Bihar Textile & Leather Policy, 2022
15%
Capital Investment Subsidy on Plant & Machinery
300%
Employment Subsidy on ESI & EPF Paid
₹2/Unit
Power Tariff Subsidy for 5 Years
5 Years
Policy Operative Period
Why the policy exists
After agriculture, textiles and leather are among Bihar's largest employment generators. This five-year policy builds a complete fibre-to-fashion value chain across textile, apparel, silk, power-loom, leather, leatherette and footwear, complementing the Bihar Industrial Investment Promotion Policy 2016. Bhagalpur silk is GI tagged and the cluster ranks second in India after Karnataka in silk fabric production and export — the only Asian cluster expert in blending silk with cotton, jute, viscose, linen and wool. The state recorded 26,929 weavers in the 4th National Handloom Survey (2018-19) and holds roughly 8% of India's bovine and 12% of its goat population.
The policy exists to close specific gaps left by BIIPP 2016. Under that policy a unit needed at least ₹5 crore investment and 50 core workers for high-priority status — but in textiles a ₹2–5 crore unit can generate 150–200 jobs. BIIPP 2016 also carried no employment generation subsidy despite neighbouring states offering one, provided only electricity-duty reimbursement rather than a rate subsidy, and had no provision for textile or leather accessories.
Coverage spans fibre production, spinning, weaving, knitting and processing; apparel and home textiles including hosiery; natural fibre blending with banana, jute, bamboo and coconut; technical textiles across all twelve segments; leather and leatherette processing and products; parks and business development including R&D and design studios; and accessories and all types of footwear from rubber, plastic, fabric, synthetic and foam.
Category A/B classification and the five core components
Units choose Category A (weaving, knitting, apparel and garment and accessories, hosiery, leather and leatherette garments, accessories and footwear, and all types of footwear) or Category B (spinning, ginning, textile processing, man-made and synthetic fibre, polyester, acrylic, viscose, rayon, technical textile, leather processing), based on market orientation. Integrated units may claim proportionately across both.
| Incentive | Quantum | Cap |
|---|---|---|
| Capital Investment Subsidy (Cat A & B) | 15% of plant and machinery, in 5 equal annual instalments | ₹10 crore — Bihar component only, excluding GoI scheme incentive |
| Freight Reimbursement (Cat A & B, exports only) | 30% of freight from project site to port, first 5 years | ₹10 lakh per year |
| Employment Generation Subsidy (Cat A only) | 300% of ESI and EPF paid, for 5 years — requires at least 75% of direct employees domiciled in Bihar and a minimum of 100 employees | Semi-skilled ₹3,000/month; Skilled ₹4,000/month; Highly-skilled ₹5,000/month per employee |
| Power Tariff Subsidy (Cat A only) | ₹2 per unit from commencement of commercial production, for 5 years, inclusive of the BIIPP 2016 Electricity Duty Subsidy | Micro ₹2.5 lakh; Small ₹12 lakh; Medium ₹35 lakh; Large ₹60 lakh; Mega ₹80 lakh per year |
| Patent Registration (Cat A & B) | 50% of expenditure including filing fees and attorney costs | ₹10 lakh per patent, of which max ₹4 lakh for filing, attorney and tracking |
Special-class entrepreneurs — SC/ST, EBC, EWS, women, differently abled, war widows, acid-attack victims and third-gender entrepreneurs — receive an additional 5% over the applicable incentive cap across all categories, excluding land.
- •Units must submit a DPR with a Bank Appraisal Report, or an empanelled agency's assessment, to establish project cost for incentive calculation.
- •Land cost is capped at 20% of proposed investment excluding land, within Fixed Capital Investment. Incentives are payable only after commencement of commercial production.
- •Expansion, diversification or modernisation of at least 25% capacity qualifies for incremental-investment incentives as a new unit.
- •Special packages exist for Micro and Small units, Special Class entrepreneurs, sick-unit rehabilitation, inter-state relocation, and mergers and takeovers.
State and Central benefits, and the overall cap
| Incentive under BIIPP 2016 | Quantum |
|---|---|
| Interest Subvention | Up to 10% (12% for Micro and Small) or actual rate, whichever is less, for 5 years — capped at 50% of FCI or ₹20 crore, whichever is less |
| Tax-Related Incentives | 100% reimbursement of admitted SGST deposited, for 5 years from commencement of commercial production |
| Stamp Duty / Registration Fee | 100% exemption on land or shed lease, sale or transfer, first time only |
| Land Conversion Fee | 100% exemption on agricultural land conversion fee |
| Skill Development Subsidy | ₹20,000 per trained Bihar-domiciled employee, or the BSDM rate or actual, whichever is lower — payable once |
Total incentives across all heads — capital investment subsidy, freight reimbursement, employment generation subsidy, power tariff subsidy, patent registration, interest subvention, tax-related incentives and skill development subsidy — cannot exceed 150% of Fixed Capital Investment, and disbursal in any single year is capped at one-fifth of the total sanctioned incentives. Tax-related and freight reimbursement together cannot exceed 100% of FCI, or 130% for Micro and Small units. Government of India scheme incentives sit on top of both this policy and BIIPP 2016.
Implementation, recovery and key dates
- •The Department of Industries is the nodal agency, with the Director of Industries as nodal officer. All applications route through the Single Window Clearance portal (swc.bihar.gov.in), with the State Investment Promotion Board empowered to direct concerned departments.
- •The Department provides hand-holding for BIADA land allotment, land registration and conversion for private land, and other clearances.
- •Industries on the BIIPP 2016 negative list remain ineligible under this policy.
- •Where the English and translated versions differ, the English version prevails.
Any false declaration, or incentives availed by an ineligible unit, is recoverable from the date of availing with 18% annual compound interest — as arrears of land revenue if unpaid. Units must remain operational for a minimum of 5 years from the last incentive instalment, subject to Force Majeure; early closure triggers recovery of all subsidies with the same 18% compound interest.
Key dates: Stage-I clearance applications were due on the SWC portal by 30.06.2023, and Financial Clearance applications by 30.06.2024. BIADA disposes land allotment applications within 7 working days. The policy runs 5 years from Gazette notification. Source: Draft Bihar Industrial Investment Promotion Policy (Textile & Leather Policy) 2022, File No. 4Tech./Textile policy/152/2021, Department of Industries, Government of Bihar. This is a draft policy — confirm final notified terms, capping and category classifications with the Department before filing.