AEROSPACE MANUFACTURING IN INDIA
The global Aerospace industries’ growth will be supported by market expansion in developing countries like India. The aerospace market in India is expected to grow at a rate of 10 percent as the Government of India is focused on driving indigenous manufacturing sector. To promote investment in India the government has come up with various fiscal and infrastructural incentives at National as well as State levels.
There is huge opportunity to invest in India in Aerospace particularly at MIHAN, Nagpur in India where Dassault, Boeing MRO, AAR INDAMER MRO are already operational and THALES, TAL (Tata Aeronautics Ltd), WEARE Group of France are under construction. Dassault Reliance Aeronautics Limited (DRAL) is currently manufacturing FALCON-2000 followed by Rafale in coming times.
MIHAN means Multi Model International Cargo Hub and Airport in Nagpur (Exact Centre of India) is a cargo and passenger hub development initiate by Government of India on same lines of Singapore. It is spread over 4053 hectares of land having SEZ and Non-SEZ zones. With this there is huge opportunity in Aerospace under Make in India initiative by Government of India especially in MRO, Sub-contracting – electrical, electronic mechanical engineering and metal working etc areas.
KEY HIGHLIGHTS ON WHY TO SET UP IN MIHAAN
Ample availability of land at very reasonable rate i.e. 0.09 million euros per acre.
Government is giving grant for common facilities of 2.3 million euros which may reduce CAPEX to extent of 40-50%
Negligible Cost of borrowing due to interest subsidy
Negligible cost of borrowing due to interest subsidy
Income tax exemption for 15 years, no import duty, GST and other taxes in SEZ area.
Cheap electricity fixed rate at 0.05 euro per unit.
Ready India counterparts who can enter into Joint Venture.
Investment, mainly of technical know-how and credentials at established entity required.
Fiscal and Non -Fiscal Incentives
Multi-product Special Economic Zone (Area – about 1340 Ha.); State of the art physical and social infrastructure: 2 to 6 lane roads; Dual water supply system; Sewage treatment plant; Telecom network; Street lights, T&D network etc.
Investment envisaged about 5,000 Cr (625 Million Euro) in SEZ.
Economical cost of labour.
Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units;
External commercial borrowing by SEZ units up to US $500 million in a year; without any maturity restriction through recognized banking channels; Single window clearance for Central and State level approvals; Exemption from other levies as extended by the State Government; 100% FDI allowed; Public Utility Service (PUS) status.
The unit will qualify as an anchor unit based on following pre-condition:
It should have qualified a mega or an ultra mega project.
It should have confirmed order book of USD 100 million as on the date of application, form MOD or similar bodies worldwide.
Upto a maximum of 10 anchor units
CLUSTER OF AEROSPACE MANUFACTURING UNITS
A cluster is a group of enterprises located within an identifiable and as far as practicable, contiguous area or a value chain that goes beyond a geographical area and producing same / similar products / complementary products/ services, which can be linked together by common physical infrastructure facilities that help address their common challenges.
The GoI grant will be restricted up to Rs. 18 Cr. or 90% of the cost of Project, whichever is lower. GoI grant will be 90% for CFCs in NE & Hill States, Island territories, Aspirational Districts / LWE affected Districts, Clusters with more than 50% (a) micro/ village, (b) women owned, (c) SC/ST units.
The cost of Project includes cost of Land (subject to maximum of 25% of Project Cost), building, pre-operative expenses, preliminary expenses, machinery & equipment, miscellaneous fixed assets, support infrastructure such as water supply, electricity and margin money for working capital and other tangible assests.
Adaptive reuse of the unutilized / partially utilized buildings and assets under Public & Private Sector would be encouraged under the scheme.
There should be a minimum of 20 MSE (10 in special cases) cluster units serving as members of the Special Purpose Vehicle (SPV).
PACKAGE SCHEME OF INCENTIVES BY MAHARASHTRA GOVERNMENT
Interest Subsidy: The amount of interest subsidy will be calculated @ effective rate of interest, after deducting the interest subsidy receivable from any institution or under any Govt. of India Scheme and the penal/compound interest or 5% per annum, whichever is less. The quantum of interest subsidy payable every year will not exceed the bills paid for electricity consumed during the relevant year
Exemption from electricity duty: exempted from payment of Electricity Duty during eligibility period not exceeding 15 years.
Waiver from stamp duty: New Units as well as Units undertaking Expansion/ Diversification (including Mega and Ultra Mega Projects) will be exempted from payment of Stamp duty during the Investment period.
Power Tariff Subsidy: Eligible New Micro, Small and Medium Enterprises (MSME) will be eligible for power tariff subsidy. The subsidy will be to the tune of Rs 1/- per unit for the Units located in Vidarbha, Marathwada, North Maharashtra and the Districts of Raigad, Ratnagiri and Sindhudurg in Kokan Region and Rs 0.50 per unit for the Units in other areas of the State for a period of 3 years from the date of commencement of commercial production, for the energy consumed and paid.
Capital Subsidies to MSMEs
5% subsidy on capital equipment for Technology Up–gradation, subject to a maximum of Rs.25 lacs
75 % subsidy on the expenses incurred on quality certification limited to Rs. 1 Lakh.
25% subsidy on capital equipment for cleaner production measures, limited to Rs.5 Lakhs
75 % subsidy on the expenses incurred on patent registration limited to Rs. 10 Lakh for the National patents and Rs. 20 lakh for the International patents.
Incentives for Credit Rating of MSMEs in all categories of areas
7 5% of the cost of carrying out Credit Rating by Small Industries Development Bank of India/ Government accredited Credit Rating Agency, limited to Rs. 40,000.
New MSMEs, LSI and Expansion thereof will be eligible for the following incentives in all categories of areas –
75% of cost of water audit limited to Rs. 1.00 lakh.
75% of cost of energy audit limited to Rs. 2.00 lakh.
50% of the cost of Capital Equipment under the measures to conserve/recycle water, limited to Rs. 5 lakh
50% of the cost of Capital Equipment for improving energy Efficiency, limited to Rs. 5 lakh.
The amount of incentives to be disbursed to the MSMEs and LSI Units every year will be limited to the total quantum of incentives divided by the number of years as per the applicable Eligibility period with the provision of carrying forward the differential between the actual sanctioned amount for a given year and the yearly disbursement limit
Example: If the unit is eligible for the total quantum of Rs.1000 and the E.C. period is 10 years, then actual incentives disbursed to such unit, shall not exceed Rs.100 (1000/10) in a given year even though the amount of total incentives sanctioned for that year is more than Rs. 100. The difference (yearly sanctioned amount minus yearly disbursement limit) can be carried forward for the Subsequent years of E. C. period, such that the actual disbursement of incentives is not more than Rs.100 in any year.
Central Facility Building
Dry Port at Sindi in Wardha
Area Approx. 142 Ha (350 acre)Investment @500 cr (65 Mn Euro)
Facilities for EXIM based industries such as:
Office of Central Drug Standard Control Org.
Custom clearance, Container freight station
Warehousing, Cold storage, Liquid storage
Estimated traffic generation around 30000 TEUs by 2030
Dry Port is about 30 km from MIHAN
Connected with Samruddhi Corridor, Central Railway, and National Highway.
Land allotment and approval.
SEZ Approval and connecting with Indian Partner for JV.
Incorporation of Company.
Execution of joint venuture agreements ,technical collaboration agreements and incorporating JV company.
Business Plan Prepration.
Getting all government subsidy.