Establishment of

Aniline Manufacturing
Unit

Chemicals and
Petrochemicals
Government of Gujarat
Contents

Project Concept 3
Market Potential 4
Growth Drivers 6
Gujarat – Competitive Advantage 7
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 16
Key Department Contacts 18

Page 2
Project Concept

What is aniline?
 Aniline is an aromatic amine which is mainly used as feedstock for polyurethanes.
 It ignites readily, burning with a smoky flame characteristic of aromatic compounds.
 Aniline is colourless, but it slowly oxidizes in air, giving a red-brown tint to aged samples.
 It is used to manufacture dyes, drugs, photographic and rubber chemicals, explosives and
plastics.

Aniline production process

Exothermic catalytic
Nitration hydrogenation
Benzene Nitro benzene Aniline

Aniline applications
 Methylene di phenyl di isocyanate (MDI) dominates the aniline market based on application.
 MDI is used to manufacture PU foams. Its non-foam applications include paints, coatings,
adhesives, sealants and elastomers.
Aniline global market share by application
79.3%
MDI
80.1%

20.7%
Others
19.9%

Source: Technavio Report 2019 2014

Aniline end uses

 Insulation sector is the largest end-user of aniline as aniline enhances the electrical strength of
insulation materials.
Aniline global market share by Aniline global market share by
end use, 2014 end use, 2019

15.1% 15.9%
Insulation Insulation
Rubber products 4.0% Rubber products
3.7%
Consumer 4.0% Consumer
6.4% 45.6%
Transportation Transportation
6.9%
Packaging 6.6% Packaging
Agriculture Agriculture
10.7% 45.5%
Others 10.3% Others
11.5% 11.5%
Source: Technavio Report

Source:
Page 3 “Global aniline market 2015-19”, Technavio report
https://pubchem.ncbi.nlm.nih.gov/compound/aniline#section=Top
Global Market Potential

Global aniline consumption and forecast

 Global aniline consumption is estimated to reach 8.1 Million Tons (MT) in 2019 from 5.8 MT in
2014, growing at a Compounded Annual Growth Rate (CAGR) of 6.8%.
 Aniline market is expected to grow at a steady rate owing to growth in automotive and
infrastructure industries.

Global aniline consumption and forecast (MT),

2014-19
8.1
7.5
7.1
6.6
6.2
5.8

2014 2015 2016e 2017e 2018e 2019e

Source: Technavio report

Global aniline applications market

 MDI accounts for ~45% of aniline application
market.
 Global MDI consumption is estimated to
reach 6.4 MT in 2019 from 4.7 MT in 2014,
growing at a CAGR of 6.6% driven by
increasing demand in packaging and
insulation markets
 Global consumption of other aniline
applications is estimated to reach 1.7 MT in
2019 from 1.2 MT in 2014, growing at a
CAGR of 7.6%.
 Market is expected to grow steadily due to
increasing demand from agricultural sector
and dyes and pigments industry.

Global MDI consumption and forecast Global consumption of other aniline

(MT), 2014-19 applications and forecast (MT),
2014-19
6.4
6.0 1.7
5.6 1.5
5.3 1.4
5.0 1.3
4.7
1.2
1.2

2014 2015 2016e 2017e 2018e 2019e 2014 2015 2016e 2017e 2018e 2019e
Source: Technavio report

Sources:
Page 4 “Global aniline market 2015-19”, Technavio report
Indian Market Potential

Aniline demand supply gap in India

 Aniline demand in India is expected to reach 90,000 tons in FY20 from 52,500 tons in FY09,
growing at a CAGR of 5%.
 Aniline demand growth is driven by manufacture of dye intermediates, rubber processing
chemicals and herbicides.
 Demand for aniline is met through a mixture of domestic production and import.

