Industrial units having investment exceeding Rs. 10 Crore in plant and machinery are classified as large industrial units. An Entrepreneur or a company desirous to set up a large project needed an approval in the form of industrial license from Government of India (GOI) under the provisions of Industries (Development and Regulations) Act, 1951. In July 1991, Government of India liberalized the licensing procedure and exempted almost all the industries from the purview of industrial licensing, except a few industries which are of strategic importance. As per the present licensing procedure, only two industries are reserved for public sector and four industries, which are of strategic importance, need an industrial license. The rest of industries are required to file Industrial Entrepreneur’s Memorandum (IEM) with Secretariat for Industrial Approval, Ministry of Commerce & Industry, Government of India, on observing certain requirements with respect to location and environment. In the case of setting up of an Export Oriented Unit (EOU) or setting up a project in Special Economic Zone (SEZ), a Letter of Permission (LoP) is required to be obtained from the Development Commissioner of the concerned SEZ. Thus, the procedure for setting up a large industrial unit would be either filing of IEM, obtaining Letter of Intent (LOI)/ Industrial License or obtaining Letter of Permission (LoP) in the case of 100% EOU or SEZ unit.

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