Bihar Industrial Investment Promotion Policy (Textile & Leather Policy), 2022
Why the policy exists
The Bihar Industrial Investment Promotion Policy (Textile & Leather Policy), 2022 complements the existing Bihar Industrial Investment Promotion Policy (BIIPP) 2016 (amended 2020) and is aimed at making Textile/Powerloom/Silk/Garment/Leather & leatherette products/Footwear manufacturing in the State more attractive to investors. After agriculture, the textiles & leather sector is the highest employment-generating sector, and the policy seeks to establish Bihar as a competitive and favoured investment destination, achieve regional development, diversify exports, and expand livelihood opportunities through resilient economic development.
Objectives
- •Build a sustainable ecosystem for the textile and leather sector, covering the entire value chain from fibre to fashion.
- •Add value to post-production of khadi, silk, handloom and powerloom output.
- •Promote micro and small units, and establish garmenting hubs on the model of the Chanpatia Textile Garmenting Start-up Zone.
- •Incentivise larger units in hosiery, garmenting and textile processing.
- •Position Bihar as a key domestic and global investment destination for the sector.
- •Absorb skilled/semi-skilled Covid-19-returned migrant labour and create in-state opportunities for workers who had migrated for textile jobs.
Why a new, dedicated policy
- •Under BIIPP 2016, 'high priority' status required investment of at least ₹5 crore and 50 core workers, whereas textile units with just ₹2–5 crore investment can generate 150–200 jobs — this policy lowers the threshold for the sector.
- •Introduces tax-related incentives for export-oriented units unable to avail SGST benefit otherwise.
- •Adds an Employment Generation Subsidy, absent from BIIPP 2016, matching provisions already available in neighbouring states.
- •Adds a Power/Electricity rate subsidy (₹2/unit), since BIIPP 2016 offered only electricity-duty reimbursement and Bihar's effective power tariff is higher than neighbouring states.
- •Introduces provisions specific to textile & leather accessories, absent from the general industrial policy.
What qualifies, and how units are classified
Category A vs Category B Units
| Category A | Category B |
|---|---|
| Weaving, Knitting, Apparel & Garment, Apparel & Garment Accessories, Hosiery, Leather & Leatherette Garments, Leather & Leatherette Accessories, Leather & Leatherette Footwear, and all kinds of footwear | Spinning, Ginning, Textile Processing (Yarn, Printing), Man-Made Fibre, Synthetic Fibre, Polyester, Acrylic, Viscose, Rayon, Technical Textile, Leather Processing (Tanning, finishing etc.) |
Integrated Units housing more than one value-chain activity at a single location may commensurate incentives proportionately across both categories.
Industrial Unit Classification (Investment in Plant & Machinery)
| Class | Investment | Turnover |
|---|---|---|
| Micro | Up to ₹1 crore | Up to ₹5 crore |
| Small | >₹1 crore – ₹10 crore | >₹5 crore – ₹50 crore |
| Medium | >₹10 crore – ₹50 crore | >>₹50 crore – ₹250 crore |
| Large | >₹50 crore – <₹100 crore | — |
| Mega | ₹100 crore or more | — |
Sectors Covered
Incentive quantum — exact figures
A. Capital Investment Subsidy (Category A & B units)
Micro / Small / Medium / Large / Mega: 15% of plant & machinery investment, paid in 5 equal annual instalments over 5 years. Capped at ₹10 crore (Bihar component only, exclusive of any GoI-scheme incentive).
B. Freight Reimbursement Incentive (Category A & B units, exports only)
30% reimbursement on freight charges from project location to port for the first 5 years, capped at ₹10 lakh/year.
C. Employment Generation Subsidy (Category A units only)
300% of the ESI and EPF paid by the unit, payable for 5 years. Eligible units must have at least 75% of direct employees domiciled in Bihar, with a minimum of 100 such employees; trained core staff must be retained for at least 1 year.
D. Power Tariff Subsidy (Category A units only)
₹2/unit from the date of commencement of commercial production, for 5 years (inclusive of the Electricity Duty Subsidy admissible under BIIPP 2016). Claim requires SGST/IGST return documentation.
E. Patent Registration (Category A & B)
50% of expenditure incurred, up to ₹10 lakh per patent; within this, up to ₹4 lakh is admissible for filing fees, attorney fees and patent-tracking costs.
F. Additional Incentives under BIIPP 2016
| Incentive | Quantum |
|---|---|
| Interest Subvention | Up to 10% (12% for micro/small units) or actual interest rate on term loans, capped at 50% of FCI or ₹20 crore for 5 years |
| Tax-Related Incentives | 100% reimbursement of admitted SGST deposited, for 5 years |
| Stamp Duty Exemption | 100% exemption on lease/sale/transfer of industrial land or shed (first-time only) |
| Land Conversion Fee | 100% exemption on conversion of agricultural land |
| Skill Development Subsidy | ₹20,000/employee or BSDM rates; payable once, for Bihar-domiciled core employees retained ≥1 year |
Capacity building and priority traditional sectors
Bihar holds roughly 8% of India's bovine population and ~12% of its goat population (3rd largest), supporting the leather raw-material base. Bhagalpur silk is GI-tagged and the Bhagalpur cluster ranks 2nd in India (after Karnataka) in silk-fabric production & export.
Priority Traditional Sectors
Audit and structural requirements
- •Incentives are payable only after commencement of commercial production.
- •Existing units expanding/diversifying/modernizing by at least 25% of existing capacity are eligible on their incremental fixed capital investment, on par with new units.
- •A subsidised unit must remain operational for a minimum of 5 years from the date of disbursement of the last incentive instalment (barring Force Majeure); early closure triggers recovery of all subsidies availed, with 18% p.a. compounded interest.
- •Any false declaration or violation of policy conditions makes the incentive amount recoverable from the date of availing, along with interest compounded annually at 18% p.a. — recoverable as arrears of land revenue.