FOIJ submits detailed proposals seeking key amendments to J&K Industrial Policy 2021–30

Jammu, 10-01-2026: A meeting of the Federation of Industries, Jammu (FOIJ), was convened under the chairmanship of Shri Virendra Jain and was attended by the co-chairmen, Shri Jatinder Aul, Shri Lalit Mahajan, and Shri S.C. Dutta, along with Shri Viraaj Malhotra, Secretary General, Shri Sanjay Langar, Convener, and other office bearers of the Federation.

During the meeting, members held detailed deliberations on the suggestions, amendments, and inputs proposed for inclusion in the Jammu and Kashmir Industrial Policy 2021–30. The Federation discussed the communication issued vide letter No. IC-DIC/17/2121-07 dated 23.12.2025, inviting stakeholder feedback on the proposed amendments. FOIJ appreciated the initiative taken by the Government of Jammu and Kashmir to seek industry inputs at this stage, with the objective of avoiding ambiguities and implementation challenges at later stages.

FOIJ also acknowledged the statement of the Hon’ble Chief Minister, Jenab Omar Abdullah Ji, wherein he assured that there has been no shortage of budgetary allocation from the Government of India and that adequate funds have been made available. In this context, the Federation emphasized that all fiscal incentives under the Industrial Policy should be reimbursed in a time-bound manner, in their true letter and spirit, without unwarranted riders, delayed filing conditions, or discriminatory treatment between existing and new units, irrespective of size, age or location. Equal importance must be accorded to protecting existing units, given their sustained contribution to employment generation.

With regard to the definition of “Substantial Expansion,” FOIJ recommended that it should explicitly include enhancement in capacity, addition or change of product lines, and modernisation, diversification, and technical upgradation.

The Federation also highlighted certain critical fiscal incentives that remain unattended in the proposed amendments and should be incorporated to ensure the survival and sustainability of local micro and small enterprises. These include turnover incentives, working capital subvention, marketing support, and the development and promotion of ancillarization. FOIJ stressed that these incentives should not be linked to investment size, age, or location and must remain applicable till the expiry of the Industrial Policy 2021–30.

It was pointed out that Turnover Incentives were earlier introduced to compensate for the withdrawal of the Toll Tax and CST exemptions and to offset losses arising from the inverted duty structure under the GST regime. FOIJ urged the continuation of Turnover Incentives and Working Capital Subvention as part of the State’s share of taxes to support micro and small units.

On marketing support, FOIJ noted that a large number of local units were established primarily to meet the procurement needs of government departments and agencies. These units have consistently supplied certified products to departments such as PDD, PHE, Forest, and Education. However, changes in procurement through the GeM portal have adversely affected local units, despite purchase preference provisions under previous industrial policies and Clause 4.11.3 of the Industrial Policy 2021–30. FOIJ urged restoration of effective purchase preference as marketing support, especially considering locational disadvantages and higher freight and production costs faced by local industries.

The Federation further proposed mandatory ancillarization, recommending that medium and large units procure at least 50 percent of their requirements from local micro and small units to promote industrial linkages and local capacity building.

Concerns were also raised regarding units affected by the inverted tax structure, where GST on raw material exceeds that on finished goods, resulting in reduced SGST refunds. FOIJ sought suitable compensation for such units to maintain competitiveness.

FOIJ requested an extension of the IGST refund on value addition for interstate sales for existing working units operational prior to 31.03.2021, whose reimbursement package expires in March 2027, up to the validity of the Industrial Policy.

Additional recommendations included enhancement of subsidy on solar power systems to 50 percent with a ceiling of ₹50 lakh, extension of stamp duty and court fee exemption to lease renewals and related legal changes, increase in subsidy limits for quality certification, automation, technology upgradation and pollution control devices, 100 percent subsidy on DG sets, uniform SGST incentives across zones, higher ceilings for fixed capital investment incentives, revival policy for sick units based on local criteria, multiplier incentives for manufacturing units, a single approval certificate for MSMEs, a separate policy for mega projects, alignment of the negative list with NCSS classification, simplified documentation norms, and mandatory stakeholder consultation before issuance of procedural guidelines.

The Federation urged the Government to consider these suggestions in a consultative manner to ensure a robust, inclusive, and implementable industrial policy that safeguards existing enterprises while promoting sustainable industrial growth in Jammu and Kashmir.

