Maharashtra – Business Opportunities & Market Entry

Maharashtra, located on India's western coast, shares borders with several states and is known for its economic significance. Its Gross State Domestic Product (GSDP) was estimated at around Rs. 31.98 trillion (US$ 430.62 billion) in 2021-22. Mumbai serves as the commercial capital and a global financial hub, while Pune has emerged as an educational centre. The state has a population of 124 million, a literacy rate of 82.91%, and the highest percentage of employable talent in India, with approximately 68% of its population considered employable. Maharashtra is the second most populous state in India, comprising about 9% of the country's total population.

Top Industries

• Food Processing - Maharashtra, a prominent state in India, excels in agricultural production, particularly in pulses, sugarcane, banana, cashew nuts, and grapes. It holds the title of the largest grape producer in the country and has fostered the growth of the grape processing and wine industry through dedicated industrial policies and wine parks. The state's food processing sector is also significant, with eight food parks and three floriculture parks supporting agro-based industries. Maharashtra's food processing industry contributes 19% to India's output and 15% to its exports. To further promote the sector, the state offers incentives such as capital subsidies, tax benefits, and exemptions, as well as access to low-cost capital through collaboration with NABARD. These initiatives drive economic growth, employment opportunities, and rural development while enhancing the value addition in the agricultural sector.
• Automobile and Auto Components - Maharashtra holds significant importance in India's automobile and auto-components sector, contributing around 20% to the country's output and 25% to its exports. The state houses major automobile centres like Pune, Nashik, Aurangabad, and Nagpur, which have become prominent manufacturing hubs. The sector contributes 7% to Maharashtra's Gross State Domestic Product (GSDP) and 15.3% to its Industrial GSDP. Pune, in particular, stands out as a leading auto hub, with over 4,000 manufacturing units. Maharashtra's share in India's automobile and auto-components output is substantial, accounting for around 20% in motor vehicles and parts and accessories. The state also offers incentives such as industrial subsidies, interest subsidies, and exemptions to foster industry growth. With thriving manufacturing units, research institutes, and favourable policies, Maharashtra plays a pivotal role in driving the growth and development of the automobile sector in India.
• Biotechnology and Pharmaceuticals - Maharashtra holds a prominent position in India's pharmaceutical industry, contributing 17% to the country's pharmaceutical output and 20% to its exports. The state's well-developed infrastructure, including advanced waste treatment plants, supports sustainable and compliant manufacturing practices. Key pharmaceutical hubs in cities like Pune, Nashik, Aurangabad, and Mumbai foster collaboration and innovation. Maharashtra offers incentives such as interest subsidies, exemptions from electricity duty and stamp duty, and reimbursement for patents. These measures encourage investment, research and development, and the establishment of biotechnology units. The state's robust manufacturing base, infrastructure for waste management, and strategic hubs make it an attractive destination for pharmaceutical companies. Maharashtra's contribution to the industry's growth and competitiveness in India is significant.
• Textiles and Garment - Maharashtra plays a significant role in India's textile industry as a leading producer of cotton, silk, and bamboo fibres. The state's textile sector is the second-largest employment generator, and the government has established textile parks to support its growth. The Textile Policy aims to attract investments of over $5.6 billion and create one million new jobs by 2023. Incentives offered include capital subsidies for self-financing projects and higher subsidies for units in less developed regions. Maharashtra contributes 12% to India's textile output and holds a 16% share in textile exports, showcasing its importance in the sector. With favourable policies, established textile parks, and a significant contribution to the industry, Maharashtra continues to be a key player in the textiles and garments sector, fostering its growth and competitiveness.
• Information Technology - Maharashtra is a significant contributor to India's software exports, with Pune ranking among the top cities in the country. The state offers incentives through its Industrial Policy to support the software sector, including infrastructure development, patent support, and skill enhancement programs. Knowledge parks provide a conducive environment for software companies, and exemptions on filing patents encourage research and development activities. The government also provides exemptions on local body taxes and simplifies regulatory procedures for IT and ITeS units. Maharashtra aims to attract more software companies, boost exports, and foster innovation and technology in the sector. The state's focus on infrastructure, patent support, and skill enhancement reflects its commitment to the growth and development of the software industry.
• Electronic System Design and Manufacturing - Maharashtra's Electronic System Design and Manufacturing (ESDM) sector contributes significantly to India's output and exports. The state has established Electronic Manufacturing Clusters (EMCs) and nurtured ESDM hubs to support industry growth. Pune, Aurangabad, and Navi Mumbai are key locations for EMCs, offering advanced facilities for R&D and testing. Talegaon and Khed are well-established ESDM hubs, benefiting from excellent connectivity to major ports. Maharashtra's initiatives aim to create an environment conducive to ESDM sector growth, attract investments, and foster innovation. Incentives include capital investment subsidies of up to 25%, reimbursement of taxes and duties, and support for key sectors within electronics. These measures encourage long-term investments, reduce financial burdens, and position Maharashtra as a hub for advanced electronic manufacturing. The state's commitment to supporting the sector reflects its dedication to sustained growth in ESDM and technological development.

