Greenfield project management in India.

India offers central and state-level incentives that can materially reduce greenfield investment costs. The main categories are:

• Production Linked Incentive (PLI) schemes: provide turnover-linked cash incentives across 14 sectors including pharmaceuticals, food processing, electronics and automotive components
• Special Economic Zones: offer customs duty exemptions on capital equipment imports; income tax benefits on export earnings under Section 10AA are subject to a sunset clause and eligibility should be confirmed at the time of investment
• State industrial policies: Gujarat, Maharashtra, Tamil Nadu and Rajasthan typically include capital subsidies on fixed assets, electricity duty exemptions and stamp duty waivers

Eligibility criteria and incentive quantum vary significantly by state and sector, making early-stage incentive mapping an important part of location strategy.

Site selection involves assessing multiple interdependent factors that vary across states and industrial zones. Key considerations include:

• Industrial infrastructure: power reliability, water supply and road or port access within notified zones such as MIDC in Maharashtra or GIDC in Gujarat
• Supply chain proximity: clustering near established corridors such as the Delhi-Mumbai Industrial Corridor can reduce logistics costs significantly
• Labour market: availability and cost of skilled and semi-skilled labour varies substantially between tier-1 and tier-2 or tier-3 locations
• Regulatory environment: state-level single window clearance systems and proximity to eco-sensitive zones affect statutory approval timelines
• Incentive eligibility: state industrial policy benefits are often tied to specific notified zones or minimum investment thresholds

Site selection should ideally be completed before entity incorporation, as the chosen state can influence the optimal corporate and tax structure.

Setting up a greenfield manufacturing facility in India requires approvals across central, state and local authorities in two broad stages.

Pre-construction approvals include:

• Consent to establish from the State Pollution Control Board under the Environment Protection Act 1986
• Environmental impact assessment (EIA) clearance for projects above prescribed thresholds
• Factory plan approval under the Factories Act 1948

Post-construction approvals include:

• Consent for operation
• A factory licence
• Commercial registrations such as GST and import-export code

Approval timelines vary by state and project scale but typically span 6 to 18 months across the full pre-construction and construction phase.

Greenfield projects in India carry a distinct risk profile that requires structured mitigation at each project phase. The principal risks are:

• Land acquisition: securing clear title can be protracted under the Right to Fair Compensation and Transparency in Land Acquisition Act 2013
• Statutory approval delays: multi-authority processes create timeline risk, particularly for projects requiring environmental impact assessments
• EPC contractor performance: cost overruns and schedule slippage are common without milestone-linked payment structures and independent cost certification
• Infrastructure gaps: power reliability and water availability vary significantly between developed industrial zones and tier-2 or tier-3 locations

An independent project manager is the most effective way to contain these risks, with a remit covering contractor selection, approval tracking and cost certification across the construction lifecycle.

From site selection to first commercial production, a greenfield manufacturing facility typically takes 18 to 36 months depending on facility scale, sector and location. The timeline breaks down across three phases:

• Pre-construction approvals and detailed engineering: 6 to 12 months
• Construction and equipment installation: 9 to 18 months
• Commissioning and consent for operation: 2 to 4 months before commercial production can begin

Projects requiring EIA clearance or located in states without single window clearance systems tend to sit at the longer end of this range. For a broader overview of setting up manufacturing operations in India, see Acclime’s guide to setting up a manufacturing plant.