Punjab is stepping up its efforts to become a leading industrial and investment destination in India, with Industries and Commerce Minister Aman Arora presenting key provisions of the Industrial and Business Development Policy-2026 to global and UAE investors.
The policy introduces an attractive package of fiscal incentives, simplified approval procedures and digital single-window clearances to encourage domestic and international investments. With fiscal incentives of up to 100% of Fixed Capital Investment (FCI), rising to 125% for priority sectors and designated regions, the state aims to strengthen its industrial ecosystem and enhance global competitiveness.
Attractive Fiscal Incentives to Boost Industrial Investment
A major highlight of the new policy is its flexible fiscal incentive framework, designed to support manufacturing projects across different sectors and regions.
Key benefits include:
- Manufacturing Incentives: Eligible manufacturing units can receive fiscal incentives of up to 100% of their Fixed Capital Investment.
- Special Regional and Sectoral Benefits: Projects in priority sectors, border districts and Kandi areas can qualify for incentives of up to 125% of FCI, subject to a maximum cap of ₹500 crore.
- Capital Subsidy: Eligible projects can receive capital subsidies of up to 20% of FCI, capped at ₹10 crore.
- SGST Reimbursement: Eligible industrial units can avail themselves of 75% reimbursement of Net State GST for the prescribed period.
- Electricity Duty Exemption: New industrial units and existing units undertaking expansion can benefit from 100% exemption from electricity duty.
These incentives are intended to reduce the initial investment burden, improve project viability and encourage businesses to establish or expand their operations in Punjab.
Invest Punjab to Simplify Business Operations
The policy also focuses on improving the ease of doing business through a comprehensive single-window facilitation mechanism.
The benefits cover new greenfield industrial projects as well as the expansion and modernisation of existing industrial facilities.
Through the Invest Punjab digital platform, investors can access a unified system for submitting applications, obtaining necessary clearances, tracking project progress and accessing eligible incentives.
The digital mechanism is expected to make the investment process more transparent, efficient and accessible, particularly for overseas investors seeking to establish operations in the state.
UAE Investors: Focus on Emerging and High-Growth Sectors
Punjab is actively exploring investment opportunities with UAE-based businesses across several strategic sectors that offer significant potential for industrial growth, technology adoption and employment generation.
The priority investment areas include:
- Food processing and agriculture-based industries.
- Advanced manufacturing and logistics.
- Information Technology, IT-enabled Services (ITeS) and Global Capability Centres (GCCs).
- Data centres and digital infrastructure.
- Renewable energy and green technologies.
- Textiles and employment-intensive industries.
- Skill development and allied industrial activities.
These sectors align with Punjab’s ambition to diversify its industrial base, attract technology-driven investments and strengthen its participation in global value chains.
Rajpura IMC: A Major Opportunity for Global Manufacturers
A key attraction presented to potential investors is the proposed 1,100-acre Integrated Manufacturing Cluster (IMC) at Rajpura, strategically located along the Amritsar-Kolkata Industrial Corridor (AKIC).
The industrial cluster is being positioned as a significant opportunity for global manufacturers, logistics companies and allied industries looking to establish or expand their presence in northern India.
With its focus on integrated manufacturing and logistics infrastructure, the Rajpura IMC has the potential to attract large-scale investments, strengthen industrial connectivity and generate substantial employment opportunities.
Punjab’s Vision: From Investment Incentives to Global Competitiveness
Through the Industrial and Business Development Policy-2026, Punjab is seeking to move beyond conventional investment promotion by creating a more competitive, investor-friendly and globally connected industrial environment.
The combination of substantial fiscal incentives, digital approvals, targeted sectoral support and strategic industrial infrastructure is expected to strengthen the state’s appeal among international investors, particularly those from the UAE.
As Punjab intensifies its engagement with global business communities, the success of the policy will ultimately depend on effective implementation, timely clearances and the creation of a supportive ecosystem for long-term industrial growth.
The larger objective is clear: to transform Punjab into a preferred destination for global capital, advanced manufacturing, innovation and sustainable economic development.