Assam Aerospace & Defence Manufacturing Policy, 2025
30%
Capital Subsidy (P&M)
₹2.5 Cr
Startup Go-to-Market Support
100%
SGST Reimbursed (Up to 150% FCI)
5 Years
Policy Operation Term
Positioning Assam as an A&D Manufacturing & MRO Hub
The Assam Aerospace & Defence Manufacturing Policy 2025 aims to make Assam a leading hub for aerospace and defence manufacturing, leveraging its strategic location as a gateway to Southeast Asia. It aligns with national indigenisation objectives (DAP 2020, Positive Indigenization Lists, the SRIJAN portal) and the Ministry of Defence's target of $26 billion aerospace & defence turnover by 2025, including $5 billion in exports.
| Key Parameter | Provision / Detail |
|---|---|
| Issuing Authority | Industries, Commerce & Public Enterprise (IC&PE) Department, Government of Assam (Notification No. ECF.473783/99, 23.02.2025) |
| Focus Products | Small arms, ammunition, aerospace systems, UAVs, avionics, simulation, MRO services and R&D |
| Beneficiary Tracks | (A) Defence start-ups · (B) Defence MSMEs / DPSUs / large private companies · (C) MRO units · plus customized incentives for large projects |
| Effective / Validity | From the date of notification / Gazette publication, for a period of 5 years |
Target sectors and strategic objectives
The policy seeks to attract investment and build a competitive, innovative A&D ecosystem — promoting R&D, enhancing infrastructure, developing a skilled workforce, encouraging sustainable practices and strengthening local supply chains, for both domestic and international markets.
- •Aircraft manufacturing
- •Defence equipment production
- •Avionics & Simulation
- •MRO (Maintenance, Repair, and Overhaul) services
- •Research & Development (R&D)
- •UAVs (Unmanned Aerial Vehicles / Drones)
- •Small arms & ammunition
Fiscal support and grants for defence start-ups
| Incentive | Quantum & Details |
|---|---|
| Seed Grant | Up to ₹25 Lakh in phased funding — MVP development, equipment & raw materials, product testing and certifications. |
| Go-to-Market Support | Up to ₹2.5 Crore (₹250 Lakh) for startups with an approved MVP, as equity or convertible debentures, to enter new markets. |
| Rental Subsidy | 50% of monthly rental, up to ₹20,000 / month, for up to 18 months at The Nest or recognised incubators. |
| Assam Defence & Electronics Startup Growth Fund | Fund-of-Funds with an initial corpus of ₹50 Crore, subject to increase based on performance and requirement. |
The Government of Assam collaborates with iDEX (Innovations for Defence Excellence), under the Ministry of Defence, to promote and support Assam's defence startups.
Fiscal supports for defence MSMEs, DPSUs and large private units
| Incentive Type | Quantum & Provision |
|---|---|
| Capital Subsidy (Plant & Machinery) | 30% on capital investment on P&M (Anchor Units & MSMEs), disbursed equally over 3 years based on FCI. |
| Stamp Duty & Registration | 100% reimbursement of stamp duty on lease/sale of land or built-up space allotted by Government / AIDC / AIIDC / designated authorities. |
| Outward Transport Subsidy | 50% of expenditure on transporting raw materials, equipment and finished goods outside Assam. |
| Power Tariff Incentive | ₹1 per unit consumed from the DISCOM. |
| Electricity Duty Waiver | 100% waiver of electricity duty. |
| Patent & Technology Transfer Subsidy | 75% of technology-transfer cost for the first 10 units; 50% for the next 10 units during the policy period. |
| Environmental Compliance (ETP) | 50% of ETP cost, cap ₹2.5 Crore per unit. |
| SGST Reimbursement | 100% of SGST, up to 150% of FCI over 10 years. |
| R&D Support | Up to 50% of project cost (excluding land & building) for 5 years. |
| Marketing Assistance | 50% of rent, literature & display cost — cap ₹3 Lakh/annum (domestic fairs), ₹5 Lakh/annum (overseas fairs). |
| Land Subsidy | Land at 50% discount for defence industries. |
| Skill Development Incentive | ₹10,000 per employee per month for 6 months, cap 100 employees. |
| Green Manufacturing Subsidy | 50% of total cost on ETP / STP / solar power / plantation. |
| Production Linked Subsidy | 5% of annual revenue for 5 years from commercial production. |
| Export Promotion | 2% of export revenue for 5 years from commercial production. |
Tiered capital investment subsidy and operational support for MROs
Capital Investment Subsidy (Tiered by Investment)
| Capital Investment Scale | Subsidy Rate |
|---|---|
| Up to ₹500 Crore | 15% |
| ₹500 Crore – ₹1,000 Crore | 20% |
| Exceeding ₹1,000 Crore | 25%, subject to a maximum of ₹500 Crore |
Land acquisition cost is excluded from 'capital investment.' The subsidy is disbursed in 5 equal instalments, the first in the financial year immediately following commencement of commercial operations.
Other MRO Operational Incentives
| Incentive | Quantum |
|---|---|
| Interest Subsidy | Up to 5% on term loans for setting up / expanding MRO facilities, max ₹50 Lakh/year for 5 years. |
| SGST Reimbursement | State GST reimbursed to recognised MRO units as per the policy's SGST provisions. |
| Power Tariff Subsidy | ₹1 per unit for 5 years from commencement of commercial operations, plus electricity-duty exemption for 5 years. |
Special dispensation for mega projects (₹500 Crore+)
For eligible projects with investment of ₹500 Crore and above, the Government of Assam may further incentivise on a case-to-case basis, including (but not limited to):
- •Ecosystem infrastructure development
- •Provision of green energy
- •Accommodation support during development and implementation
- •Connectivity infrastructure development
Such additional subsidies are extended by the Empowered Committee, with the approval of the State Cabinet.
Policy implementation and administrative terms
- •Additional case-to-case subsidies for large A&D projects are approved by the Empowered Committee with State Cabinet approval.
- •Interpretation of any clause rests finally with the IC&PE Department.
- •The State Government may amend or withdraw any provision or incentive, and may modify the non-eligible / thrust-sector list (in consultation with the Finance Department).
- •A separate set of guidelines, application forms and procedures for availing each incentive will be issued separately.
National policies and central alignment
| Framework | Role in this Policy |
|---|---|
| Defence Acquisition Procedure (DAP) 2020 | Central procurement framework prioritising domestic sources — the indigenisation backdrop. |
| Positive Indigenization Lists | Import embargoes on notified defence items, encouraging local production. |
| SRIJAN Portal | Central indigenisation portal supporting the defence manufacturing ecosystem. |
| iDEX (Ministry of Defence) | Collaboration partner for promoting and supporting Assam's defence startups. |
| MoD $26 bn / $5 bn Export Target | National A&D turnover goal the policy aligns to. |
| AIDC / AIIDC / Designated Authorities | Allot land / built-up space; stamp-duty reimbursement applies to their allotments. |
Source: The Assam Aerospace and Defence Manufacturing Policy 2025 (Notification No. ECF.473783/99 dated 23.02.2025), Industries, Commerce & Public Enterprise Department, Government of Assam. All figures are reproduced from the primary policy document. The policy is effective from publication in the Official Gazette for a period of 5 years. This page is an informational summary and not a substitute for professional advice.