How state packages work
Most large states run a general industrial policy, often with sector policies on top (electronics, EVs, clean energy, life sciences, IT and GCCs). The usual instruments are:
- Capital subsidy: a share of eligible fixed capital investment, often paid in instalments over many years.
- SGST reimbursement: a refund of state GST, usually offered as an alternative to the capital subsidy, not in addition.
- Stamp duty and registration: full or partial exemption on land and lease deeds.
- Power: electricity duty exemption or tariff support.
- Payroll and EPF: reimbursement of employer contributions or salary support, often limited to employees domiciled in the state.
- Customised packages: large, mega and ultra-mega projects can negotiate terms. Maharashtra’s Cabinet Sub-Committee sanctions such packages.
The six instruments, with examples
The examples below are from Uttar Pradesh’s Industrial Investment and Employment Promotion Policy 2022 and Maharashtra’s Industry, Investment and Services Policy 2025. Each state sets its own package, graded by district and project size, and terms differ by state.
| Instrument | How it works | Example |
|---|---|---|
| Capital subsidy | A share of eligible investment, paid over the incentive period | Maharashtra 2025 caps capital subsidy for eligible units at the lower of ₹25 crore or 20% of eligible investment, and at ₹5 crore a year |
| SGST reimbursement | The state refunds its share of GST paid on sales | Uttar Pradesh 2022 reimburses 100% of net SGST for 6 years (large projects) to 16 years (ultra-mega), within annual and overall ceilings set as a share of eligible capital investment |
| Stamp duty, registration and land | Relief on land purchase and lease deeds | Maharashtra 2025 exempts 100% of stamp duty for new and expansion units in its Group C, D and D+ areas, and waives 50% on the first lease or conveyance deed in Groups A and B |
| Electricity duty and tariff | Exemption from electricity duty and, in some areas, a tariff subsidy | Eligible new MSMEs in Maharashtra’s Group C, D and D+ areas are exempt from electricity duty for the incentive period; new units in Groups D and D+ get ₹1 per unit for three years, capped at ₹1 crore |
| Payroll and provident-fund support | Support linked to jobs created | Maharashtra reimburses 50% of the employer’s EPF contribution for 5 years, up to ₹5 crore per unit, where a unit in Groups D and D+ creates more than 20 jobs per ₹1 crore invested |
| Custom packages and single window | Large projects can negotiate beyond the published menu | Maharashtra’s Cabinet Sub-Committee sanctions customised packages for large, mega and ultra-mega projects of strategic importance; Uttar Pradesh’s Nivesh Mitra single window offers 353 services of 29 departments |
General industrial policies
| State | Policy | Main terms |
|---|---|---|
| Maharashtra | Industry, Investment and Services Policy 2025 (five years from notification) | Capital subsidy capped at the lower of ₹25 crore or 20% of eligible investment, and ₹5 crore a year; Investment Promotion Subsidy on 100% of gross SGST for eligible MSMEs and Special LSI units; 100% stamp duty exemption in Groups C, D and D+; six Ultra Mega Industrial Parks of at least 5,000 acres |
| Uttar Pradesh | Industrial Investment and Employment Promotion Policy 2022 (five years) | Capital subsidy of 10–30% of eligible capital investment over 10–20 years, or 100% of net SGST for 6 years (large) to 16 years (ultra-mega), within ceilings; stamp duty exemption 50–100% by region |
| Tamil Nadu | Industrial Policy 2021 (validity extended) | 100% SGST reimbursement for 15 years, or a capital subsidy of up to 25% paid over up to 15 years; training subsidy ₹4,000 a worker a month for six months (₹6,000 for women and specified groups); SIPCOT land at a 10–50% concession |
| Karnataka | Industrial Policy 2025-30 (five years from 8 Feb 2025) | Capital subsidy of 10–25% of fixed capital investment by zone, or a production-linked incentive of 1.0–2.5% of net sales for seven years; stamp duty exemption for eligible projects |
| Odisha | Industrial Policy Resolution 2022 | 140 industrial estates of about 13,000 acres |
Maharashtra adds, for 2025 policy units: a 50% stamp duty waiver on the first lease or conveyance deed in Groups A and B; electricity duty exemption for eligible new MSMEs in Groups C, D and D+; ₹1 per unit for three years (capped at ₹1 crore) for new units in Groups D and D+; and 50% of the employer’s EPF contribution for five years, up to ₹5 crore per unit, where a Group D or D+ unit creates more than 20 jobs per ₹1 crore invested.