Aniline demand supply gap in India (‘000’ ton),

FY09-20e
85.7 90.0
77.7 81.6
72.3 70.5 74.0
63.9 63.5
58.2 54.5
52.5
Demand supply gap: 36,000 ton
48.2
39.4 41.1 40.1 40.6
34.7 34.5

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16e FY17e FY18e FY19e FY20e

Demand Supply

Source: Chemicals and petrochemicals statistics, Government of India

Note: At present, GNFC and HOCL are the only manufacturers of aniline in India. Supply forecast would depend on the set up of new aniline
manufacturing facilities in the country.

Indian aniline export and import

 Indian aniline export has declined at a rate of 55% annually between FY12-15, whereas Indian
aniline import has increased at a CAGR of 33% between FY12-15.
 This is mainly because of lack of local manufacturers of aniline in India.
 GNFC and HOCL are the only manufacturers of aniline in India; HOCL aniline plant became
dysfunctional in 2015.
Indian aniline import and export (tons), FY12-15

36095
31742

15310 15441

953 193 94 86

FY12 FY13 FY14 FY15

Import Export

Source: Chemicals and petrochemicals statistics, Government of India

Sources:
Page 5 http://indianpetrochem.com/report/anilinereport
http://www.thehindu.com/news/cities/Kochi/hocl-facilities-to-be-leased-
out/article7657742.ece
Growth Drivers

Growth in various end-use sectors will drive the aniline market growth
Aniline for insulation market Aniline for rubber market growth
growth (million tons), 2014-19e (million tons), 2014-19e
3.7 0.9 0.93
3.2 3.4 0.8 0.8
2.6 2.8 3.0 0.7 0.7

2014 2015 2016e 2017e 2018e 2019e 2014 2015 2016e 2017e 2018e 2019e
 Global aniline market for insulation
application is estimated to reach 3.68 million  Global aniline market for rubber application is
tons in 2019 from 2.63 million tons in 2014, estimated to reach 0.93 million tons in 2019
growing at a CAGR of 7%. from 0.67 million tons in 2014, growing at a
 Aniline is used in insulation applications of CAGR of 7%.
construction industry for insulation in offices  Aniline is used extensively to produce rubber-
and homes. processing chemicals such as antiozonants.

Aniline for consumer goods

Aniline for transportation market growth
market growth (million tons),
(million tons), 2014-19e
2014-19e 0.4 0.4 0.4 0.5 0.5 0.5
0.7 0.7 0.8 0.8
0.6 0.7

2014 2015 2016e 2017e 2018e 2019e

2014 2015 2016e 2017e 2018e 2019e  Global aniline market for transportation
application is estimated to reach 0.53 million
 Global aniline market for consumer goods
tons in 2019 from 0.4 million tons in 2014,
application is estimated to reach 0.83 million
growing at a CAGR of 6%.
tons in 2019 from 0.62 million tons in 2014,
 Aniline is used for the manufacture of
growing at a CAGR of 6%.
automotive body parts, leather, as a coating
 Aniline is used in consumer goods like textile
agent for automobiles, and for adhesives and
fibres, footwear, coatings, furniture, apparel,
sealants in the automotive industry.
adhesives and sealants.

Aniline for packaging market growth Aniline for agriculture market growth
(million tons), 2014-19e (million tons), 2014-19e
0.4 0.4 0.4 0.5 0.5 0.5 0.3 0.3 0.3 0.3
0.2 0.2

2014 2015 2016e 2017e 2018e 2019e 2014 2015 2016e 2017e 2018e 2019e

 Global aniline market for packaging
application is estimated to reach 0.52 million
tons in 2019 from 0.39 million tons in 2014,
growing at a CAGR of 6%.
 Dyes used for package printing are derived
from aniline oil.
Source: Technavio Report
Page 6
 Global aniline market for agriculture
application is estimated to reach 0.3 million
tons in 2019 from 0.23 million tons in 2014,
growing at a CAGR of 5%.
 Aniline is used in fungicides and herbicides.
As a result, growth in agricultural activities will
lead to boost in demand for aniline.
Sources:
“Global aniline market 2015-19”, Technavio report
Gujarat
Competitive Advantage

'Petro Capital' of India, contributing significantly to the country's production of

Petrochemicals (62%), Chemicals (53%) and pharmaceuticals (45%).

