Investing in Maharashtra: Incentives for Foreign Companies

Manufacturing incentives

The Maharashtra policy offers manufacturers a capital subsidy, support linked to state GST, production-linked payments and employment-linked support. The amounts depend on the project category and the area in which the plant is located, so read the figures below as examples, not as a promise.

• Capital subsidy: 20% of eligible fixed capital investment for MSME units in thrust sectors such as exports or circular economy, capped at INR 250 million, with an annual cap of INR 50 million.
• SGST support: 100% of gross SGST payable on first sale of eligible products in the state, capped at between 30% and 100% of fixed capital investment, for 5 to 10 years depending on area.
• Production-linked: 1% to 1.5% of incremental turnover for five years for select export units.
• Employment-linked: 50% of the employer's EPF contribution for five years in lower-ranked area groups.

Services and capability centres

The policy also covers services businesses, which makes it relevant to global capability centres. Services units can receive reimbursement of employer provident fund contributions, rental lease support, and skilling and research subsidies, with a requirement that at least 80% of employees be local.

The services benefits are capped by unit and, for some, limited to a set number of units, so early application matters. Mega and ultra-mega service units in tier-2 cities may receive additional incentives, subject to approvals. Minimum employment levels apply by category and area, and must be reached within two years of starting services. For capability centre projects, see GCC setup in India, and plan your hiring against the local-employment condition.

Project categories and sectors

Projects are classed as MSME, large, special large, mega or ultra-mega, and the category decides which incentives you can claim. The policy names 16 priority manufacturing sectors and 13 priority service sectors, including emerging areas such as semiconductors and green hydrogen.

Which category and area group your project falls in decides which of the amounts above apply, so work this out before you model returns. Units with fixed capital investment above INR 1,250 million that do not reach the special category thresholds are treated as large units. Thresholds for the special, mega and ultra-mega categories are in the policy document and were not stated in the summary we reviewed. Source: summary of the policy by PwC India, January 2026.

What to check before relying on any incentive

Incentive amounts, caps and eligibility are fixed by the current policy and its implementing orders, and they change. Many benefits must be sanctioned before you buy land or begin construction, and payment is usually made in instalments after investment, production and jobs are verified.

Before choosing a location, ask the state agency for the current government order in writing, confirm which project size and district category you fall in, and check whether benefits can be combined with central schemes. Ask when the sanction must be obtained, how long payment takes in practice, and what happens if you miss an employment or production target. We help foreign companies with each step, from choosing the state and setting up the Indian entity to structuring the investment and filing for incentives. Contact a partner.

This page is general information, not legal or tax advice. We summarise public descriptions of each policy; the official policy document is the authority.