Madhya Pradesh Industrial Promotion Policy 2025
40% → 10%
BIPA, Sliding by Project Size
₹200 Cr
Maximum BIPA per Project
1.0 – 1.5×
Export, Employment, FDI & Geographical Multiples
5 Years
Policy Currency from Notification
What the policy is, and what it's aiming at
Madhya Pradesh's GSDP grew at a 12.49% CAGR over five years to ₹13,63,327 crore in 2023-24, with manufacturing up 7.4%. This policy is DIPIP's instrument for the next leg — targeting a $2 trillion state economy by 2047 with an interim GSDP goal of about $305 billion by 2028-29, raising industry's share of state GDP from ₹2.9 lakh crore to ₹5.4–5.9 lakh crore, and creating around 20 lakh new jobs over five years. It runs 5 years from notification, operationalised through a separate MP Industrial Investment Promotion Scheme 2025.
Check which of the two 2025 MP policies governs the unit before modelling anything. A "Large Scale Industrial Unit" here is explicitly one not classified as MSME under the MSMED Act 2006. MSME-classified investments — including in identical sectors like food processing, textiles or pharma — fall under the separate MP MSME Development Policy 2025, which carries its own assistance rates and multiplier tables. Getting the classification wrong at DPR stage means modelling incentives off the wrong policy entirely.
Unit classification and Mega thresholds
| Category | Threshold |
|---|---|
| Large Scale | A manufacturing enterprise not classified as MSME under the MSMED Act 2006 |
| Mega Scale — general | Investment above ₹500 crore in plant and machinery |
| Mega Scale — priority blocks / high-potential sectors | Above ₹250 crore — any large unit in a priority block, plus personal care and cosmetics, petrochemicals, pharma and biotech, renewable energy equipment, telecom and networking products |
| Mega Scale — specific sectors | Above ₹75 crore — agri/dairy/food processing, furniture, garment/footwear/toys/accessories, gems and jewellery, herbal and minor forest produce, high-value-add manufacturing |
Focus sectors: aerospace and defence, agri/dairy/food processing, automobile and components, biotechnology, engineering, EV manufacturing, garment and apparel/footwear/toys/accessories, high-value-add manufacturing, logistics and warehousing, medical devices, pharmaceuticals, renewable energy equipment, textiles. A new large unit needs an intention-to-invest proposal with MPIDC, IEM Part-A and Part-B from DPIIT, a new electricity connection and GST registration. Eligible investment window: up to 3 years before commercial production and within 1 year after.
Basic Investment Promotion Assistance and its multipliers
BIPA runs from 40% down to 10% of Eligible Fixed Capital Investment as EFCI rises — a formula-driven taper, not a flat rate — capped at ₹200 crore and disbursed in 7 equal annual instalments.
| EFCI (₹ Crore) | Effective % | BIPA (₹ Crore) |
|---|---|---|
| 50 – 85 | 40% | 20 – 33.6 |
| 100 | 36% | 35.9 |
| 150 | 29% | 43.4 |
| 200 | 25% | 50.8 |
| 300 | 22% | 65.1 |
| 500 | 18% | 91.4 |
| 700 | 16% | 115 |
| 1,500 | 12% | 180.1 |
| 2,000 and above | 10% | 200 (capped) |
The headline 40% only ever applies at the small end of "Large Scale". A ₹100 crore project already sits at 36%, ₹500 crore at 18%, and anything above ₹2,000 crore is pinned at the 10% / ₹200 crore ceiling. Combined with the fact that the Gross Supply, Export and Employment multiples can each independently reduce assistance for underperformance — not merely fail to enhance it — the realistic figure has to be modelled off the Annexure-II curve, not assumed from the headline range.