MAHARASHTRA NEW INDUSTRIAL POLICY 2019-24

Overview The Maharashtra Industrial Policy 2019 aims to increase global investment, enhance manufacturing, and promote sustainable development. Key objectives include achieving a manufacturing sector growth rate of 12-13%, attracting investments worth INR 10 lakh crore, and generating employment for 40 lakh people by 2023-24. The policy offers incentives such as power and interest subsidies, stamp duty and electricity duty exemptions, and subsidies on state GST paid. Its goal is to create a conducive environment for industrial growth, boost investment, and drive economic development in Maharashtra. Promotion of Thrust Sectors The Maharashtra Industrial Policy 2019 focuses on promoting key thrust sectors to drive industrial development and employment generation. These sectors include Electric Vehicles (EVs), Aerospace and Defence Manufacturing, Industry 4.0 technologies, Integrated Data Centre Parks, Mineral/Forest-based Industries, Nuclear Power Plant Equipment Manufacturing, Textile Machinery Manufacturing, Sports and Gym Equipment Manufacturing, Biotechnology and Medical Devices, Agro & Food Processing, Information Technology (IT) & IT Enabled Services (ITeS), Green Energy/Bio Fuel Production, Electronic Systems Design & Manufacturing (ESDM) and Semiconductor Fabrication, and Logistics & Warehousing. The government offers incentives and support to encourage growth and investment in these sectors, contributing to the overall economic development of Maharashtra. Promotion of MSMEs The Maharashtra Industrial Policy places significant emphasis on promoting Micro, Small, and Medium Enterprises (MSMEs) and small industries. Maharashtra has a large number of MSMEs, which are vital for employment generation and economic growth. These enterprises contribute a substantial percentage of employment and exports in the state. The government recognizes the importance of supporting and nurturing MSMEs by offering fiscal incentives. These incentives include power tariff subsidies, interest subsidies, stamp duty exemptions, and electricity duty exemptions. The goal is to create a conducive business environment, attract investments, and foster the overall development of industries in Maharashtra. Attracting Large, Mega and Ultra-Mega Investments Maharashtra is renowned for its numerous Large and Mega projects, which have consistently contributed to revenue generation and employment opportunities. To qualify for incentives, Large Scale Industries (LSIs) must meet specific thresholds for capital investment and employment set by the state government. The incentives provided aim to enhance competitiveness, support research and development, promote technology upgradation, conserve water and energy, encourage cleaner production practices, and facilitate credit rating initiatives. These incentives include Investment Promotion Subsidies (IPS) based on the gross State Goods and Services Tax (SGST) paid on eligible product sales, stamp duty exemptions for land acquisition and term loans, and additional support for specific sectors. Other Features Walk-to-Work Concept: Encouraging companies to develop accommodation facilities within a 5 km radius of the work area for non-polluting industrial activities, with non-fiscal concessions for sustainability. Promotion of Trade and Commerce: Establishing an administrative wing and Global Investment Promotion Council to support employment generation and attract global investment. Export Promotion Initiatives: Setting up an Export Promotion Council, supporting export infrastructure, and providing Venture Capital Funds for specific sectors. Special Incentives: Offering special incentives for industrial establishments in underdeveloped districts, additional fiscal assistance and extended eligibility period for agro and food processing, green energy/biofuel, and Industry 4.0 sectors, and reserved estate allocations for SC/ST and women entrepreneurs. Strengthening of District Industry Centres (DICs): Enhancing DICs with improved infrastructure, digitization, and comprehensive support for marketing, trade, and entrepreneurship development. Apex Institute for Promotion of Entrepreneurship: Establishing an Apex Entrepreneurship Development Institute in Kalamboli, Raigad district, with state-of-the-art facilities to promote entrepreneurship, provide training and mentoring, and support start-ups.

