Establishment of

Forging and Casting Unit

for Heavy Engineering
Facilities
Heavy Engineering
Government of Gujarat
Contents

Project Concept 3
Market Potential 4
Growth Drivers 5
Gujarat Competitive Advantage 6
Project Information 9
- Location/ Size
- Infrastructure Availability/Connectivity
- Raw Material/Manpower
- Key Players/Machinery Suppliers
- Potential Collaboration Opportunities
- Key Considerations
Project Financials 14
Approvals & Incentives 17

Page 2
Project Concept

What is Forging and Casting

Forging is the application of thermal and mechanical energy to steel billets or ingots to cause
the material to change shape while in a solid state. Forged steel is generally stronger and more
reliable than castings due to the fact that the grain flows of the steel are altered, conforming to
the shape of the part. Forged components such as crankshafts and connecting rods are
extensively used in the automotive and power sectors.
Casting is the process where metal is heated until molten. While in the molten or liquid state it is
poured into a mould or vessel to create a desired shape. Some of the common casting
components are used in earthmoving equipment, internal combustion engines, turbines, boilers
and generators.

Project overview
The proposed project involves the establishment of a forging and casting facility in Sanand
Industrial Estate in Ahmedabad District for manufacturing of heavy engineering equipment
The capacity of the unit would be about 43,200 MT per annum
The proposed facility will have two main processes, namely, casting, and forging. For the
casting processes key equipment include, cupola/induction furnace, and a moulding machine.
Key equipment required in the forging processes include forging hammer and forging press
The total cost of setting up the proposed facility at Sanand is estimated to be ~INR 4020 million.
The facility will manufacture castings and forged equipment for automotive and power
companies, including crankshaft, gears, connecting rods, boilers, turbines and generators

Classification of forging and casting

Casting Forging

Die casting: Permanent mold: In

Sand casting: The
It is a type of metal this process, the
casting process is
casting wherein molten liquid metal is poured
characterized by
metal is forced into into a hole at the top
using sand as the
cavities under high of two halves of mold
mold material.
pressure. joined together.

Cold forging: It is
Hot forging: It is performed performed at room
at very high temperature in temperature. The work
order to avoid strain piece is squeezed between
hardening of the metal two dies until it has
during deformation. assumed their shape.
Source:
http://www.atcgroup.com.au/Custom Casting Forging/TheDifferenceBetweenCastingForging.aspx
http://home.sogang.ac.kr/sites/nsmlab/Couse%20Work/Lists/b8/Attachments/39/Forging%20Processes%20MEE%203024%202014.pdf
http://www.thegreenbook.com/types-of-metal-castings.htm
http://bharatforge.com/facilities/forging.html
http://www.farinia.com/forge/cold-forging/cold-forging-vs-hot-forging-considerations-benefits-and-drawbacks

Page 3
Market Potential

The global forging and casting markets are expected to grow at a

CAGR of 7.6% and 6 % respectively during 20152020
Global metal casting Global forging market 2015-2020
market 2015-2020 (billion US$)
(million MT) 155.9
116.3 111.1
77.0

2015 2020E 2015 2020E

Source: Technavio Source: Technavio
The global forging market is expected to grow at a CAGR of 7.6% and reach US$111.1 billion by
2020.
The forging market in Asia Pacific (APAC) was valued at US$46.8 billion in 2015 and is expected
to reach US$70.7 billion by 2020, growing at a CAGR of 8.6%. APAC is likely to gain market
share due to the increasing outsourcing of forging activities to developing countries with lower
labor and raw materials costs.
Demand for infrastructural development in developing countries and the emergence of India as a
manufacturing hub for the automotive industry will propel the growth of the market in APAC.
Indian forging and casting industry is poised to capitalize on its
cost competitiveness aided by steady domestic demand
Indian metal casting market 2015-2020 Indian forging market 2015-2016
(million MT) (million MT)
2.6
25.0