Point-wise Suggestions and Recommendations of the Federation of Industries, Jammu (FOIJ), on Proposed Amendments to J&K Industrial Policy 2021–30 are as under : 

1. Budgetary Assurance & Fiscal Incentives

   • Ensure adequate and uninterrupted budgetary support for reimbursement of all fiscal incentives.

   • Reimburse incentives in a time-bound manner without delayed filing conditions or unwarranted riders.

   • Apply incentives uniformly to existing and new units irrespective of size, age or location.

   • Protect existing units in view of their continued role in employment generation.

2. Definition of Substantial Expansion

   • The definition should explicitly include:

     • Enhancement in production capacity.

     • Addition or change of product line or manufacturing line.

     • Modernisation, diversification and technical upgradation.

3. Inclusion of Unattended Fiscal Incentives

   • Include the following incentives up to the expiry of Industrial Policy 2021–30:

     • Turnover Incentive

     • Working Capital Subvention

     • Marketing Support

     • Development and Promotion of Ancillarisation

   • These incentives should not be linked to investment size, age or location of micro and small units.

4. Turnover Incentive & Working Capital Subvention

   • Continue turnover incentive to offset withdrawal of:

     • Toll Tax Exemption

     • Central Sales Tax Exemption

   • Compensate losses under inverted duty structure introduced with GST (2017).

   • Provide turnover incentive and working capital subvention as State share of taxes for all micro and small units.

5. Marketing Support / Purchase Preference

   • Restore effective purchase preference for local manufacturers supplying to J&K Government departments.

   • Address adverse impact of GeM portal procurement on local units.

   • Extend marketing support considering locational disadvantages, higher freight and production costs.

   • Prevent closure of local units and large-scale unemployment.

6. Development & Promotion of Ancillarisation

   • Mandate medium and large units to procure a minimum of 50 percent of their requirements from local micro and small units.

   • Encourage vendor development and industrial linkages.

7. Inverted Tax Structure Compensation

   • Compensate units suffering due to higher GST on raw material and lower GST on finished goods.

   • Address loss of SGST refund to ensure competitiveness of existing units.

8. IGST Refund on Interstate Sales

   • Extend IGST refund on value addition for existing units operational prior to 31.03.2021.

   • Continue reimbursement beyond March 2027 till expiry of Industrial Policy 2021–30.

9. Subsidy on Solar Power Systems

   • Increase subsidy to 50 percent with a maximum ceiling of ₹50 lakh.

10. Exemption of Stamp Duty and Court Fee

    • Extend exemption beyond substantial expansion to include:

      • Lease renewals

      • Change in constitution

      • Mergers

      • Supplementary lease deeds

11. Subsidy on Quality Certification

    • Increase ceiling to ₹10 lakh for existing and new units.

    • Explicitly include BIS and ISI certifications.

12. Subsidy on Automation and Technology Upgradation

    • Increase subsidy to 50 percent with a ceiling of ₹25 lakh.

13. Subsidy on Pollution Control Devices

    • Extend subsidy to all pollution control devices including STP and ETP.

14. DG Sets

    • Provide 100 percent subsidy on purchase and installation of DG sets within approved capacity.

15. SGST Incentive

    • Provide SGST reimbursement uniformly across all zones and sectors.

    • Ensure 100 percent reimbursement of SGST paid to avoid unfair competition and market distortion.

16. Incentives for Fixed Capital Investment

    • Zone A: Ceiling of ₹5 crore

    • Zone B: Ceiling of ₹7.5 crore

17. Incentives for Filing Patents

    • Continue existing provisions without change.

18. Revival of Sick Units

    • Frame a separate revival policy based on local conditions.

    • Do not rely solely on RBI definitions.

    • Protect existing investments in micro and small units.

19. Multiplier Effect Incentive

    • Provide additional incentive equal to 1.25 times the eligible amount.

    • Applicable only to manufacturing units across all zones and sectors.

20. Single Approval Certificate for MSMEs

    • Introduce a single approval certificate applicable for all incentives and purposes.

    • Applicable to both existing and new MSMEs.

21. Mega Projects

    • Formulate a separate industrial policy exclusively for mega projects.

    • Provide dedicated budgetary allocation.

22. Negative List

    • Restrict the negative list strictly as per NCSS classification.

23. Documentation Simplification

    • Accept legal documents attested by a notary instead of a judicial or executive magistrate.

24. Stakeholder Consultation

    • Mandate stakeholder consultation before issuing procedural guidelines under the Industrial Policy.