Punjab’s Landmark Industrial Policy 2026

Summary of Sectoral Committee Recommendations
Accepted 77% of Industry recommendations
• 601 recommendations received 
• 77% accepted 
• 1% were GoI related & hence not relevant
Most Comprehensive Policy Framework in the country
• One overarching policy supported by 24 sector-specific policies developed after extensive consultations 
• Investors can choose from ~20 different incentive options to build a customised incentive package 
• Lowest eligibility threshold for Employment Generation Subsidy
Major Incentives for Investors to choose from
• Key incentives available to all investors: SGST Reimbursement, Employment Generation Subsidy, Electricity Duty Exemption, Stamp Duty Exemption 
• Capital Subsidy introduced for the first time in Punjab 
• Other incentives: Freight Subsidy, Marketing Assistance, Support for R&D Facilities, NSE-Emerge Platform, ZLD and Paddy Boilers, ZED scheme, Audit Expenses, Quality Certifications, Patent Registration, CGTMSE Guarantee Fee, Digital Marketing, Vendor Development Programme, Exemption for Canal Water Usage Charges
Definition of FCI Expanded to Make it Comprehensive
• Expanded definition of FCI: Land, Worker Housing, R&D, and Green Infrastructure such as ZLDs, Paddy-Straw Boilers, ETPs, and STPs included in calculation of Fixed Capital Investment (FCI). 
• Modernisation and Expansion projects also made eligible for incentives in the new policy
Period of incentive increased and made flexible
Incentive eligibility period extended from 7-10 years to 10–15 years
Investors now have flexibility to choose any number of years from 10 to 15
As suitable to fully achieve available incentives
Very Strong Focus on Employment Generation
• Eligibility for Employment Generation Subsidy reduced from ₹250 Cr/1,000 employees to ₹25 Cr/50 employees 
• Employment Support: ₹3,000 per month per employee (men); ₹4,000 per month for women, SC/ST and persons with disabilities 
• ₹5,000 per month for IT sector employees; ₹7,500 per month for Global Capability Centres (GCCs) 
• To encourage women participation: Women permitted to work night shifts with mandatory safety provisions
Strong Push for Future-Ready & Core Sectors
Additional, 25% incentives for priority sectors
1. Food Processing 
2. Sports Goods 
3. Textiles & Allied Industries 
4. Agro-Waste Processing
5. Auto & Auto Components 
6. ESDM (Electronics & Semiconductors) 
7. IT & ITeS, GCC 
8. Electric Vehicles
9. Defence & Aerospace
Balanced Regional Development
25% additional incentive for ALL units in Border districts and Kandi region
• Pathankot, Gurdaspur, Amritsar, Tarn Taran, Ferozepur, Fazilka 
• Kandi region as notified by under the notification 1462-SMAC-1(AC) 73/33147, dated 31.10.1973
Startup Ecosystem Strengthening
• Seed grant increased from ₹3 lakh to ₹5 lakh for early-stage startups 
• Second tranche of ₹10 lakh introduced for scaling startups 
• Preferential government procurement norms for state-supported startups 
• Innovation & Startup Hub to be established in Mohali, positioning it as the Silicon Valley of North India
Services Sector Growth Support
• IT/ITeS and GCCs: Included in 125% and Rental subsidy introduced 
• Healthcare: Incentives up to ₹50 crore for hospitals (minimum 50 beds) and medical colleges 
• Tourism: Capital subsidy up to ₹5 crore for tourism infrastructure 
• Film Tourism: Capital subsidy up to ₹10 crore for film studios/ film cities and Financial support of ₹3 crore on film/web-series cost of production 
• Higher Education: Incentives up to ₹50 crore for setting up new higher education institutions
Environment Sustainability Push for Existing units
• Capital subsidy up to ₹10 crore for setting up Zero Liquid Discharge (ZLD) systems 
• Capital subsidy up to ₹7.5 crore for switching to paddy-straw based boilers
Additional Support for Export Oriented Units
• Increased Freight subsidy up to ₹30 lakh annually for exporters 
• Financial support through PSIEC for participation in domestic and international exhibitions and trade fairs
Customized Package for Mega Investments
Committee for Approval of Customized Package set-up to approve customised incentive packages
• Thresholds: ₹500 crore and above – Manufacturing & other sectors 
• ₹250 crore and above – IT / ITeS projects 
• First 3 GCCs >1,000 employees to get a special package
Several Power Sector Reforms for Industry
• Power tariff for IT & ITeS, GCC and Data Cener at industrial rates 
• EV charging stations tariff fixed at ₹5/unit 
• Captive renewable energy limit hiked from 100% to 125% of sanctioned load 
• Dual grid option available wherever technically feasible 
• Small power load limit increased from 20 kW to 50 kW 
• Time-of-Day tariff structured in a manner that net effect will be minimal 
• Accelerated transition towards renewable and green energy for industry 
• Land aggregation policy for renewable energy projects
Labour Reforms: Win-win for Workers and Industry
• New Labour codes adopted to reduce regulatory burden on the industry and enhance employment 
• Daily working hours allowed up to 12 hours, weekly hours up to 72 hours, and quarterly overtime up to 144 hours 
• Labour department will accept Third-party certification allowed for building plans 
• Balanced Industrial Tribunals with 2 members (Judicial and Administrative)
Building & Construction Reforms for Industry
• Higher FAR – Unlimited FAR allowed on roads with a Right of Way (ROW) of 45 meters 
• Relaxed Setbacks – Setback norms have been rationalized to support efficient land use 
• Mixed Land Use – Mixed land use permitted along major urban corridors and TOD corridors 
• Risk-Based Inspection – Green category industries exempted from routine NOCs and adopt self-certification
Continued Focus on Ease of Doing Business
• Right to Business Act: self-declaration-based In-Principal Approvals in 5 - 18 days, deemed clearances under strict timelines 
• FastTrack Portal: Time bound digital single window approvals within 45 working days 
• Third-party and Self certification to streamline regulatory framework
Expansion of Industrial Land Bank
• Consolidated state industrial land bank to be made available on FastTrack Portal 
• Amended Private Industrial Park Policy to increase land supply for manufacturing sector
In Summary
The most comprehensive, the most flexible, the most future ready, the most employment friendly, the most environment friendly policy in the history of Punjab… … and India
Vision is Simple: Make Punjab #1 investment Destination
• Punjab attracted Industrial investment of ₹25,000 Cr in FY24; ₹55,000 Cr in FY25 and through this policy aims to attract ₹75,000 Cr in FY26