2.5
4%
1.67
15.0 increase
times

2015 2020E 2015 2016

Source: The Institute Of Indian Foundrymen and Source: Technavio
Fenfe Metallurgicals
The Indian forging and casting industry has emerged as a major contributor to the manufacturing
sector in the country.
With an installed capacity of around 37.7 lakh MT, Indian forging industry employs around 95,000
people.
Indian forging industry has capability to forge a wide range of raw materials, including carbon
steel, alloy steel, stainless steel, super alloy, titanium and aluminium.
Sources:
GLOBAL FORGING MARKET 2016-2020, Technavio, via EMIS, accessed 14 July 2016
GLOBAL METAL CASTING MARKET, Technavio, via EMIS, accessed 14 July 2016
Indian Forgings Sector, Spark Capital, via EMIS, accessed 14 July 2016
Status Of Indian Foundry Industry, Global casting
magazine,http://www.globalcastingmagazine.com/_pdf/5_India_final_46555.pdf, accessed 14 July 2016
http://www.indianforging.org/indian-forging-industry/

Page 4
Growth Drivers

Automotive Growth of the Indian automotive sector directly impacts the

production in forging industry as it is the largest user for forged components.
India is expected Forged parts are widely used in automobiles due to their high
strength-to-weight ratio.
to grow more Currently the automotive sector accounts for around 61% of the
than double total forging demand in India.
during FY16- There is a growing trend among global automotive original
FY20 equipment manufacturers (OEMs) to outsource components
from manufacturers in low-cost countries.

The power sector is expected to grow driven by significant

capacity additions, supported by large investments by the
Government of India (GoI) as well as foreign players.
Growing power The Indian BTG (boiler, turbine and generator) equipment
generation market is also expected to grow by eight times during FY15-22.
equipment Forged components made from steel, including boiler, turbine
market and generator due to high temperature resistance, are
extensively used in the power sector.
Rising demand for power generating equipment, especially
BTG, would boost the forging and casting demand in India.

A number of ambitious infrastructure and manufacturing

projects have been launched in India under the Make in India
The Make in campaign.
India program The forging and casting market in the country will continue to
witness steady growth in order to meet demands from these
projects.

Forged parts made of various ferrous, non-ferrous, and special

alloy materials are widely used in commercial jet planes,
Growing helicopters, military aircraft, piston-engine planes, and
aerospace spacecraft.
industry in India The Indian aerospace industry is worth US$6.2 billion and is
expected to witness a healthy rate till 2020 as Indian players
are increasing their focus on exporting aircraft parts to foreign
OEMs.
Sources:-
http://commerce.nic.in/eidb/ecomq.asp
http://www.dsir.gov.in/reports/isr1/Aerospace/8_0.pdf
http://www.nagpurtoday.in/tata-motors-arm-plans-to-expand-nagpur-facility-in-mihan/09292342
http://www.firstresearch.com/Industry-Research/Aircraft-Engine-and-Parts-Manufacturing.html Indian Electrical & Electronics Manufacturers
Association, 68TH ANNUAL REPORT 2014 2015 (September 2015), accessed via ieema.org/wp-content/uploads/2015/09/IEEMA-Annual-
Report_2014-15.pdf
http://autotechreview.com/news/item/1378-indian-forging-industry-seeks-opportunities-in-non-auto-sector.html
http://steelworld.com/focpot.pdf
GLOBAL FORGING MARKET 2016-2020, Technavio, via EMIS, accessed 14 July 2016.
GLOBAL METAL CASTING MARKET, Technavio, via EMIS, accessed 14 July 2016.
Indian Forgings Sector, Spark Capital, via EMIS, accessed 14 July 2016.
Status Of Indian Foundry Industry, Global casting magazine, http://www.globalcastingmagazine.com/_pdf/5_India_final_46555.pdf, accessed
14 July 2016.

Page 5
Gujarat - Competitive
Advantage
Robust demand for forged auto components from a growing
automobile industry in Gujarat
Gujarat has a sound base of 30 clusters comprising castings and machine tools, brass parts, oil
engines and electric motors, submersible pumps, industrial valves and bearings, auto-ancillaries.
The Government of Gujarat (GoG) plans to increase the share of automotive industries in its
overall engineering output to 10% by 2020, from the current level of 3.7%.
Setting up of large automobile manufacturing clusters in Gujarat will drive robust demand for
forged auto components.
Automobile manufacturing
clusters in Gujarat

Sanand 3 million cars

Anjar Ahmedabad to be produced annually in
Savli
Gujarat by 2020, ~50% of the
Rajkot
Indias total capacity
Okha Halol
Dholera
500+ auto
Simar
component
manufacturers in the Rajkot
district