Gujarat has World’s Largest grass root petroleum refinery at Jamnagar by Reliance
Industries Limited with a crude processing capacity of 1.24 million Barrels Per
Stream Day (BPSD)

Salt Processing 75%

Gujarat credited with India’s First LNG
chemical port terminal at Hazira Diamond
70%
Processing
Geographical advantage due to location Petrochemicals 62%
on the west coast of India
Well connected to the major cities of the Chemicals 51%
world by air and sea routes. The state
has 45 operational ports, 12 domestic
Pharmaceuticals 45%
airports and 1 International airport in
addition to an extensive rail and road
Engineering 18%
network.

Gujarat is one of the leading Industrialized States in India and the

“Gujarat ranked first in
ease of doing business as
per DIPP report 2015”
State has attracted cumulative FDI worth US$ 12 billion from April
2000 to March 2015
Ease of Doing Business: Only state which comply 100% with
Environmental procedures. Gujarat fares highly when it comes to
setting up a business, allotment of land and obtaining a
construction permit

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

Key Industries: Gujarat is the leader in key industrial sectors such as chemical, petrochemical,
auto and its allied sector, pharmaceuticals, engineering, textile, jewellery etc.

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

*Source: Socio Economic Review of Gujarat 2015-16

Page 7
Gujarat
Competitive Advantage
 38% (564 km) of the 1500 km length of DFC
will pass through Gujarat which includes 62%
of total area of Gujarat (18 out of 33 districts
within the influence area)
 Investment potential for Gujarat is US$ 50 bn
(60% of total investment potential in DMIC)

 Presence of over 1100 manufacturing unit

comprising of small and large industries in
PCPIR including chemical, petrochemical,
PCPIR
engineering, plastic, dyes & pigments, textile
etc.

 The State has received acknowledgments of

2,466 Industrial Entrepreneurs
Memorandum (IEM) filed by entrepreneurs
between 2010 and October 2015 with an
estimated investment of Rs. 6,01,766 Crores

 Gujarat, with 42.6 % of its population residing in

the urban areas, is among the top three
urbanized states in the country

 Gujarat contributes around 17.2 % to the

country’s industrial output whereas the value of
output registered is about 18.5%.

 Gujarat is the one of the power surplus states

in the country as a result it helping in bringing
huge amount of investment from the industries
and tagged as preferred investment destination
in the country

 Gujarat contributes around 19.1 per cent to

India’s total exports of goods in 2014-15.

*Source: Socio Economic Review of Gujarat 2015-16

*Source: DIPP report

Page 8
Project Information
Location/Size

Gujarat PCPIR
1
Gujarat PCPIR (GPCPSIR) is a specially
delineated Investment Region planned for
establishment of domestic and export led GPCPSIR is located in Bharuch District

production facilities for Petroleum, Chemicals

And Petrochemicals. The PCPIR is located in
South Gujarat and has Gulf of Khambhat to its
West, Narmada river & Aliyabet island in the
South, villages of Vagra and Bharuch in the
East and Bharuch-Dahej railway line in the GPCPSIR is also located in
DMIC influence area
North.
PCPIR
GPCPSIR also falls in the Delhi Mumbai
Industrial Corridor (DMIC) influence area.

