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Revision in criteria for Industrial Entrepreneur Memorandum acknowledgement

The Department for Promotion of Industry and Internal Trade (“DPIIT”), vide Press Note 1 (2025 series) dated April 1, 2025 (“Press Note”), has revised the criteria for Industrial Entrepreneur Memorandum (“IEM”) acknowledgement raising investment and turnover thresholds to encourage industrial growth. This change follows the gazette notification dated March 21, 2025 (“MSME Notification”), issued by the Ministry of Micro, Small, and Medium Enterprises (“MSME Ministry”), which updated the classification norms for Micro Enterprise, Small Enterprise and Medium Enterprise (“MSME”).

Prior to the Press Note, all the industrial undertakings that were exempt from the compulsory licensing requirement under the Industries (Development and Regulation) Act, 1951 and had investment in the plant and machinery/equipment above INR 50,00,00,000 (Indian Rupees fifty crore) or annual turnover above INR 250,00,00,000 (Indian Rupees two hundred and fifty crore) were required to file information relating to setting up of industries in Form IEM. Confirmation for receipt of this information, issued by DPIIT, is known as the IEM acknowledgment.

Under the MSME Notification, the MSME Ministry increased the upper threshold for an enterprise to be classified as a MSME. Now, an enterprise will be classified as a medium enterprise if its investment in the plant and machinery/equipment does not exceed INR 125,00,00,000 (Indian Rupees one hundred and twenty-five crore) or annual turnover does not exceed INR 500,00,00,000 (Indian Rupees five hundred crore).

Accordingly, to maintain congruity between both the eligibility criteria, DPIIT has also revised the thresholds and now enterprises will be required to obtain IEM acknowledgment if they have an investment in plant and machinery or equipment exceeding INR 125,00,00,000 (Indian Rupees one hundred and twenty-five crore) or an annual turnover exceeding INR 500,00,00,000 (Indian Rupees five hundred crore).

All the eligible industrial undertakings may file for IEM acknowledgement through G2B Portal under the new criteria.

Conclusion

With this revision, DPIIT aims to provide relaxation to MSMEs from an additional compliance burden, foster industrial growth, encourage higher investments and position India as a global manufacturing hub. The Press Note will definitely be a step towards promoting ease of doing business in India.

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