Large auto clusters being developed

near Rajkot and Ahmedabad 46 emerging
auto clusters will be developed
Particular Symbol near Ahmedabad
Existing Auto Clusters
Emerging Auto Clusters in Special
investment Region (SIR) by 2015 23 emerging
auto clusters will be developed
Emerging Auto Clusters in SIRs by 2020 near Rajkot
Investments by key players
Investment
Company
(INR billion)
Location Investments of
Maruti Suzuki 40 Mehsana INR100-150 billion
Hero MotoCorp. 11 Halol expected during the coming
decade, owing to development
Honda India 10 Mandal
of 350 ancillary units in
General Motors ~20 Halol Sanand-Mandal-Becharaji
Tata Motors ~30 Sanand region by 2020
Ford ~60 Vadodara
Source
Manufacturing Sector Profile, (January 2013), http://www.rubberking.net/images/pdf/Manufacturing%20Sector%20Profile.pdf

Page 6
Gujarat - Competitive
Advantage
Rising demand of power generating equipment to boost forging and
casting manufacturing in Gujarat
The Gujarat Government is undertaking
Total power generation capacity in various projects in the power sector to
Gujarat (MW) significantly increase the states power
generation capacity to 31,000 MW by 2020.

CAGR: 31,000 Majority of the projects will be coal-based

29,040 thermal power plants and hence are likely to
9.2%
generate significant demand for BTG
equipment.
18,270 The following table lists some of the proposed
power plants in Gujarat:
Expected
Project
Capacity
FY14 FY17F FY20F
Mundra ultra mega power 4,000
Source: Energy and Petrochemicals plant MW
Department., Government of Gujarat
2,640
Mundra thermal power plant
MW
Sarakhadi and Sinor thermal 2,000
power plants MW
Pipavav thermal power plant 900 MW
Sugen gas-based power plant 990 MW

GoGs investments the power sector will make the state attractive
for forging and castings manufacturing.
Investments in power sector
by segment (US$ billion)

Transmission
4.6
~US$22.8 for billion1 and distribution

power capacity
additions Generation 18.2
The Blueprint for Infrastructure in
Gujarat 2020 (BIG 2020), an
integrated plan for Infrastructure
development, envisages an The Government of Gujarat intends to
investment of US$22.8 billion in invest US$18.2 billion in power
power sector. generation by 2020.
Note: 1) All currency conversions at US$ 1 = INR 66.66 as on 9 June 2016.
Source:
Review of Blueprint for Infrastructure in Gujarat (BIG 2020) Final Report Volume 1 Summary and Vision (August 2009), accessed via
http://www.gidb.org/Document/2014-12-31_112.pdf
Manufacturing Sector Profile, (January 2013), http://www.rubberking.net/images/pdf/Manufacturing%20Sector%20Profile.pdf

Page 7
 Gujarat - Competitive
Advantage
High availability of skilled manpower (engineers)
Engineering seats in Gujarat by As of June 2016, Gujarat had ~126
specialisation (Academic year 2014-15) undergraduate engineering colleges and ~70
post graduate engineering colleges with
intakes of ~68,447 and ~6,694 students per
Mechanical 23%
year, respectively.
Computer 17% More than 80% of the seats were in self-

Electronics & financed private colleges, while 15% seats

Communication 17% were in Government colleges.
Civil 14% Leading engineering colleges in Gujarat:
Indian Institute of Technology (IIT),
Electrical 13% Gandhinagar
Information Sardar Vallabhbhai National Institute of
Technology 8%
Technology, Surat
Others 8% Gujarat Technological University, Ahmedabad

Total seats: 46,069 for admission Nirma University - Institute of Technology,

through Gujarat Common Entrance Test Ahmedabad
Source: Gujarat ACPC
Other advantages
Ease of Doing Business
Gujarat is the only state in India which complies 100% with environmental
procedures.
Gujarat ranks first for ease of doing business; ranking is based on a 2015 survey
conducted by Government of Indias Department of Industrial Policy and Promotion.

Flourishing Economy
Gujarat contributes 7.2% of the Nation GDP and shows leadership in many areas of
manufacturing and infrastructure sectors.
Gujarats SDP (State Domestic Product) at current price registered a growth of 11%
during the year 2014-15.

Strategic location and excellent infrastructure

Located on the west coast of India, Gujarat is well connected to the major cities of
the world by air and sea routes.
The state has 45 ports, 12 domestic airports and 1 international airport in addition to
an extensive rail and road network.