GCC policies
Six states offer support aimed at global capability centres. Detail and location comparisons are on GCC locations.
| State | Policy | Main terms |
|---|---|---|
| Maharashtra | GCC Policy 2025, valid to FY2029-30; guidelines notified August 2026 | Capital subsidy up to 20% (capped ₹10–100 crore) or rent support of 10% (Mumbai/Pune) or 20% (rest of state), capped ₹1–4 crore a year; payroll support of 40% or 50% of salary above ₹1 lakh a month, up to ₹50,000 per employee a year for 100 employees for three years; stamp duty relief 75–100% in IT parks, SEZs and STPIs; units must operate 10 years |
| Tamil Nadu | Special Scheme for GCCs, G.O.(Ms.) No. 34 of 12 Mar 2024 | Payroll subsidy of 30%, 20% and 10% in years 1–3 on basic wages of jobs paying ₹1 lakh a month or more, for Tamil Nadu-domiciled staff; parent in Forbes Global 2000 or Fortune 1000; 200 direct jobs; runs 1 Apr 2024 to 31 Mar 2027 for up to 50 GCCs |
| Uttar Pradesh | GCC Policy 2024, notified 7 May 2025 | Capital subsidy 25% (up to ₹10 crore Level-1, ₹25 crore Advanced GCC); land subsidy 30–50%; full stamp duty exemption; 20% opex reimbursement up to ₹40–80 crore a year; payroll reimbursement for three years (four outside Gautam Buddha Nagar and Ghaziabad); 5% interest subsidy |
| Gujarat | GCC Policy 2025-30, in force to 31 Mar 2030 | Capex up to 20% (buildings) and 30% (IT hardware, software), ceiling ₹50 crore; opex up to 15%, capped ₹20 crore a year for five years; job incentive up to ₹50,000 (men) or ₹60,000 (women); EPF 75–100% for five years |
| Odisha | GCC Policy-2025, five years from 31 Dec 2025 | Lease rental up to ₹2,000 per employee a month for five years; 100% of employer ESI and EPF for Odisha-domiciled staff for five years; 5% interest subsidy; power at ₹2 per unit reimbursed |
| Karnataka | GCC Policy 2024-29 | Innovation lab or centre-of-excellence support up to ₹5 crore in Bengaluru Urban; up to 75% of cost, capped ₹3 crore, in six named clusters including Mysuru and Mangaluru; 100% electricity duty reimbursement |
Technology and electronics
- Gujarat: the Electronics Component Manufacturing Policy 2025 gives projects approved under the central ECMS a 100% top-up on central support, paid within 30 days of the central release. The IT/ITeS Policy 2022-27 offers capex support of 25% (up to ₹50 crore below ₹250 crore of investment) and opex support of 15% (up to ₹20 crore).
- Uttar Pradesh: IT & ITeS Policy 2022 offers a capital subsidy of 10% of fixed capital (minimum ₹5 crore), up to ₹50 crore, and a 7% interest subsidy.
- Maharashtra: IT/ITeS Policy 2023, effective 27 June 2023 for five years, offers stamp duty exemption of 100%, 75% or 50% by zone and electricity duty exemption.
- Andhra Pradesh: IT & GCC Policy (4.0) 2024-2029 offers nominal-price land to Fortune- or Forbes-listed firms, or those with USD 1 bn of market capitalisation or revenue, that commit at least 3,000 jobs within three years and 500 jobs per acre.
- Tamil Nadu: for R&D projects, 50% reimbursement of land cost for up to 20 acres and 50% of IP-creation costs up to ₹1 crore.
Sector policies
| State | Policy | Main terms |
|---|---|---|
| Uttar Pradesh | EV Manufacturing and Mobility Policy 2022 | 30% capital subsidy, capped ₹1,000 crore over 20 years, for the first two integrated EV and ultra-mega battery projects; 20% for the first five mega projects |
| Haryana | EV Policy 2022 (five years from 10 Jul 2022) | 20% of fixed capital, capped ₹20 crore, for the first three mega units, or 50% net SGST for 10 years; 100% electricity duty exemption for 20 years |
| Rajasthan | Integrated Clean Energy Policy 2024 | 100% electricity duty exemption for seven years; 75% stamp duty exemption plus 25% reimbursement; government land through RREC |
| Uttar Pradesh | Green Hydrogen Policy 2024 | Capital subsidy of 10–30% of eligible capital investment; 35% or 40% for the first five super mega or ultra mega projects outside Meerut Division |
| Telangana | Next-Gen Life Sciences Policy 2026-30 | 100% net SGST for five years; 100% stamp and transfer duty reimbursement; 25% of land cost (cap ₹10 lakh) |
Tamil Nadu’s FinTech Policy 2021 expired on 31 December 2025, and its incentives ended with it.
Conditions that decide eligibility
- Timing of investment. Under Uttar Pradesh’s 2022 policy, at least 80% of the capital investment must be made after the policy’s effective date, and applications should be made before commercial operations begin.
- Choice of instrument. Capital subsidy and SGST refund are usually alternatives.
- Lock-ins. Maharashtra’s GCC policy requires ten years of operation.
- Domicile tests. Tamil Nadu and Odisha GCC payroll support counts only state-domiciled employees.
- Payment profile. Subsidies paid over 10–20 years do not fund the initial build.
Check: Policy terms change by notification and some amounts are converted from published figures. Confirm current terms with the state agency before committing.
What to check next
- Confirm the policy in force on your application date and whether your project qualifies by zone, size and sector.
- Apply for the state package before committing capital or starting commercial operations.
- Compare the capital-subsidy and SGST options against your expected in-state sales.
- Check lock-in, employment and domicile conditions against your hiring plan.
- Combine the state package with central support; see central schemes.