Maharashtra Electric Vehicle Policy 2021

The Maharashtra Electric Vehicle (EV) Policy 2021 offers incentives like tax waivers, reduced electricity tariffs, and financial support to promote EV adoption. It focuses on developing a robust charging infrastructure, supporting local manufacturing and R&D, and creating a skilled workforce. The policy sets targets for government EV procurement and aims to make EVs the preferred mode of transportation in Maharashtra.

Maharashtra Textile Policy 2018-23

The Maharashtra Textile Policy aims to attract investments, enhance productivity, and promote sustainability in the textile sector. It offers incentives, infrastructure support, and skill development programs to create a favourable business environment for textile businesses in Maharashtra.

Maharashtra Food Processing Policy 2018

The Maharashtra Food Processing Policy aims to attract investments, promote value addition, and strengthen the food processing sector. It offers incentives, infrastructure support, and skill development programs to create a favourable business environment for food processing businesses in Maharashtra.

Maharashtra Start-Up Policy 2018-23

The Maharashtra Start-up Policy aims to foster a supportive ecosystem for start-ups in the state. It offers incentives like financial assistance, access to funding, incubation spaces, mentorship programs, and networking opportunities. The policy encourages collaboration between start-ups, research institutions, and industries to drive innovation. Skill development initiatives and streamlined administrative processes are also prioritized. The policy emphasizes social impact and sustainability, promoting start-ups that address social challenges and adopt environmentally sustainable practices. Maharashtra aims to create a conducive environment that enables the growth of start-ups and contributes to job creation and economic development.

Best Locations to set up Business in Maharashtra

• Mumbai - Mumbai, India's financial and commercial capital, offers diverse opportunities across sectors. With a robust consumer market, corporate headquarters, financial institutions, and a thriving start-up ecosystem, Mumbai provides a conducive environment for businesses. Its well-established infrastructure, global connectivity, and access to a skilled workforce make it an attractive destination.
• Pune - The "Detroit of India" with thriving IT, manufacturing, engineering, and education sectors. Abundant skilled professionals, prestigious institutes, and a supportive start-up ecosystem.
• Nashik - The "Wine Capital of India" with a strong agricultural and industrial base. Flourishing wine industry, food processing, agro-based, and engineering sectors. Strategic location, connectivity, skilled labour, and proximity to Mumbai-Delhi Industrial Corridor attract investment and infrastructure development.
• Aurangabad - Growing industrial city with a focus on automobile manufacturing, engineering, and pharmaceutical sectors. Rich historical heritage and significant industrial growth. Favourable business environment, developed industrial estates, robust infrastructure, and availability of skilled labour.
• Nagpur - Major commercial and logistics hub in central India with excellent connectivity. Known for logistics, transportation, manufacturing, and agro-processing sectors. Supportive business environment and government initiatives to attract investments.
• Thane - Rapidly developing city near Mumbai with a strong commercial and industrial base. Good connectivity, modern infrastructure, and favourable business climate. Attracts businesses in manufacturing, IT, retail, and services sectors.
• Kolhapur - Rich cultural heritage and industries in textiles, engineering, and footwear. Skilled workforce, supportive government policies, and industrial estates. Favourable location, good infrastructure, and abundant resources attract businesses.
• Navi Mumbai - Planned satellite city of Mumbai with modern infrastructure and well-connected transportation network. Growing IT industry, business parks, and SEZs attract IT, finance, and logistics industries. Ideal urban environment for businesses.
• Solapur - Emerging industrial city with a focus on textiles, agro-processing, and engineering. Strategic location, well-connected to major cities. Industrial parks, land availability, and skilled workforce.
• Ahmednagar - Strong agricultural and industrial sectors, particularly in sugar, dairy, and food processing. Favourable investment policies, industrial estates, and supportive business environment. Proximity to Mumbai and Pune.
• Sangli - Thriving commercial and trading centre in western Maharashtra. Noted for agriculture, sugar, and textile industries. Good connectivity, abundant water resources, and favourable climate for agro-based industries. Industrial estates, skilled labour, and a growing market.
• Satara - Prominent industrial and educational hub in Maharashtra. Diverse industries, including automotive, engineering, and food processing. Strategic location on Mumbai-Bengaluru highway, excellent connectivity, and land availability for industrial development.
• Ratnagiri - Coastal city known for its port and tourism industry. Emerging sectors include fisheries, agriculture, and pharmaceuticals. Opportunities in agro-processing, marine products, and hospitality. Natural beauty and coastal location enhance its appeal.
• Amravati - Upcoming industrial city in Vidarbha region with diverse industries such as textiles, food processing, and engineering. Industrial estates, good connectivity, and government support for development.