Easy availability of raw materials

Many key industrial clusters such as foundry and forgings, machine tools, steel re-
rolled products and fabricated metal products are located in close vicinity of
industrial hubs in Vadodara.
Source
Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014
Gujarat Growth and Prosperity for All, Vibrant Gujarat website, 25 August 2014

Page 8
Project Information

Location suggested: Sanand Industrial Estate

Sanand industrial estate in Ahmedabad district is an indicative location for establishment of
casting and forging plant. Alternatively, the plant can be set up in other suitable locations in
Gujarat.
The estate has a presence of many global and domestic companies across sectors such as
engineering (including heavy engineering), automobiles and ancillary units and electronics.

Sanand industrial estate: key highlights

Area 2,000 hectares
Land price INR3,600 per sq mt (FY16)
Engineering (including heavy
electrical equipment)
Automobiles and ancillary units
Focus sectors
Engineering plastics
Semiconductors
Electronics
Existing major Amtek Auto Limited (India)
forging and Alston Bharat Forge (France)
casting Allied Mineral Products (US)
players (base Inductotherm (India)
country) Bao Steel (China)
Source: IFSC Code

Raw Material
Gujarat is rich in key mineral resources which are required in casting and forging units. Sanand is
well connected by state and national highways and Broad Gauge (BG) railway network to all sites
and ports in the state.
Below is a list of sites of key raw materials used in casting and forging units:

Mineral Site (distance from Sanand in km)

Fire clay Bhavnagar (159), Junagarh (305), Rajkot (203),
Sabarkantha (136) and Surendranagar (98).
Manganese ore Halol (164.5)

Bauxite Junagarh (305) and Jamnagar (296)

Limestone Vadodara (136), Surat (288), Junagarh (305)

and Amreli (232)

Source:
Government of India Ministry of MSME District Industrial Potential Survey Report of Ahmedabad District (2013-14), MSME
Development Institute (December 2014)
Minerals Resources in Gujarat, Important India website, http://www.importantindia.com/4715/minerals-resources-in-gujarat/, accessed
16 July 2016.

Page 9
Project Information

Casting process1
2. Sand mould 4. Casting
1. Pattern making and core 3. Metal melting and
making separation

5. Removal of
7. Sand recovery
runners and 6. Finishing
and reclamation
risers

Key equipment required1

Cupola/Induction furnace Moulding machine

Forging process2

1. Cutting raw 2. Heating the 3. Press in 4. Trimming

materials cut blanks hammer and piercing

7. Cleaning or
5. Heat treatment
6. Testing scale
for normalizing
removing

Key equipment required2

Forging Hammer Forging Press

Note: The process depicted is illustrative and may involve further sub-steps and other processes as
well
Source:
1-http://www.castingstechnology.com/public/documents/000000000000129.pdf
2-http://www.wesman.com/index.php/ladles-and-ladle-pre-headers
http://www.vijayfoundryequipments.com/foundry-equipment.html
http://www.dcmsme.gov.in/reports/mechanical/gearblanksmanufacturing.pdf
http://www.sidbi.com/sites/default/files/Cluster%20Profile%20Report%20-%20Pune%20(Forging)%20Cluster.pdf

Page 10
Project Information

Equipment and machinery requirement

Casting Forging
1 Air Compressor capacity 1 Heavy Duty Lathe Machine
1 Bench Drilling Machine 1 Double ended pedestal Grinder
1 Crane capacity 3 tonnes with 20 HP motor 1 High speed shaping machine
1 Die making machine 1 Normalising furnace electrically operated
1 Induction Furnace 150 Kg capacity 1 Oil fired pre-heating furnace
1 Moulding Machine with 5 HP motor 1 Pillar type drill machine
2 Double ended grinder with 2 HP motor 1 Pneumatic power hammer
1 Arc welding machine 1 Power hacksaw
1 Bench drilling machine 1 Rockwell hardness tester
1 Fettling and cutting tools 1 Self-contained friction drop hammer cap
2 Sand mixer (100 Kg cap.) with 5 HP motor 1 Shot blasting chambers
2 Weighing scale 500 Kg cap. 1 Trimming power press 60 ton cap with 5 HP motor
and accessories
1 Mould cooler Tools, Dies and Equipments

Test laboratory equipment in-house

Universal testing machine Laboratory scale weighing machine
Hardness testing machine Chemical Testing Equipments with accessories
Centrifugal testing machine Sand Testing Machine

