State SubsidyPunjab

Punjab Industrial and Business Development Policy 2026

Notified on 8 March 2026 (Punjab Govt. Gazette Extraordinary, notification No. PIU/Industrial & Business Development Policy-2026/898), replacing the Industrial and Business Development Policy 2022. It applies to new manufacturing units and to existing manufacturing units expanding, and to new service units. Units choose, once, an eligibility period of 10 to 15 years; the overall incentive ceiling — up to 100% of eligible Fixed Capital Investment for MSMEs, or 125% in the border districts (Pathankot, Gurdaspur, Amritsar, Tarn Taran, Ferozepur and Fazilka), Kandi areas or priority sectors — is then spread evenly as an annual ceiling. Within it, units can combine a capital subsidy of up to 20% of FCI (capped at ₹10 crore), reimbursement of 75% of Net SGST, 100% stamp duty and 100% electricity duty relief, and a range of MSME incentives. MSMEs must register under the ZED scheme and reach at least Bronze level by the time their application (I-CAF) is approved to claim any post-production incentive.

Max Benefit20% capital subsidy up to ₹10 Crore + 75% of Net SGST; total up to 100–125% of FCI

Benefit TypeCapital Subsidy + Net SGST Reimbursement + Duty Exemptions

Project Cost RangeAny size

TimelineAnnual disbursement over a 10–15 year eligibility period

Check My Eligibility

Key Benefits

Capital subsidy of up to 20% of eligible Fixed Capital Investment, capped at ₹10 crore, paid in annual instalments over the eligibility period (clause 5.2.2).
Investment subsidy by reimbursement of 75% of Net SGST for the eligibility period (clause 5.2.4).
100% exemption or reimbursement of stamp duty on land and buildings (clause 5.2.1), and 100% electricity duty exemption for the eligibility period (clause 5.2.3).
For MSEs: 100% of the CGTMSE guarantee fee, up to ₹3 lakh a year for seven years (clause 5.2.10).
75% of energy, water, environment, steam and safety audit costs, up to ₹3 lakh per audit; 75% of patent costs, up to ₹10 lakh domestic or ₹20 lakh international; 100% of quality and environment certification costs, up to ₹20 lakh (clauses 5.2.13–5.2.15).
Freight subsidy for exporters of 1% of FOB value, up to ₹30 lakh a year for five years; 50% of trade-fair stall rent, up to ₹5 lakh (international) or ₹3 lakh (national) (clauses 5.2.6–5.2.7).
₹5 lakh for ZED Silver (first 100 units) and ₹10 lakh for ZED Gold (first 50); 25% of NSE Emerge listing costs, up to ₹10 lakh; 50% of e-commerce onboarding costs, up to ₹50,000 (clauses 5.2.11, 5.2.12, 5.2.16).

Who Can Apply

New manufacturing units, and existing manufacturing units undertaking expansion, anywhere in Punjab.
In the service sector only new units qualify; IT/ITeS units and GCCs expanding are covered by their sectoral policy (clause 4.1.3).
MSME status under the MSMED Act, based on investment in plant and machinery on the date of commercial production (clause 4.2.1).
At least ZED Bronze by the time the I-CAF is approved, for any post-production incentive (clause 5.1.6).
Priority sectors (125% ceiling): EV manufacturing, agri and food processing, IT/ITeS/GCC, ESDM and semiconductors, defence and aerospace, agro-waste to energy, textiles (dyeing only with ZLD), auto and auto components, and sports goods (clause 4.4).

Eligible Business Types

ManufacturingService

MSME Category Applicability

MicroSmallMedium

Eligible Industries

🏭 Manufacturing🍽️ Food Processing🧵 Textiles & Garments💻 IT & ITES🏥 Healthcare & Pharma⚡ Renewable Energy🌾 Agri & Livestock Processing🚚 Logistics & Distribution

How to Apply

File the Incentive Common Application Form (I-CAF) online, choosing the eligibility period of 10 to 15 years — the choice cannot be changed later (clause 5.1.2).
After commercial production, claim each year’s incentives before the end of the following financial year, with the audited balance sheet and prescribed documents (clause 5.1.4).
Delays of up to 180 days past a cut-off can be condoned; beyond that the claim is not considered (clause 5.1.5).

