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Industrial Licensing


With progressive liberalization and deregulation of the economy, industrial license is required in very few cases. Industrial licenses are regulated under the Industries (Development and Regulation) Act 1951 made by the Central Government. At present, industrial license is required only for the following:

1. Industries retained under compulsory licensing
2. Manufacture of items reserved for small scale sector by larger units
3. When the proposed location attracts locational restriction

The following industries require compulsory license:
  • Alcoholics drinks
  • Cigarettes and tobacco products
  • Electronic aerospace and defense equipment
  • Explosives
  • Hazardous chemicals such as hydrocyanic acid, phosgene, isocynates and di-isocynates of hydro carbon and derivatives
Procedure for obtaining an industrial license

Industrial license is granted by the Secretariat for Industrial Assistance in Department of Industrial Policy and Promotion, Government of India. Application for industrial license is required to be submitted in Form FC-IL to Department of Industrial Policy and Promotion.

FORM FC-IL - Composite form for Foreign Collaboration and Industrial Licence http://siadipp.nic.in/download/il-form.doc

Small Scale Sector

Ministry of Agro and Rural Industries and Ministry of Small Scale industries have been merged into a single Ministry, namely, Ministry of Micro, Small and Medium Enterprises. The Central Government has also now passed a new law viz: The Micro Small and Medium Enterprise Development Act, 2006. For details, please log on to http://msme.gov.in/.

Locational restrictions

Industrial undertakings to be located within 25 kms of the standard urban area limit of 23 cities having a population of 1 million as per 1991 census require an industrial license. Industrial license even in these cases is not required if a unit is located in an area designated as an industrial area before 1991 or non-polluting industries such as electronics, computer software, printing and other specified industries.