Investment Made till date (at

historial cost) Over 100 Investment on Infrastructure
Investment Committed
Functional Units Development

INR 63,651 crores INR 1,05,989 crores INR 15,660 crores

(USD 9.5 billion)* (USD 15.8 billion)* (USD 2.3 billion)*

Chemical port and storage terminal, Dahej PCPIR (one of existing units in PCPIR,
Dahej)

 The terminal port is operated by GCPTCL

 Storage terminal total project cost is INR 830 crore (US$ Existing Tank: 35 Nos.
186 million) Type of storage: Fixed
 The terminal has a facility to store over 3.5 lakhs cubic roof/Floating roof/Fixed cum
meters of liquid chemicals Internal floating roof/Double
 Port has the annual handling capacity of about 2.5 walled storage tank/
MMTPA

PCPIR – Petroleum, Chemicals & Petro Chemical Investment Region

GPCPSIR – Gujarat Petroleum, Chemical & Petro Chemical Special Investment Region

Source: GIDC & DMICDC

Page 9
Project Information

Infrastructure Availability

Logistics & Connectivity

Existing
Existing
 Adani Port (Dahej) - 11.7 MMTPA
 Connected to Delhi-Mumbai
 GCPTCL Liquid Chemical Terminal
Broad Gauge railway line at
- 1.8 MMTPA
Bharuch
 LNG Petronet (Gas Terminal) - 12.5
 Bharuch –Dahej rail line (62 km)
MMTPA
Proposed
 Reliance liquid fuel jetty - 2.12
 Delhi-Mumbai Dedicated Freight
MMTPA
Corridor (DFC) will touch the
 Birla Copper bulk cargo jetty - 3.8
PCPIR on the eastern side
MMTPA
 Bharuch –Dahej broad gauge
New Development
line to be connected to the DFC
 Development of jetty for handling
at Dayadra Jn. (~50 kms)
ODC (Over Dimensional cargo) in
Joint Venture with Dahej SEZ Ltd

Existing Existing
 250 km from International  50 Km of six lane Dahej-Bharuch
Airport at Ahmedabad State Highway connecting six
 90 km from Domestic Airport at lane Delhi- Mumbai National
Vadodara Highway and National
 85 km from Domestic Airport at Expressway
Surat Proposed
Proposed  Ahmedabad Vadodara National
 Greenfield Airport for PCPIR Expressway to be extended to
Mumbai

Utilities
Existing
 GIDC supplies 50 MGD
raw water drawn from
Narmada river at Nand
and Angareshwar ( 25
MGD each)
New Developments
 Water supply scheme for
50 MGD water from
Miyagam Branch Canal
(130 km)
Existing
 Three 220 KV sub-stations located at Dahej &
Vilayat & Six 66 KV substations located at
Dahej, Luna, Bhensali & Vilayat
New Development (in progress)
 One 440KV, one 220KV & nine 66KV substations
proposed within PCPIR area
 Gujarat Energy Transmission Corporation Limited
(GETCO) of 220 KV substation at Suva Dahej,
 1600 MW gas based power plant by Torrent
Power Ltd. in Dahej SEZ. Operational - 400 MW
(1st Phase)
 2640 MW coal based power plant - Adani Power

Page 10
Project Information

Aniline manufacturing procedure

Nitrobenzene production by nitration of benzene

in the presence of nitric acid and sulfuric acid

Aniline production by exothermic catalytic hydrogenation

of nitrobenzene in presence of excess hydrogen

Source: Technavio report, GNFC prefeasibility report

Key equipment and suppliers1

Key Equipment Key Suppliers
 ISGEC Hitachi Zosen,  Metal Fab Engineers,
 Separator  Pumps Dahej Surat
 Alfa Engineering and  Ambica Boilers, Vatva,
 Distillation column  Compressors Equipment, Bharuch Ahmedabad
District  Aero Therm System
 Heat exchanger  Turbine  Heatex Industries Ltd, Pvt. Ltd, Vatva,
Surat Ahmedabad

Feedstock requirement and sourcing

 Feedstock can be sourced from various local manufacturers
 Remaining feedstock requirement can be fulfilled by imports from China, US or western Europe.

