Some delicensed sectors

Cement, Granite - In 1991, the government de-licensed the cement industry. The growth of the
industry accelerated forthwith and majority of the industrialists invested heavily in the industry with
the awarded freedom. The industry started focusing on export also to double the opportunity
available for it in global markets. Today, the cement manufacturers in India have transformed into
leading Indian exporters of cement across the world.
The demand of cement in year 2009-2010 is expected to increase by 50 million tons despite of the
recession. With the constant effort made by cement manufacturers and exporters, India has become
the second largest cement producer in the world. Madras Cement Ltd., Associated Cement Company
Ltd (ACC), Ambuja Cements Ltd, Grasim Industries Ltd, and J.K Cement Ltd. are among few renowned
names of the major Indian cement companies.

Industrial Machinery - Among

the industries de-licensed were industrial machinery,
machine tools and other equipment.
The industries covered under the category of industrial machinery and is delicensed under
the current policy and eligible for automatic approval for foreign direct investment are:
Dairy Machinery Industry
Food Processing Machinery
Packaging Machinery Industry
Water Pollution Control Equipment
Air Pollution Control Equipment

automobiles - Automobile Industry was delicensed in July 1991 with the announcement of the
New Industrial Policy. The passenger car industry was, however, delicensed in 1993. No
industrial licence is required for setting up of any unit for manufacture of automobiles except
in some special cases. The norms for Foreign Investment and import of technology have also
been progressively liberalized over the years for manufacture of vehicles including passenger
cars in order to make this sector globally competitive. At present 100% Foreign Direct
Investment (FDI) is permissible under automatic route in this sector including passenger car
segment. The import of technology/technological upgradation on the royalty payment of 5%
without any duration limit and lump sum payment of USD 2 million is also allowed under
automatic route in this sector. With the gradual liberalization of the automobile sector since
1991, the number of manufacturing facilities in India has grown progressively.

The cumulative production data for April-January 2010 shows production growth of 23.07
percent over same period last year.

Domestic Sales

Passenger Vehicles segment during April-January 2010 grew at 25.21 percent over same
period last year. Passenger Cars grew by 24.75 percent, Utility Vehicles grew by 21.95
percent and Multi Purpose Vehicles grew by 37.05 percent in this period.

The overall Commercial Vehicles segment registered positive growth at 30.39 percent during
April-January 2010 as compared to the same period last year. Medium & Heavy Commercial
Vehicles (M&HCVs) registered growth at 20.58 percent, Light Commercial Vehicles grew at
39.66 percent.

Three Wheelers sales recorded a growth rate of 25.77 percent in April-January 2010. While
Passenger Carriers grew by 32.54 percent during April-January 2010, Goods Carriers grew at
4.20 percent.

Two Wheelers registered a growth of 23.74 percent during April-January 2010. Mopeds,
Scooters and Motorcycles grew by 31.73 percent, 20.56 percent and 24.32 percent
respectively.

Exports

During April-January 2010,overall automobile exports registered a growth rate of 13.24

percent.

Passenger Vehicles segment, Three Wheelers and Two Wheelers segments grew by 33.92
percent, 4.60 percent and 8.84 percent respectively in this period. Commercial Vehicles
recorded growth of (-) 7.52 percent.

Garment Sector

Fertilisers

Electronics

Animal fats and oils

Coal and Lignite

Petroleum refineries - The petroleum

refineries in India which are under government control are
to be completely deregulated by 2002 AD. The refineries can now charge competitive prices
after the government has linked the domestic prices of some petroleum products like
naphtha and furnace oil with international prices. The domestic prices of other products like
petrol, high speed diesel and aviation turbine fuel prices, which are currently based on the
landed cost of imports, would be deregulated over 1998-2002. The prices of kerosene are the
lowest in the world. India's oil pool deficit stands at around Rs182 billion. (pc). 100% fdi’s
are permitted in this sector.

Mineral Oils

Bulk drugs

Steel - Delicensing of steel industry under the liberalised industrial policy in July 1991 has resulted in attracting large scale
private investment in this sector. As a result of these new investments, the demand for raw materials like iron ore is
expected to increase manifold.
The demand for finished steel in the country is slated to go up at an annual average rate of around 11% during 2001-02 to
2011-12.
Electronics-
In India Electronics is still the fastest growing segment both in terms of production and exports.
With complete delicensing of the electronics industry with the exception of aerospace and defence
electronics, and alongwith the liberalization in foreign investment and export-import policies of the
entire economy, this sector is not only attracting significant attention as a enormous market but
also as a potential production base by international companies.

Consumer electronic products, such as colour TV, VCR/VCP, CD players and tape recorders,
which were licensable, have also been delicensed in the year 1996. With this, the electronics
industry as a whole, with the exception of aerospace and defence electronics, has been fully
delicensed. Fiscal, investment and trade policies for the electronics sector have also been
liberalised. All components, raw materials and capital goods are freely importable. Sector
specific schemes have been introduced to attract foreign investment and provide a duty free
environment for export of electronic hardware and software under the Export Oriented
schemes. Fiscal policy measures were launched to reduce duty rates from the earlier high
duty regime. This was done keeping in view the trends and developments in the global arena.
In the software sector, the import duty which was as high as 85 per cent in the early 90s has
been brought down to zero. India has also become a signatory to the Information Technology
Agreement to ensure penetration of Information Technology of global standards at all levels
in the society and thereby also agreeing to reduce tariff gradually to zero by the year 2002 for
many of the Information Technology products and by 2005 for all remaining products.

Sugar industry-

The Indian government delicensed the sugar industry in August (1998) and also
abolished the minimum economic size norm of 2,500 tonnes crushed per day (tcd).
The move has not made much of an impact on the domestic sugar industry. This is so
because entrepreneurs set up new wills to avail of the incentive of selling 100 percent
in the open market. Excess capacity is a major problem in the industry with licensed
capacity currently at 28.4 million tonnes. This despite the long drawn out process of
acquiring a letter of intent (LoI). The incentives led to a haphazard growth of the
industry with no economies of scale, Indian sugar industry is uncompetitive in world
markets. The new sugar policy does not address the problems of distribution controls
and levy sugar purchases by the government. It does not attempt to resolve the
problem of arrears or of sick mills in Uttar Pradesh and Maharashtra. (uh)

The entrepreneurs who wish to avail themselves of the de-licensing of sugar Industry would be required to file an Industrial

Entrepreneurs Memoranda (IEM) with the Secretariat of Industrial Assistance in the Ministry of Industry as laid down for all de-

llcensing Industries