Business Clusters in Maharashtra

• Mumbai and Pune: Major pharmaceutical hubs with expertise in research, development, and production.
• Ichalkaranji: Renowned textile hub for manufacturing, weaving, and dyeing. Significant contribution to the regional economy.
• Thane-Belapur: Thriving industrial zone near Mumbai. Diverse industries, strong logistics, and proximity to Mumbai port.
• Baramati Agro and Food Processing Cluster: Pune district hub for agro and food processing. Specializes in fruits, vegetables, and dairy products. Boosts rural economy.
• Navi Mumbai's IT and Electronics Cluster: Prominent IT hub in Mahape. Hosts software development, IT consulting, and BPO companies.
• Mumbai's Jewellery Cluster: Zaveri Bazaar, a famous jewellery market. Hub for wholesalers, retailers, and manufacturers. Offers gold, diamond, and precious metal jewellery.
• Pune's Biotech Cluster: Leading in Maharashtra. Houses biotech companies, research institutions, and parks. Genome Valley Biotech Park and NCCS are prominent.
• Mumbai's Film Cluster: Bollywood hub. Film studios, post-production, talent agencies. Film City in Goregaon is a prominent production hub.
• Pune's Education Cluster: Prominent educational hub. Universities, engineering colleges, management institutes. Attracts students, fosters innovation.
• Raigad's Chemical Cluster: Strong presence in chemical and petrochemical industry. Petrochemical complexes, manufacturing units. Roha MIDC Industrial Area is a major cluster.
• Thane-Navi Mumbai's Steel Cluster: Prominent steel and metal processing. Steel plants, metal fabrication units. Supplies products to construction and engineering sectors.
• Pune-Nashik's Renewable Energy Cluster: Growing solar and wind energy presence. Companies, projects, equipment manufacturers. Contributes to clean energy goals.

Tax Benefits, Incentives and Subsidies

Maharashtra provides several incentives and subsidies to promote industrial growth in the state. Here are some key data statistics related to these policies –

• New units receive subsidies on actual interest paid to Banks and Financial Institutions, capped at the lower of the net interest rate or 5%.
• 75% subsidy is offered on expenses for patent registration, limited to Rs. 10 lakhs for national patents and Rs. 20 lakhs for international patents.
• A 5% subsidy is provided on additional capital equipment acquired, limited to a maximum of Rs. 25 lakhs.
• New units and units undertaking expansion enjoy a waiver of stamp duty during the investment period.
• 75% subsidy is available on expenses incurred for quality certification, limited to Rs. 1 lakh.
• Units in specified areas receive a power subsidy of Rs. 1 per unit for 3 years.
• 75% subsidy is provided on the cost of water audit, limited to Rs. 1 lakh, and energy audit, limited to Rs. 2 lakhs.
• 50% subsidy is given on the cost of capital equipment for water conservation and recycling measures, limited to Rs. 5 lakhs.
• Specific industries receive GST incentives such as exemptions, reduced rates, and input tax credits based on government notifications.
• New industrial units and units undertaking substantial expansion can avail of capital investment subsidies based on the amount of investment made in fixed assets.
• Eligible industrial units receive subsidies from MIDC based on investment, employment generation, and exports.
• Industries generating a specified number of employment opportunities can avail of subsidies based on the number of eligible employees.

Maharashtra offers diverse industries, strong infrastructure, and government incentives, making it an attractive business destination. Key sectors include manufacturing, IT, automotive, pharmaceuticals, and renewable energy. However, understanding the local market and building partnerships are essential for success.


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