Local Manufacturers2 Benzene supply

(KTPA)
Reliance Industries 720
Indian Oil Corporation Ltd (IOCL) 125
Haldia Petrochem 132
Bharat Petroleum Corporation Ltd (BPCL) 43
Source: Mitsubishi Chemical Holdings, 2014, company websites

Note: 1The list only includes key equipment and suppliers and is not exhaustive
2The list of local manufacturers is not exhaustive

Sources:
Page 11 “Global aniline market 2015-19”, Technavio report
GNFC prefeasibility report - http://www.ril.com/OurBusinesses/Petrochemicals/Aromatics.aspx
https://www.iocl.com/aboutus/petrochemicals.aspx
http://www.haldiapetrochemicals.com/index.php?p=cms&id=13
https://bharatpetroleum.com/Our-Businesses/Refineries/Mumbai-Refinery/Product.aspx
Project Information

Local suppliers of Nitric Location in Local suppliers of Location in

acid1 Gujarat Hydrogen1 Gujarat
GNFC Bharuch GACL Bharuch
Shiv Shakti Acid and Valsad Madhuraj Industrial Gases Ahmedabad
Chemicals Pvt. Ltd.
Gujarat State Fertilizers and Vadodara Verni Gas Tech Pvt. Ltd. Surat
Chemicals Ltd

Key Players

Indian Players Global Players

Aniline Technology Providers

Note: 1The list of local manufacturers is not exhaustive

Page 12
Project Information

Manpower Requirement1

 Approximately 200-300 skilled manpower would be required for the production unit of 100KTPA
of Aniline.

Potential collaboration opportunities

 Indian aniline manufacturers can collaborate with global technology providers in order to take
advantage of their expertise.
 Potential collaborations can be made with key global players like Kellogg Brown & Root Inc. and
Chematur Engineering AB.
 GNFC has collaborated with Chematur Engineering AB for Aniline technology.

Key Considerations

 Volatile feedstock price: Benzene, primary feedstock for aniline production, is a crude oil-
based material. In addition, hydrogen (feedstock for aniline manufacture) production requires
natural gas. Hence, price fluctuation of natural gas and crude oil has a negative impact on the
aniline market. The volatility in feedstock prices is reducing the profit margins of aniline
producers.

 Aniline health hazard: Aniline effects eyes, skin, and upper respiratory tract. Chronic
exposure may also result in effects on the blood. Exposure to aniline may occur from breathing
contaminated outdoor air, smoking tobacco, or working or being near industries where it is
produced or used. These adverse effects might hinder market growth.

 Negotiation challenge with international technology providers: International chemical

companies hold the most advanced aniline manufacturing process technology. Finding
mutually acceptable terms of collaboration with the technology providers is a challenge as the
international companies tend to ask for a majority shareholding in the venture.

Note: 1Manpower requirement is indicative of a comparable project and may vary by individual project

Page 13 Sources:
https://www3.epa.gov/airtoxics/hlthef/aniline.html
“Global aniline market 2015-19”, Technavio report
http://www.gnfc.in/aboutus/productsales.html
Project Financials

Project cost
The total project cost of setting up an aniline manufacturing facility at Dahej will be ~INR540 crores
for a production capacity of 100 Kilo Ton Per Annum (KTPA) Aniline.
Project specifications INR crore
Land : Area: 30,000 square meters1 4.3
Rate: INR1,440 per sq. meter. as of 1 January 20162
Building (plant area, office, store, factory shed, lab and packaging, 16.8
open space)
Built-up area: 15,000 sq. metres.
Average rate: INR11,200 per sq. metre.
Machinery, working capital and other miscellaneous expenses 518.9
Total cost 540

Payback period

Capacity (TPA) 100,000

Average capacity utilization in industry (%)3 98.5
Production (TPA) 98,500
Average price per unit (AR) (INR / ton)4 87,435
Industrial average EBITDA margin5 14.23%
Forecasting revenues at expected industrial growth rate6 5.00%
Time (years) 1 2 3 4 5 6 7

Revenue (INR crore) 861 904 950 997 1047 1099 1154
EBITDA (@14.23% of rev.)4 123 129 135 142 149 156 164
Undiscounted cumulative cash
flows (INR crore) 123 251 386 528 677 834 998
Investment (INR crore) 540

Estimated payback period: 4.1 years

1 Area of aniline plant is estimated based on a comparable BASF aniline manufacturing plant
2Land rate based on Dahej (rate may vary depending on the location of the site in Dahej PCPIR).
3Average capacity utilization of GNFC FY15 is taken for calculation.
4Average price per unit is considered by taking average of aniline import price in India.
5EBITDA margin of FY14 GNFC is taken for calculation.
6Industrial growth rate of 5% is considered taking into consideration the average potential growth of aniline demand in
India.