Apply at: Invest Punjab portal

Required Documents

Udyam Registration
GSTIN
ZED certification (Bronze or higher) for post-production incentives
Project report with Fixed Capital Investment break-up
Land or lease documents
Audited balance sheet for annual claims

Stacking Compatibility

This scheme can be combined with the following for higher total benefits:

CGTMSECGTMSE — Collateral-free Loan Guarantee ZED CertificationZED Certification — Subsidy on Quality Certification

Common Rejection Reasons

No ZED Bronze certification when claiming post-production incentives
Industry is on the policy’s Negative List (Annexure I)
Expansion by an existing service-sector unit (only new service units qualify, apart from IT/ITeS and GCCs under their sectoral policy)
Claim filed more than 180 days after the cut-off

Subsidy Setu's DPR preparation process addresses all common rejection points before filing.

Punjab Industrial and Business Development Policy 2026

Key Benefits

Capital subsidy of up to 20% of eligible Fixed Capital Investment, capped at ₹10 crore, paid in annual instalments over the eligibility period (clause 5.2.2).

Investment subsidy by reimbursement of 75% of Net SGST for the eligibility period (clause 5.2.4).

100% exemption or reimbursement of stamp duty on land and buildings (clause 5.2.1), and 100% electricity duty exemption for the eligibility period (clause 5.2.3).

For MSEs: 100% of the CGTMSE guarantee fee, up to ₹3 lakh a year for seven years (clause 5.2.10).

75% of energy, water, environment, steam and safety audit costs, up to ₹3 lakh per audit; 75% of patent costs, up to ₹10 lakh domestic or ₹20 lakh international; 100% of quality and environment certification costs, up to ₹20 lakh (clauses 5.2.13–5.2.15).

Freight subsidy for exporters of 1% of FOB value, up to ₹30 lakh a year for five years; 50% of trade-fair stall rent, up to ₹5 lakh (international) or ₹3 lakh (national) (clauses 5.2.6–5.2.7).

₹5 lakh for ZED Silver (first 100 units) and ₹10 lakh for ZED Gold (first 50); 25% of NSE Emerge listing costs, up to ₹10 lakh; 50% of e-commerce onboarding costs, up to ₹50,000 (clauses 5.2.11, 5.2.12, 5.2.16).

Who Can Apply

New manufacturing units, and existing manufacturing units undertaking expansion, anywhere in Punjab.

In the service sector only new units qualify; IT/ITeS units and GCCs expanding are covered by their sectoral policy (clause 4.1.3).

MSME status under the MSMED Act, based on investment in plant and machinery on the date of commercial production (clause 4.2.1).

At least ZED Bronze by the time the I-CAF is approved, for any post-production incentive (clause 5.1.6).

Priority sectors (125% ceiling): EV manufacturing, agri and food processing, IT/ITeS/GCC, ESDM and semiconductors, defence and aerospace, agro-waste to energy, textiles (dyeing only with ZLD), auto and auto components, and sports goods (clause 4.4).

How to Apply

File the Incentive Common Application Form (I-CAF) online, choosing the eligibility period of 10 to 15 years — the choice cannot be changed later (clause 5.1.2).

After commercial production, claim each year’s incentives before the end of the following financial year, with the audited balance sheet and prescribed documents (clause 5.1.4).

Delays of up to 180 days past a cut-off can be condoned; beyond that the claim is not considered (clause 5.1.5).

Common Rejection Reasons

No ZED Bronze certification when claiming post-production incentives

Industry is on the policy’s Negative List (Annexure I)

Expansion by an existing service-sector unit (only new service units qualify, apart from IT/ITeS and GCCs under their sectoral policy)

Claim filed more than 180 days after the cut-off

Subsidy Setu's DPR preparation process addresses all common rejection points before filing.