Manpower required
Designation Number of employee
Manager (Technical) 52
Supervisors (Technical) 104
Store-keeper 52
Clerk-cum-Typist 52
Peon 52
Watchman 52
Skilled workers 209
Semi-skilled workers 209
Helpers 417
Source
http://www.dcmsme.gov.in/publications/pmryprof/meatllurgical/ch24.pdf

Page 11
Infrastructure Availability

Infrastructure Availability

Water Power

Gujarat Industrial Development Uttar Gujarat Vij Company Ltd. (UGVCL) is

Corporation (GIDC) will provide water to
the proposed facility.
As per norms GIDC will provide 13.5 KL
water per hectare area of land allotted.
the power provider.
A 66 KV substation is located within the
estate and a 400/220/66KV substation is
expected to be operational by FY17-18.

Gas

Gujarat State Petronet Ltd. (GSPL) is the gas supplies to the estate through a well
established pipeline.

Logistics and connectivity

Rail Road

Sanand has the advantage of a broad
gauge railway network.
The nearest railway station is at
Ahmedabad at a distance of 40 km from
the Sanand.
National Highways: NH8A, which connects
Ahmedabad to Saurashtra and Kutch, passes
through Sanand.
State Highways: SH17 connects Ahmedabad
to Sanand and joins NH 8A leading to Kutch.
SH-144, SH-135 and SH 74 are the other
important linkages within Sanand.

Air Port

Ahmedabad International Airport is the Sanand is connected to the following

nearest airport located at a distance of ports in Gujarat:
30 Km from Sanand. Dahej - 270 Km
There are domestic airports located in Kandla - 274 Km
Baroda and Surat. Hazira - 310 Km
Mundra - 324 Km
Source:
Government of India Ministry of MSME District Industrial Potential Survey Report of Ahmedabad District (2013-14), MSME Development
Institute (December 2014)

Page 12
Key players

Key players and Machinery Suppliers

Player Plant location Key products

Camshaft
Ramkrishna Gear box
Jamshedpur, Jharkhand
Steering Components
Forgings Limited Howrah, West Bengal
Front Axle Beams
Railway tyres

Sanand, Gujarat
Gurgaon, Haryana Flywheel Ring Gears
Alwar, Rajasthan Machining
Amtek Auto Limited Pune, Maharashtra Forging
Solan, Himachal Casting Aluminium(HPDC and GDC)
Pradesh Casting Iron(HPDC and GDC)
Tamil Nadu, India

Sanand, Gujarat
Steel Forgings
Pune, Maharashtra
Bharat Forge Finished Machined Crankshafts
Satara, Maharashtra
Front Axles assembly and components
Baramati, Maharashtra

Forgings
Mahindra CIE Pune, Maharashtra Castings
Stampings

Brake Drums
Gudur, Andhra Pradesh Shackles
Nelcast
Ponneri, Tamil Nadu Ductile Iron Fittings
Inserts/Shoulders for Concrete Sleepers

Key Machinery Suppliers

Supplier Name Key products Nearest Location

Lekh Engineers Hydraulic press machine Ahmedabad, Gujarat

Forging Hammer Dehgam, Gujarat

Bharat Steel Works
Machine
Adore Multiline Ahmedabad, Gujarat
Cupola furnace
Products
Shusa Psm Cnc Ahmedabad, Gujarat
CNC Machine
Technology

Page 13
Key Considerations

Potential collaborations

Company Headquarters Plant location Nature of collaboration

Horizontal integration
Amtek Auto Ltd UAE Sanand, Gujarat JV/Partnership/M&A
Horizontal integration
Inductotherm US Sanand, Gujarat JV/Partnership/M&A
Horizontal integration
Bosch Germany Sanand, Gujarat JV/Partnership/M&A
Ford US Sanand, Gujarat Supply/purchase agreement

Tata Motors India Sanand, Gujarat Supply/purchase agreement

Key considerations

The existence of many vendors has increased market competition, especially in terms of
pricing. Customers expect high-quality forged parts with complementary features at a low price.
Metal casting requires much more energy for plant operation. Natural gas is preferred over
electricity for treating metals.
Fluctuating raw material prices disrupt the pricing strategy and profitability of machine tool
manufacturers.
Uninterrupted power supply is required to meet the continuous high energy demand from the
sector.

