Setting up manufacturing in India

If we talk about the manufacturing sector of India, manufacturing has emerged as one of the faster-growing sectors in India. There are several opportunities available to foreign firms while setting up their manufacturing facilities in India. But the main question that arises is the location where the foreign firm can establish a manufacturing unit in India. Selection of region and area depends on the number of factors such as subsidies, policies, curacies and challenges. 


Selecting the region


Here, a foreign firm must consider that the State government in Karnataka aims at promoting Karnataka as the hub for manufacturing under the Karnataka Industrial Policy 2020-25. The main aim of government behind this policy is to emerge as the global leader in areas of manufacturing, innovation and research and development. The government is also taking measures to upgrade the industrial regions of an estate by providing financial assistance for building up infrastructure. Not only this, the government plan to enact Special invest regions act to create SIR in the area.

The main incentives under the Karnataka industrial policy include exemption from entry tax, investment subsidy, availability of interest-free loans, exemption from stamp duty, interest subsidy for technological advancement, concessional registration charges, etc. Hence, setting up a manufacturing unit in India will be highly beneficial for MNC. The MSMEs in the region will also get the subsidy of 10 per cent on the annual turnover each year for the first five years. But, setting up a business in Northern Karnataka is not free from several challenges as various institutional problems may arise. Also, lack of infrastructure, poor railway connectivity, ineffective educational institutions, dry land, etc. are some of the main issues that may be faced by the international firm while establishing the business in North Karnataka. So, the foreign firm can establish a manufacturing unit in North Karnataka by preparing a proper market and business plans. 


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