities |
| De-registration | Voluntary — by Director, Industries, after due process; involuntary — by the Directorate with Commissioner (Industries) approval, for acts of omission/commission |
| Single Window System (SWS) | Implemented at district level via District Industries Centres with dedicated Udyam Mitras; online SWS covers registration through subsidy disbursal |
| Land Lease (existing) | Industrial sheds ₹3.00/sq.ft./month; open plots ₹1.00/sq.m./month; lease period 33 years, extendable by another 33 years (APLSR Act, 2000) |
| Land Lease (proposed amendment) | State Cabinet approved (19.02.2025) extending initial lease to 50 years, extendable by another 49 years, for Govt. industrial land/estates — Indicative pending formal APLSR amendment notification |
| Pollution Board Categorisation | White (NOC-exempt, notify only), Green (15-yr consent), Orange (10-yr consent), Red (5-yr consent) — per Annexures V–VIII |
Statutory Obligations on Units
- •Compliance with Factories Act 1948, Environmental Protection Act 1986, IDR Act 1951, Minimum Wages Act 1948, Arunachal Pradesh Labour Laws, ESI Act & Regulations.
- •Adherence to State Pollution Control Board norms (Air, Water, Noise).
- •APST employment quota: minimum 20% in Managerial cadre and 30% in Non-Managerial cadre within 3 years of commencement of commercial production/operation — Employment Certificate required from the competent authority.
- •Allotted industrial land must be used solely for the approved purpose unless the line of activity is formally changed.
Key dates and durations
| Date / Duration | Milestone |
|---|---|
| 19/02/2025 | State Cabinet approves amendment to APLSR Act, 2000, extending initial industrial land lease period from 33 to 50 years (extendable by 49 years) — amendment notification pending. |
| 02/04/2025 | Arunachal Pradesh Industrial Development and Investment Policy, 2025 (APIDIP 2025) notified vide No. DOI-13/5/2024, Department of Industries, published in the Arunachal Pradesh Gazette Extraordinary (Vol. XXXII, No. 118). |
| 01/04/2025 | Policy comes into effect; Arunachal Pradesh State Industrial and Investment Policy, 2020 stands repealed with effect from this notification. |
| 3 years | Registration period of the policy from date of notification, subject to specific incentive periods prescribed under Chapter-6, unless extended by the State Government. |
| 5–7 years | Individual incentive periods: Capital Interest Subvention and Power Subsidy run 5 years from DCP/registration; SGST Reimbursement and VAT Exemption run 7 years from DCP. |
| 3 years post-benefit | Existing units must sustain the APST employment quota within 3 years of DCP; SGST-benefit units must sustain ≥70% of average preceding-5-year production for the following 5 years or face clawback. |