Source:
Annual Report 2015, Bharat Forge

http://www.alstom.com/press-centre/2015/5/production-starts-at-alstom-bharat-forges-new-turbine-and-generator-manufacturing-
facility-in-india-/
http://www.electroseelsteels.com/investor-relations/pdf/annual-report-2014-15.pdf

http://www.mahindracie.com/images/pdf/resources/financial_results/2014-15/annual_report_2014_2015.pdf

http://www.ramkrishnaforgings.com/annual_report/annual-report-13-14.pdf

http://www.indiamart.com/shusa-psm-cnc-technology/profile.html

http://dir.indiamart.com/impcat/plastic-molding-machines.html

http://dir.indiamart.com/impcat/plastic-injection-moulding-machine.html

http://www.indiamart.com/proddetail/forging-hammer-machine-10858416648.html

Page 14
Project Financials

Project cost
Project components and specifications Cost (INR million)
Land1 (Area: approximately 30 acre) 437
Rate: (INR 3600 per sq. mtr.)
Building, plant and machinery 2435

Working capital investments and miscellaneous expenses 1151

Total investment required : ~INR 4020 million

Means of finance
Estimated Debt percentage 70%
Debt raised (INR million) for capital 2010
Equity invested (INR million) including Working Capital 861.6
Estimated debt raised (INR million): ~ 2010
Notes:
The total project cost of setting up a forging and casting unit for heavy engineering facilities is
~INR4020 million .
The facility will manufacture castings and forged equipment for automotive and power
companies, including crankshaft, gears, connecting rods, boilers, turbines and generators.
Averages of the financials, including fixed cost as a percentage of total cost, of comparable
companies/projects were considered.
All numbers are inflation adjusted.
Estimated Pay back period 7.1 years
The financials were taken from CapIQ.
Average of capacity of comparable projects/plants was considered for the proposed plant.
Figures for manpower, initial investment and plant area for comparable projects were adjusted
as per the considered capacity of the project. The respective averages were then considered
for calculations.
Source
http://218.248.11.68/industries/MOU/RSB%20TRANSMISSION%20(I)%20LTD.pdf
http://www.frost.com/prod/servlet/market-insight-print.pag?docid=99964784
http://www.business-standard.com/article/companies/rsb-to-set-up-rs-365cr-plant-in-cuttack-106121201072_1.html
http://www.business-standard.com/article/pti-stories/alstom-bharat-forge-begins-production-at-sanand-plant-115052600975_1.html
http://indianexpress.com/article/business/companies/greek-snack-maker-chipita-invests-rs-600-cr-in-sanand/
http://www.sebi.gov.in/dp/ramkrishnafinal.pdf
http://www.nelcast.com/doc/Annual_Report_2014-15.pdf
http://218.248.11.68/industries/MOU/RSB%20TRANSMISSION%20(I)%20LTD.pdf
http://www.business-standard.com/article/companies/rsb-to-set-up-rs-365cr-plant-in-cuttack-106121201072_1.html
http://www.frost.com/prod/servlet/market-insight-print.pag?docid=99964784
http://www.sebi.gov.in/dp/nelcast.pdf
http://www.ramkrishnaforgings.com/annual-report.html
http://www.ramkrishnaforgings.com/investors/annual-reports/annual-report-14-15.pdf
http://www.ramkrishnaforgings.com/forgings.html
http://www.electrosteelcastings.com/esl/configuration.asp
http://www.electrosteel.com/group-companies/electrosteel-steels.aspx
http://www.electrosteelsteels.com/investor-relations/pdf/annual-report-2014-15.pdf

Page 15
Approvals

Indicative list of Approvals

Approvals/clearance required Department to be approached and consulted
Incorporation of company Registrar of companies
Registration/Industrial license Secretariat if industrial assistance (SIA) for large and medium scale
industries

Allotment of land State industrial development corporation

No objection certificate (NOC) under air and
water pollution control acts
Approval of construction and country
planning
Finance
Registration under state sales tax act and
Central and State excise act
Code number for export and import
State pollution control board
Town and country planning
Municipal and local authorities
Chief inspector of factories
Pollution control board
Electricity board
For loans higher than INR 1.5 crore, all India financial institutions like
Industrial Development Bank of India(IDBI), Industrial Credit and
Investment Corporation of India(ICICI), Industrial Finance Corporation of
India(IFCI) etc.
Sales tax department
Central and state excise department
Regional office of director general of foreign trade

