Himachal Pradesh Industrial Investment Policy, 2019 – HPAS Mains

By | June 5, 2020


Himachal Pradesh consists of diverse terrains and varied climatic zones. Economic strength of Himachal Pradesh primarily lies in activities related to Agriculture, Horticulture, Animal Husbandry, Limestone mines and allied activities in the Primary Sector.

Industrialization in the State is a recent phenomenon. It only gained momentum after getting Statehood. Before grant of Statehood in 1971, only a few industrial units namely Nahan Foundry at Nahan, M/s Mohan Meakins Breweries at Kasauli and Solan, Salt Mines at Drang (Mandi), Rosin &
Turpentine Factories at Nahan & Bilaspur and four small gun factories at Mandi were the main industrial units functioning in the State.

The State Government recognized the importance of Industrial Policy as an effective instrument to boost the confidence of investors and catalyze industrial development. Incentives to Industries were notified initially during 1971 and were revised in the year 1980, 1984, 1991, 1996, 1999 and 2004, which were amended in the year 2009, 2015 and 2017 in response to the changing scenario.

The severe climatic conditions topographical and geographical severities throw challenges in the process of industrialization. In such a scenario, the benefits made available in the form of incentives and subsidies as well as the creation of appropriate infrastructure become the main instruments to attract industrial investment in the State. With substantial investment in  infrastructural facilities, the State has been able to offset the location and geographical  disadvantages to a considerable extent. Factors like low cost quality power, harmonious industrial relations, low cost of land and clean environment, investor friendly administration, attractive incentives and tax concessions, accessibility to Northern markets – all contribute towards creating a healthy investment climate in our State.

During the last few years, industrialization in the State has made significant progress. The Share of industries and Services Sector in the State Domestic Product has increased from 1.1 & 5.9 percent in 1950-51 to 9.4 and 13 percent in 2010-11 and 29.2% and 43.3 % in 2017-18 respectively. The period of Industrial Policy Package of Govt. of India has seen Himachal Pradesh entering the take-off stage with a well-diversified base of industries ranging from rural and traditional Handloom Handicrafts, Cottage, Micro and SSI units to modern Textile, Telecommunication equipment, sophisticated Electronic units, Pharmaceuticals, Engineering, High Quality Precision Tools, Food Processing
industries etc. An investment of about Rs. 15000 Crore actually happened during the period of Industrial Package. Up to 31st March, 2019 the State had 49532 Small Scale and 689 Medium & Large Scale industrial units registered with the Industries Department with a total investment of about Rs. 35449 Crore which were providing employment to about 4.17 lakhs persons. This growth in industrial sector could be achieved only because of forward looking Industrial Policies which were in tendum with changing needs and its proper implementation.

In Ease of Doing Business (EODB) ranking, the State has improved its implementation score from 65.48% to 94.13% in 2017-18 and also emerged as the fastest growing State in the EODB. In Start- up ranking 2018, the State has emerged as the leading Hill State and aspiring leader and also recognized as leader for regulatory change. The State has also recently topped in the ranking
done by the NITI Aayog as regards efforts being made to achieve the Sustainable Development Goals.

Vision Statement:

“To create an enabling ecosystem to enhance the scale of economic development & employment opportunities; ensure sustainable development & balanced growth of industrial & service sectors to make Himachal as one of the preferred destination for investment”


This policy aims to:-

i) serve as a guideline to create a congenial investment climate for existing industries to grow as well as to attract further investment in the State for creating employment opportunities for local youth and to ensure development of Industrial & Service Sector throughout the State.

ii) specifically address issues impeding industrial growth and ensure simplification of procedures,  key physical and social infrastructure, human resource development, access to credit and market.

iii) promote Ease of Doing Business by digitization of all processes and to promote self-certification.

iv) give impetus to food processing industry by establishing effective forward and backward linkages; promoting Agro-Horticulture and rural prosperity.

v) promote MSME sector for uniform sustainable growth of service and industrial sector throughout the State to facilitate generation of employment opportunities for local youth and stakeholders.

vi) promote start-ups and entrepreneurship to create and generate local entrepreneurial base.

vii) recognize and encourage the role of large investment to enhance the scale of economic development, employment opportunities, ancilliarisation, revenue generation and remunerative prices to local resources.

viii) uplift weaker sections of the society.


The objectives of this policy would be achieved by:-

i) streamlining rules/procedures, introducing self-certification, digitalization of all clearances in a time bound manner to ensure Ease of Doing Business (EODB).

ii) creating and up gradation of existing industrial infrastructure and creation of private Land Bank.

iii) ensuring the availability of quality power on competitive rates.

iv) by rationalizing the provisions of incentives, concessions and facilities having a direct impact to sustain and accelerate investment in the State.

v) by providing graded fiscal incentives, facilities and concessions to balance regional economic development.

vi) by providing incentives, facilities & concessions with condition of employment to 80% Bonafide Himachlies at all level. Enterprises employing above 80% Bonafide Himachlies on regular basis are being incentivized on additional employment generated over and above of 50 Bonafide Himachlies.

vii) by focusing and providing an ideal eco system to boost startups & entrepreneurship; environment to sustain traditional cottage industries; technology up gradation, ancilliarisation, industrial sickness, R&D and productivity to increase competitiveness.

viii) by recognizing the importance of cottage Handloom & Handicraft industry and other rural economy based critical sectors such as food processing and provision of backward & forward linkages with Agrohorticulture and Tourism.

ix) by discouraging polluting industries to create a responsible eco friendly environment and incentivize adoption of cleaner production technologies.

x) by recognizing the role of specified services activities in employment generation.

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