Foreign investors entering the Indian market to establish an industrial unit, distribution center or even a branch office need a very strong mindset. You don’t know what the rules and procedures are.
Even when you know how to start a business in India, you still have to navigate through a maze of bureaucratic red tape.
This means upto 16 clearances from different government departments that could take up to 6 months to process and get approved.
These permits and licenses associated with site selection, construction, office space and business registrations make it hard to establish a timeline for this process.
All this was true before the government decided to make doing business in India easier (World Bank report) by making use of the Government of India’s eBiz G2B portal. You can now submit the applications and requests for approval, licenses, permits, etc. through a single portal to the different government departments and agencies.
Investors who want to start a business in India simply have to download the right forms, fill out their application with the supporting documents, and submit it to the right government department online through eBiz.
In addition to details about how to use the eBiz G2B portal, you will learn how to make use of Government of India and state initiatives and investor resources to start a new business or establish an industrial unit. Information and resources included for Make in India’s Investor Facilitation Cell, Invest Karnataka schemes and incentives, and online site selection resources provided by the Karnataka Industrial Areas Development Board (KIADB).
Want to talk? Contact Govt. Of India Ministry of Commerce and Industry’s Department of Industrial Policy and Promotion (DIPP) and Make in India’s Investor Facilitation Cell, or fill up their investor query form online. The email, phone number and address are as shown below.
A project that is going to be a recipient of foreign direct investment can be established as an Indian company, an LLP or a branch/liaison/project office of a foreign company. As an Indian company, it can be a joint venture, private or public ltd company, or a wholly-owned Indian subsidiary of a foreign company in sectors where 100% FDI investment is allowed.
Under the current law, ventures in most sectors are allowed 100% FDI through automatic route (without requiring RBI approval – see FAQ), where FIPB (foreign investment promotion board) approval has already been secured for the project. This includes trading, single brand retail trading and ecommerce projects, and also defence, pharmaceuticals, civil aviation (100% for greenfield, and 74% for brownfield), etc.
Land for FDI projects is a state matter, so you have to contact the IDC (industrial development corporation) for the state in which the project is located. For Karntaka, that would be the Karnataka Industrial Areas Development Board (KIADB).
Use their GIS locator to see location-specific data and demographic information, browse through all the industrial areas, and find vacant plots matching your filters.
Apart from the GIS site selection tool, other online services you can use include the online land application form, allotment, building, timeline, water supply and conflict resolution.
Invest Karnataka has a very useful guide for investors, that tells you everything you need to do in a step by step manner for setting up an industrial unit in the state.
Every local, state and central government agency, department and website you will need to connect is listed. It will take you from entry into India through DIPP to Excise and Customs, Income Tax, Labour laws, EPF, KIADB for site location services, and the environmental clearances required from the Karnataka State Pollution Control Board (KSPCB) and Ministry of Environment Forest and Climate Change, Govt. of India.
Also included are the agencies and their websites where you can apply for the required approvals and registrations (PAN, Incorporation, service tax, IEC), and then the single window clearance, where you can apply for ‘In principle Approval’ for projects through Karnataka Udyog Mitra.
The image below shows the agencies and process you need to connect with online and offline for the actual land acquisition phase of your site selection process.
Apart from this, you will also need to go to the sub-registrar’s office for registration of land documents. This takes a day, but the transfer of Khata registration with the Bengaluru Mahanagara Palike (BBMP) takes up to 30 days.
Then you have applications for electricity (electricity board – ESCOMs), water (KIADB for industrial or BWSSB for city) or Karnataka Urban Water Supply & Drainage Board (KUW&DB) for the rest of the state.
You will also need building plan approvals from BBMP and other local bodies, and construction license from the same local body. Depending on the type of project, you may also need to get approval for a factory plan and apply for a factory license.
|Central Government||State Government|
|Investment allowance – 15% for manufacturing projects that invest over INR 1 billion.||Entry tax exemption – Department of Industries and Commerce (KUM)|
|Incentives for exports – duty drawback, exemptions, and remissions, focus products and market schemes.||Stamp Duty Exemption for Registration of Land documents from KSSIDC.|
|Sector specific incentives such as M-SIPS Entry tax exemption – Department of Industries and Commerce (KUM)||Stamp Duty Exemption for Registration of Loan Documents (KUM)|
|Additional incentives for setting up units in SEZs, EOUs (export oriented units), and NIMZ units (national investment & manufacturing zones).||Incentives and Concessions as per applicable Industrial Policy – Dept. of Industries and Commerce (Invest Karnataka)|
Source Data: Invest Karnataka
The Department of Industrial Policy and Promotion (DIPP) has launched the eBiz goverment-to-business (G2B) portal to assist investment projects with a composite application to around a dozen separate Central Government services needed to start a business in India.
This includes services provided by DIPP, Reserve Bank of India (RBI), the Ministry of Corporate Affairs (MCA), Central Board of Direct Taxes (CBDT), Directorate General of Foreign Trade (DGFT), Employees Provident Fund Organisation (EPFO), Employees State Insurance Corporation (ESIC), Petroleum & Explosives Safety Organisation (PESO), Ministry of Environment and Forests (MoEF), and the Department of Heavy Industries.
Ebiz services are now available online 24/7, and it takes care of everything required for a project – end-to-end. You can download composite applications needed for a project in a specific region, and fill up or submit all the forms and applications to the different government departments either online or offline. You can upload the attachments, make payments online and submit the forms for processing by the concerned department.
Want to get started with site selection for your FDI project in Bangalore, Karnakata, India? Go through the following links:
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