Incentives Under the UP Indust...

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Incentives Under the UP Industrial Investment and Promotion Policy 2022

Incentives Under the UP Industrial Investment and Promotion Policy 2022

Uttar Pradesh ranks first in Commerce and Industries in the Good Governance Index and second in Ease of Doing Business in India. Therefore, the state offers profitable business opportunities for startups, MSMEs, and large industries.

Uttar Pradesh has a significant place in the country with a contribution of around 8% to the nation's GDP. Therefore, the state has set a foundation to invest in the country through large investors as well as MSMEs. To promote the state economy and development the state government has launched the Uttar Pradesh Industrial Investment & Employment Promotion Policy 2022. Under this scheme, the state government is providing various incentives to MSMEs and large enterprises.


Vision of Policy

The government envisions Uttar Pradesh as a competitive investment capital nationally and internationally to promote sustainability, employment, and balanced growth of the state. To foster the growth of the state, the government is providing access to quality infrastructure, promoting ease of doing business, and much more.


Strategies for the Policy

To achieve the vision of the policy, the government aims to fulfil it with the strategic interventions of five pillars:

  • Horizontal
  • Vertical
  • Global Value Chain Integration
  • Investment attractiveness
  • Sustainability

Every pillar consists of different assistance provided by the state government.

Fiscal Incentives for Large Enterprises under the UP Investment Policy 2022

The GoUP offers various incentives, schemes, and subsidies for improving and easing business. In industrial undertakings, the government facilitates capital investment that varies according to the size of the business. Industrial undertakings making phased investments are eligible for incentives under the government industrial policy.

Here are the incentives or subsidies that are available under the policy:


Stamp Duty Exemption:

The state government provides 50–100% stamp duty exemption in different regions of Uttar Pradesh with the bank guarantee of an equivalent amount deposited by the industrial unit. The bank deposit will be released on the commencement of commercial production by the unit.


Investment Promotion Subsidy:

A government provides three exclusive options for availing of the Investment Promotion Subsidy. There is a one-time option for choosing the policy for the investor. However, there is a chance to change it for one time before the approval of a high-level empowered committee.

The following are the three options that industrial undertakings can choose:


Capital Subsidy

In this, an undertaking can avail capital subsidy equal to capital base subsidy multiplied by a Gross Capacity Utilization Multiple (GCM) in annual instalments and subject to an annual ceiling.

Annual Capital Subsidy = (Base Capital Subsidy X GCM) / applicable Incentive disbursal duration.

Mega and above category industries can take additional boosters along with the capital subsidy that is:

  • Employment Booster: Mega and above category projects can avail of such booster based on the number of employment. So, by generating a specific number of employment or employing at least 75% of women, industries are eligible for an employment booster of 2-4% of ECI (Eligible capital Investment).
  • Exports Booster: The export booster is available according to the ratio of production meant for exports to total production for a given year.
  • Ecosystem Booster: The industries are eligible for this booster if any mega or above industry obtains raw materials for manufacturing the final product within Uttar Pradesh.

Net SGST Reimbursement

The government is providing 100% reimbursement on the net SGST amount deposited in the state’s account which varies according to region and business size. However, during diversification or expansion, the incentives are only applicable to incremental investments.


Top up on Production-Linked Incentives (PLI) Incentives

The government provides 30% of the PLI incentives, and the overall ceiling of incentives by the GoUP will be capped at 100% of ECI. Also, the government may add more schemes for the benefit of industries and the state after the permission of the Honorable Chief Minister.

So, the above three are the Investment Promotion Subsidies where an industry will be eligible for only one of them.


Incentives for R&D projects:

The government will reimburse 25% of expenditure subject to the maximum INR 10 Crores for standalone R&D units for projects with a minimum eligible capital investment of Rs 20 crore.


Subsidies for MSME Under the UP Industrial Policy 2022

The government has launched various successful programs, like "One District, One Product”, which is successful on a higher level. The government is supporting MSMEs by improving market access through digital market matchmaking platforms and supporting new technology adaptations. Under the MSME policies of the state, businesses can avail of subsidies for support and better profits:

  • Capital Subsidy:  MSMEs are eligible for capital subsidies up to 25%, varying according to the region. SC/ST and women entrepreneurs are eligible for an additional 2% capital subsidy.
  • Interest Subsidy: Micro units are eligible for a 50% interest subsidy, payable annually for five years, whereas a 60% interest subsidy for SC/ST and women entrepreneurs.
  • Stamp Duty Exemption: Up to 100% of stamp duty exemption for women in each region, while the percentage varies for MSMEs in different regions.


The Uttar Pradesh Industrial Investment and Employment Promotion Policy 2022 was launched by the government to facilitate the expansion of industries, facilitating state growth and economy. This umbrella Policy provides a strategy framework for the State over the next five years against which major private and public sector investment decisions can be made with confidence.

The world of subsidies is complex and inconvenient for a person to have in-depth knowledge. Therefore, if you are planning to expand your business or seeking financial assistance, you can contact Subsidy Pro, proficient in providing consultancy for subsidies for startups, MSMEs, and large enterprises.