Note: The estimated project financials have been calculated based on the capital requirement/investment of a typical
aniline manufacturing unit. However, they may vary by individual project.
Comparable Project: Sources:
Page 14 1. Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC) GNFC Annual report
“Executive Summary of EIA & EMP Report for Expansion of Brownfield “Petrosil Chemical Explorer”, 13 June 2016
Ammonia, Urea Plant, New Aniline, TDI-MDI Blend, Water Soluble Fertilizers
(NPK) and CPSU Plants at GNFC, Narmadanagar, Bharuch, Gujarat”, July
2014
Project Financials

Minimum
Means
 viable
of finance size

Estimated industrial average (Debt/equity) 0.57x

Debt raised (INR crore) 196

Equity invested (INR crore) 344

Estimated debt raised (INR crore): 196

Minimum viable size

EBIT margin1 10.57%

Total operating costs (as% of revenues) 89.43%
Total costs (89.43% @ 861) (INR crores) 770.2
Depreciation cost2 (10.5% of PPE cost) crores 32.7
Manpower cost (50% of employee cost)
Employee cost (18.3% of total cost)3 70.5
Finance cost (16% of debt) 31.4
Others (including insurance and miscellaneous)
10.8
(2% of total investment)

Total fixed cost (FC) (INR crore) 145.3

Variable cost (VC= TC-FC) (INR crore)
624.9
Variable cost/Unit (INR crore) 0.006
Average revenue/unit (INR crore) 0.008
Minimum viable size (FC/(AR-VC)) (units) 60,564
Estimated minimum viable size: ~61 KTPA

1EBIT margin of FY14 GNFC is taken for calculation.

2 Depreciation cost= %Depreciation of machinery * machinery cost
Industry average is used for depreciation% for estimation purposes
Machinery cost is considered to be 60% of Machinery, raw materials, component import and other miscellaneous
expenses
3Manpower cost=50% of employee cost; Employee cost=18.3% of total cost

(50% of total employee cost is assumed to be fixed, while rest is considered under variable cost.)

Note:
1. Exchange rate of 67 is used to convert US$ to INR
2. The estimated project financials have been calculated based on the capital requirement/investment of a
comparable aniline manufacturing unit. However, they may vary by individual project.
Comparable Project: Sources:
Page 15 1. Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC) GNFC Annual report
“Executive Summary of EIA & EMP Report for Expansion of Brownfield “Petrosil Chemical Explorer”, 13 June 2016
Ammonia, Urea Plant, New Aniline, TDI-MDI Blend, Water Soluble Fertilizers
(NPK) and CPSU Plants at GNFC, Narmadanagar, Bharuch, Gujarat”, July
2014
Approvals and
incentives
Clearances/approval required
Approvals/clearance required
Incorporation of company
Registration/Industrial license
Allotment of land
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
Department to be approached and consulted
Registrar of companies
“Secretariat of industrial assistance” (SIA) for large and
medium scale industries
State industrial development corporation
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((~US$ 0.22 million1), 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 Ministry of environment, forest and climate change
approval
Exiting business Ministry of corporate affairs

Government of Gujarat (GoG) 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

