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Policy Intelligence · 02 of 06

Punjab will return up to 100% of your
capital investment. Read that again.

The Punjab Industrial & Business Development Policy 2026 — launched this year — is India's most comprehensive state investment framework. For the first time, Punjab has introduced direct capital subsidy. This is not a tax break. This is the government as your co-investor.

The headline number: Up to 100% of Fixed Capital Investment returned

Through a combination of up to 20 different incentives — SGST reimbursement, capital subsidy, stamp duty exemption, electricity duty waiver, employment subsidy — Punjab will return your entire capital investment over the incentive period. Ultra-mega projects can receive up to 200% of FCI over 15 years. This is among the highest incentive packages offered by any Indian state.

Full incentive breakdown — Punjab IBDP 2026
Capital Subsidy
Up to 100% FCI
Introduced for the first time in Punjab's history. Investors customise a package combining multiple incentives to reach up to 100% FCI recovery. Choose from 20 available incentives to design your own package.
SGST Reimbursement — MSMEs
100% · 7 years
Full reimbursement of net SGST paid from date of commercial production, capped at 100% of FCI. Effective zero GST cost for the first 7 years of business operation.
Stamp Duty
100% exempt
Complete exemption or reimbursement on stamp duty for purchase or lease of land and building. Applies to MSMEs and most new industrial and IT units establishing in Punjab.
Electricity Duty
Exempt 7–15 yrs
Electricity duty exemption for 7–15 years depending on sector. Power tariff frozen at ₹5.50/KVAH for 5 years for manufacturing units in approved industrial parks.
Employment Generation Subsidy
₹36K/employee/yr
Per Punjabi employee per year for 5 years. ₹48,000/year for women and SC/BC/OBC employees. 2026 policy reduces eligibility threshold to just ₹25 Cr investment and 50 workers.
Ultra-Mega & Mega Projects
200% FCI / 15 yrs
SGST reimbursement up to 200% of Fixed Capital Investment over 7–15 years. Dedicated customised package committee for mega projects. Case-by-case negotiation with direct government engagement.
Property Tax — Thrust Sectors
100% · 10 years
Complete property tax exemption for manufacturing, IT/ITES, and other thrust sectors for 10 years from commercial production. No property tax liability for a decade.
Private Industrial Park Developers
25% capital subsidy
Developers of private industrial parks (min. 25 acres; 10 acres for IT) get 100% CLU/EDC exemption plus 25% capital subsidy on infrastructure investment. Residential component also eligible.
Freight & Export Subsidy
New in 2026
Freight and marketing subsidy to promote exports from Punjab. Particularly relevant for agri-processing and pharma units using IXC air cargo to reach international markets.
Incentive Period
Up to 15 years
Investors can opt for an extended incentive period of up to 15 years — one of the longest stability windows offered by any Indian state. Policy horizon confirmed through 2041.
Priority sectors under the policy
Manufacturing (14 priority sectors)
Agri & Food Processing
Electronics & ESDM
Auto & Auto Components
Pharmaceuticals & Medical Devices
Sports Goods
Textiles & Apparels
Circular Economy / Agro-waste Processing
Services (7 priority sectors)
IT / ITES
Tourism & Hospitality
Healthcare
Logistics & Warehousing
Education & Skill Development
Animation, VFX, Gaming & Comics (AVGC)
ODOP (One District One Product)
How to claim — the process
01
Register on INVEST Punjab Business First Portal
investpunjab.gov.in — single window for all approvals. Integrated with national portal and NHAI, PWD, RDA, Forest Department.
02
Submit Detailed Project Report (DPR)
Appraised by PSIDCO, SIDBI, or state-empanelled agencies. Determines Fixed Capital Investment (FCI) basis for all incentives.
03
Choose your incentive package
Select from up to 20 incentive categories to design your custom package. Customised Package Committee for mega projects. Fast-track clearance via Invest Punjab for large investments.
04
Begin commercial production
Incentive clock starts on date of first sale invoice. SGST reimbursement, electricity duty, employment subsidy all run from this date.
05
Annual claims via GMDIC
SGST reimbursements processed via GMDIC directly from portal. CA certificates required annually for employment subsidy. Passbook system tracks cumulative disbursements.
Verify current eligibility at investpunjab.gov.in · Policy applicable from October 2022 (IBDP 2022) and 2026 update · Consult a qualified CA or policy advisory firm before structuring investment to maximise incentive combination
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