The four multipliers
| Multiplier | Rule |
|---|---|
| Gross Supply Multiple | Year 1: 1 if capacity utilisation is at least 40%. Year 2 onward: 1 if production is at least 75% of the previous peak year or 50% of installed capacity, whichever is more. Shortfall reduces assistance proportionately. |
| Export Multiple | 1.0 to 1.3 for exports of 25% to 75% of production. SEZ units fixed at 1.0. Formula: EM = IF(Export% < 25%, 1, IF(Export% < 75%, 1 + 0.3×(Export% − 25%)/50%, 1.3)) |
| Employment Multiple | 1.0 to 1.5 across 100 to 2,500 employees. EYM = MAX[1, MIN(1.5, 1 + (AE − 100) × (0.5/2400))], where AE is average monthly headcount |
| Geographical Multiple | 1.3 for units in priority blocks — except cement units, fixed at 1.0 |
| FDI Multiple | 1.1 to 1.2 for 26–50% FDI equity, fixed 1.2 above 50%. FDI Multiple = IF(FDI < 26%, 1, IF(FDI ≤ 51%, 1.1 + (FDI − 26)×(0.1/25), 1.2)) |
EFCI — what counts
FCI is investment in all fixed assets excluding land. EFCI includes plant and machinery per the MSMED Act (excluding old machinery and separately-counted pollution-control equipment); factory sheds and buildings excluding compound wall, internal roads and dwellings; in-house R&D capped at 40% of plant, machinery and building (50% for pharma and biotech) if DSIR-registered; 50% of captive renewable power cost capped at 20% of P&M plus building where at least half the power is self-consumed; 20% of energy-saving device cost capped at 20%; and imported second-hand machinery with at least 10 years' expected life.
Other assistance and additional incentives
| Line | Rule |
|---|---|
| Power tariff rebate | Per MPERC's annual tariff orders, for units buying from DISCOMs or grid |
| Green Industrialisation | 50% capital subsidy, max ₹5 crore for waste management, ETP, STP and pollution control; max ₹10 crore for ETP with Zero Liquid Discharge. Two equal annual instalments |
| Infrastructure Development | 50%, max ₹5 crore, for power, water, gas pipeline, road, drainage and sewage up to the factory gate, on private or undeveloped government land |
| IPR reimbursement | 100% of patent, copyright, trademark and GI filing cost, max ₹10 lakh per unit, in the first 5 years |
| Organic certification | 100% reimbursement through APEDA-accredited agencies, max ₹5 lakh per unit, first 5 years |
| Differently-abled employment (≥5% of workforce) | 100% skill-development reimbursement at government ITIs; EPF/ESI reimbursement up to ₹6,000 per month or actuals for 5 years; insurance premium reimbursement where not covered under Ayushman Bharat |
| FDI technology transfer | 50% reimbursement of international technology transfer cost, max ₹1 crore, where it develops a local vendor |
| Industrial housing | PPP worker housing near industrial areas with VGF support up to 40%, offered to units on rental basis |
| Export freight subsidy | 50% of transport cost to seaport or air cargo, max ₹40 lakh per unit per year for 5 years, overall cap ₹2 crore |
| Standalone R&D units | CSIR/DSIR-recognised: 25% reimbursement of FCI excluding land, max ₹25 crore, in 4 equal annual instalments |
Expansion, diversification and technological upgradation
| Route | Qualifying condition |
|---|---|
| Expansion / Diversification | Minimum 30% of existing investment (not less than ₹20 crore) or ₹100 crore, whichever is lower; expansion additionally needs at least 20% capacity increase. Window: last 2 years plus 1 year after commercial production |
| Technological Upgradation | Same 30% / ₹20 Cr / ₹100 Cr test, production-related only; unit must have been in commercial production at least 7 years without a product change. Eligible only for IPA at 10% of EFCI, capped ₹20 crore, in 7 equal instalments |
Ten sector-specific layers on top of the base
Every sector below carries BIPA-with-multipliers, Infrastructure Development, Green Industrialisation, IPR and organic certification assistance, the disability-employment incentive and the additional incentives as standard. The table isolates what is additional to that common base.