Source:
1. “Gujarat Textile Policy”, Industries and Mines Department, Government of Gujarat, 5 September 2012
2. 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 1- USD= 67.67INR
Page 16 3. “Environment clearance” http://envfor.nic.in/major-initiatives/environmental-clearances, accessed 8 July
2016
4. “Gujarat single window clearance, https://www.ifpgujarat.gov.in/portal/jsp/aboutUs.jsp, accessed 8 July
2016
5. “Exiting business, http://www.mca.gov.in/MinistryV2/CloseCompany.html, accessed 9 July 2016
Approvals and
incentives
Incentives from Government of Gujarat

As per the Gujarat Industrial Policy 2015, following are the key incentives provided to the
manufacturing sector:
 Capital investment subsidy of 10% loan amount disbursed by Bank/Financial Institution up to a
maximum amount of INR1.5 million (~US$ 22,5001)in municipal corporations areas.
 Assistance for technology acquisition from recognized institution for manufacturing products will
be provided by way of 50% of the cost payable subject to a maximum of INR 5 million (~US$
75,0001), including royalty payment for first two year.
 Assistance for venture capital to raise promoter contribution in the form of equity or loan through
Gujarat Venture Finance Limited (GVFL).
 Interest subsidy scheme: 50 lakh interest subsidy for large scale industrial units.
 Assistance scheme for Centre of Excellence: For national level centre of excellence the amount
of assistance will be up to INR20 crore (~US$ 30 million1)while for international level centre of
excellence the limit will be INR30 crore. Such centre of excellence must encourage for
innovation and entrepreneurship. 70% assistance including recurring expenditure would be
availed.
Incentives from Government of India
Sector policy under Make in India initiative
 Industrial licensing has been abolished for most sub-sectors except for certain hazardous
chemicals.
 A weighted tax deduction of 200% under Section 35 (2AB) of the Income Tax Act for both capital
and revenue expenditure incurred on scientific research and development. Expenditure on land
and buildings are not eligible for deductions.
 In the export sector, India has entered into a number of free trade agreements with ASEAN,
Japan, Korea, Malaysia, Singapore, and others.
Technology development
 SMEs will be given access to the patent pool and/or part of reimbursement of technology
acquisition costs up to a maximum of INR2 million (~US$30,0001) for the purpose of acquiring
appropriate technologies up to a maximum of five years.
Green technology & practices:
 5% interest in reimbursement & 10% capital subsidy for the production of
equipment/machines/devices for controlling pollution, reducing energy consumption and water
conservation.
 A grant of 25% to SMEs for expenditure incurred on audit subject to a maximum of
INR1,00,000 (~US$1,5001).
 A 10% one-time capital subsidy for units practising zero water discharge.
 A rebate on water cess for setting up wastewater recycling facilities.
 Incentives for renewable energy under the existing schemes.
Source:
1. “Exiting business, http://www.mca.gov.in/MinistryV2/CloseCompany.html, accessed 9 July 2016
2. “Manufacturing Sector – Profile”, Vibrant Gujarat website, 7 October 2014
1- USD= 67.67INR
Page 17 3. Industries Commissionerate website, http://ic.gujarat.gov.in/?page_id=3175, accessed on 1 June 2016
4. “Textile industry welcomes amended TUFS”, Business Standard, 2 January 2016
5. “Approvals” http://dipp.nic.in/English/Investor/Investers_Gudlines/FAQ_GrantIndustrialLicence.pdf, accessed 27 June
2016
6. “List of defence equipment requiring industrial license”, http://dipp.nic.in/English/acts_rules/Press_Notes/pn3_2014.pdf
 Energy and Petro Chemicals Department
www.guj-epd.gov.in
Gujarat Narmada Valley Fertilizers & Chemicals Limited
www.gnfc.in
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.

Gujarat Narmada Valley

Fertilizers & Chemicals Limited

Gujarat Narmada Valley Fertilizers & Chemicals Limited

P.O. Narmadanagar - 392015, Dist. Bharuch, Gujarat.
Phone : +91 – 2642 – 202279 Fax : +91 – 2642 – 247063
Email: rgrehani@gnfc.in ; industrialproducts@gnfc.in
http://www.gnfc.in