North East Industrial Development Scheme
Northeastern India has a lot of potential that remains untapped thanks to its different cultural legacy, plenty of natural resources, and its strategic position near to Southeast Asia.
However, regional economic progress has frequently been gradual. To fix this breach, the Indian government introduced the North East Industrial Development Scheme (NEIDS) in 2017. In place of earlier programs like the NEIIPP, this program provides a range of financial incentives and subsidies to promote industrialization throughout eight North Eastern states.
Let’s analyze the functioning of NEIDS, its beneficiaries, and the effects on investors and businesses
Objective of North East Industrial Development Scheme
The goal is simple: The purpose is to attract private investment, create jobs, and improve manufacturing and services in North East India.
It covers the following eight states:
- Assam
- Arunachal Pradesh
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Tripura
- Sikkim
The DPIIT which answers to the Ministry of Commerce and Industry, is in charge of managing NEIDS.
Key Incentives Under NEIDS
NEIDS 2017 combines the benefits of several existing central schemes while introducing new subsidies tailored for the region:
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Central Capital Investment Incentive for Access to Credit (CCIAC)
- 30% of the investment in Plant & Machinery
- Capped at ₹5 crore per unit
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Central Interest Incentive (CII)
- 3% interest reimbursement on working capital credit
- For 5 years from the start of production
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Central Comprehensive Insurance Incentive (CCII)
- Reimbursement of 100% insurance premium on building, plant, and machinery
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Goods and Services Tax (GST) Reimbursement
- 100% reimbursement of the central share of CGST and IGST for 5 years
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Income Tax Reimbursement
- Reimbursement of income tax for the first 5 years (based on actual payment)
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Transport Incentive (TI)
- Upto 20% cost reimbursement on transport via rail, inland waterway, or air freight
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Employment Incentive (EI):
50% of company contributions to new hires are reimbursed through the Employee Provident Fund (EPF).
Eligibility Guidelines
- The unit must be newly established and not availing benefits under earlier schemes
- Must be in a manufacturing or service sector (excluding a negative list like alcohol, tobacco, mining, etc.)
- Located in one of the 8 North Eastern states
- Registered under Goods & Services Tax (GST)
- Operational for minimum 5 years
Key Takeaways
- Budget Allocation: The total of ₹3,000 crore has been authorized for execution from 2017 to 2022.
- As of 2023, more than 450 industrial entities have enrolled under NEIDS.
- The scheme is expected to generate over 58,000 direct jobs
- Covers over 65% of transport subsidy costs for manufacturing exporters in some sectors
- Assam and Sikkim are the top two states in terms of units registered
Impact on North East Industrial Landscape
The scheme has seen growing traction, especially in sectors like:
- Food processing
- Agro-based industries
- IT & ITES
- Tourism and hospitality
- Handicrafts and textiles
With GST reimbursements, freight subsidies, and capital support, NEIDS has helped de-risk private investments in a historically underdeveloped zone.
Difficulties and Room for Development
There are still obstacles even though the plan has had an impact:
- Lack of infrastructure (roads, logistics, and electricity);
- Slow subsidy disbursement; • Smaller MSMEs’ lack of awareness;
- Bureaucratic registration and approval processes
Along with simplifying the subsidy process and adopting digital-first transparency, the government has been urged to extend the program into 2022
How Cretum Advisory Helps with NEIDS
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Check your eligibility & project fit
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Prepare and file your NEIDS application
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Draft DPRs, financials & documentation
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Claim GST Refund, capital, transport & tax subsidies
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Coordinate with DPIIT & govt authorities
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Combine NEIDS with state-level schemes
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Ensure full compliance & audit readiness
The Final Thought
NEIDS is a strategic tool to balance industrial expansion throughout India, not only a subsidy program. If businesses and the government provide the required support, North East India might become a manufacturing and service hub that connects India to ASEAN and beyond.
Exploring the NEIDS 2017 route to the Northeast is beneficial for investors or business owners looking for regions ready for growth.
Frequently Asked Questions (FAQ)
1. What is NEIDS?
A central government program that provides financial incentives to support North East India’s economic growth.
2. Which states comes under this group?
The eight north east states that includes- Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim.
3. Who can apply?
New manufacturing or service units set up in NE states after April 1, 2017, and not availing earlier scheme benefits.
4. What incentives are offered?
Subsidies on capital investment, GST, interest, insurance, transport, income tax, and EPF for eligible units.
5. Is there a subsidy limit?
Yes, the total incentive per unit is capped at ₹200 crore.
6. Are service companies eligible?
Yes, there are certain service sectors that includes IT, Tourism industry, Education sector and health care sector are eligible if they are not on the excluded list.
7. How to apply?
Through the DPIIT online portal with project details and required documents.