Environmental clearance Ministry of environment, forest and climate change after conducting
environment impact assessment (EIA) for any project
Hazardous waste import and export approval Ministry of environment, forest and climate change
Exiting business Ministry of corporate affairs

Government of Gujrat has introduced single window facilitation portal for investors providing
undermentioned benefits:
Centralized system to monitor applications.
User friendly and simplified application process for investors.
System for authorities and investors to check the status of applications.
Increased departmental ownership.
The unit shall be facilitated through Investor Facilitation Portal for obtaining all the
necessary state approvals/ clearances - https://www.ifpgujarat.gov.in

Source
Gujarat Textile Policy, Industries and Mines Department, Government of Gujarat, 5 September 2012
Approvals required for setting up plant,
http://dipp.nic.in/English/Investor/Investers_Gudlines/approval_clearances_required_for_new_projects.pdf, accessed 8 July 2016
Environment clearance http://envfor.nic.in/major-initiatives/environmental-clearances, accessed 8 July 2016
Gujarat single window clearance, https://www.ifpgujarat.gov.in/portal/jsp/aboutUs.jsp, accessed 8 July 2016
Exiting business, http://www.mca.gov.in/MinistryV2/CloseCompany.html, accessed 9 July 2016
Manufacturing Sector Profile, Vibrant Gujarat website, 7 October 2014
Industries Commissionerate website, http://ic.gujarat.gov.in/?page_id=3175, accessed on 1 June 2016
Textile industry welcomes amended TUFS, Business Standard, 2 January 2016
Approvals http://dipp.nic.in/English/Investor/Investers_Gudlines/FAQ_GrantIndustrialLicence.pdf, accessed 27 June 2016
List of defence equipment requiring industrial license, http://dipp.nic.in/English/acts_rules/Press_Notes/pn3_2014.pdf

Page 16
Approvals / Incentives

Gujarat Industrial Policy 2015

Government of Gujarat has announced an ambitious Industrial Policy, in January 2015, with the
objective of creating a healthy and conducive climate for conducting business and augmenting the
industrial development of the state.
Quantum of incentives
The incentives under this policy will be available to all the Talukas listed in Government Resolution
dated 25/7/2016 except areas falling within municipal corporations.

% of eligible fixed
Category of % of Net VAT % of Net VAT to be
capital investment Incentive period
Project Location reimbursement to paid to
entitled for (no. of years)
(Taluka) the unit Government
Incentive
1 100 90 10 10
2 80 80 20 10
3 70 70 30 10

Net VAT Incentives

Net VAT incentive will be reimbursed to the industrial undertaking in one financial year will not
exceed one-tenth of the total amount of eligible incentive.
Classification of the Project Amount (in INR crore)
Ultra Mega Industrial Unit 500
Mega industrial Unit 400
Large Industrial Unit 150
Micro, Small or Medium Industrial Unit 50

Industries in the manufacturing sector can opt for either the general incentives under the
Gujarat Industrial Policy- 2015 or the incentives as provided below:

As per the Gujarat Industrial Policy 2015, following are the key incentives provided to the labour
intensive industries such as forging and casting industry:
Interest Subsidy :7% maximum up to INR 1 crore per annum for a period of 5 years.
VAT related incentives: Only 70% of eligible fixed capital investment of eligible unit will be
considered for reimbursement. The eligible unit shall be entitled for reimbursement up to 1/5th of
eligible limit in a particular year.
Payroll assistance will be provided @INR1,200 per person & additional INR 300 per women
employment. In case of expansion this payroll assistance will be provided only for additional
domicile employees.
Assistance will be eligible to new enterprise as well as to existing enterprise for one time
expansion.

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 Ministry of Heavy Industries and Public Enterprises
http://dhi.nic.in/UserView/index?mid=2409

Industries & Mines Department

www.imd-gujarat.gov.in

Gujarat Industrial Development Corporation

www.gidc.gov.in

Office of Industries Commissioner

www.ic.gujarat.gov.in

Industrial Extension Bureau

www.indextb.com

This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope.
It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision.

Office of The Industries Commissionerate

Block No. 1, 2nd Floor, Udyog Bhavan,
Gandhinagar 382 010. Gujarat
Ph.: 23252683/23252617
Email ID: iccord@gujarat.gov.in