| Sector | Additional layer |
|---|---|
| Agri, Dairy & Food Processing | 1.5× BIPA; power tariff reimbursement ₹1/unit for 5 years; 100% mandi fee reimbursement capped at 50% of P&M investment or 5 years; quality certification 50% or ₹5 lakh over 5 years |
| Textiles | 5% interest subsidy on term loan for P&M for 5 years, max ₹50 crore; 25% subsidy (max ₹50 lakh) for an Apparel Training Institute |
| Garment, Apparel, Footwear, Toys, Accessories | Employment Generation Assistance up to ₹5,000 per employee per month for units above 250 employees; one-time training reimbursement ₹13,000 per new employee (max 4,000); 5% interest subsidy for 7 years, max ₹50 crore; 50% concession on MPIDC development charge; stamp duty reimbursement on leased land; power tariff ₹1/unit for 5 years. Total cap 200% of FCI |
| Aerospace & Defence | 25% concession on development charge; quality certification 50% or ₹10 lakh, whichever lower |
| Pharmaceuticals | 1.3× BIPA for API and bulk drugs; in-house R&D counted in EFCI up to 50%; quality certification 50% or ₹1 crore over 5 years; a 2-year slack period before the incentive clock starts; testing facility subsidy 50%, max ₹1 crore |
| Biotechnology | Testing facility subsidy 50%, max ₹1 crore; Biotechnology Parks eligible for Private Industrial Park incentives |
| Medical Devices | 1.3× BIPA; testing facility subsidy 50%, max ₹1 crore; anchored by the Medical Devices Park at Vikram Udyogpuri, Ujjain |
| EV Manufacturing | 1.3× BIPA; in-house testing including battery testing counted in EFCI up to 50%; quality certification 50% or ₹1 lakh per model capped ₹10 lakh; 25% concession on development charge |
| Renewable Energy Equipment | 50% concession on development charge; quality certification 50% or ₹1 lakh, whichever lower |
| High Value-Add Manufacturing | 1.3× BIPA; training reimbursement ₹13,000 per new employee for units above 250 employees (max 4,000); quality certification 50% or ₹1 lakh |
Private parks, plug-and-play and governing conditions
Private Industrial Park developers — 10 acres or more, minimum 5 units
| Assistance | Rule |
|---|---|
| Stamp duty & registration | 100% reimbursement |
| Fixed capital assistance | 50% of fixed capital investment or ₹20 lakh per acre excluding land and dwellings, whichever less, capped ₹40 crore. Released in 2 milestone instalments: 50% on infrastructure completion, 50% after 5 units are established |
| Green Industrialisation | 50% / ₹5 Cr for waste management and 50% / ₹10 Cr for ZLD, as in the general framework |
Plug-and-play infrastructure
| Assistance | Rule |
|---|---|
| Fixed capital assistance (developer) | 25% of fixed infrastructure cost or ₹25 crore, whichever lower, in 3 milestone instalments: 50% on construction completion, 25% at 25% occupancy, 25% at 40% occupancy |
| Common Facility Centres | 25% capital assistance, up to ₹25 crore |
| Units occupying plug-and-play space | 50% rental subsidy for 5 years, max ₹10 per sq ft per month |
Two silent disqualifiers sit underneath every line above. A project modelled purely on BIPA-plus-multipliers still fails outright if the workforce plan does not clear the mandatory 70% Madhya Pradesh domicile employment condition. And where a project could also qualify under another State department policy, it must formally elect one route — going back later is not possible unless that other policy expressly states its benefit sits over and above IPP 2025. Both belong in the DPR-stage conversation, not the claim stage.
- •MPIDC is the nodal agency; investors register via the Single Window System and quote their Intention to Invest Number to claim incentives.
- •Units sanctioned under IPP 2014 or earlier, or that commenced production before this policy's notification, are not eligible.
- •Total investment assistance cannot exceed FCI — with a 200% cap specifically for garment, toy, footwear and accessories units.
- •GoI assistance may stack on top provided cumulative assistance stays within the FCI cap.
- •False declarations or ineligible availing trigger recovery with 10% per annum compound interest from the date of availing.
- •Ineligible industries include mining without value addition, beer and liquor (excluding winery and microbrewery), pan masala and gutka, tobacco, charcoal, power generation plants, publishing and printing, sawmilling, slaughterhouses, stone crushers and mineral grinding (except M-Sand and ready-mix concrete), and Central or State Government undertakings.
Governance: the Cabinet Committee on Investment Promotion, chaired by the Chief Minister with MPIDC as secretariat, sanctions customised packages beyond the policy — available only to Mega Industrial Units. The State Level Empowered Committee, headed by the Chief Secretary with MD MPIDC as Member Secretary, determines assistance eligibility within those packages. Source: MP Industrial Promotion Policy 2025, DIPIP, Government of Madhya Pradesh, with Annexures I–V. Procedure and documentation are deferred to the separate MP Industrial Investment Promotion Scheme 2025.