How Gujarat’s new industrial policy pays more to invest in backward talukas

Gujarat’s new industrial policy, in force since 1 June 2026 for five years, ties the support a business gets to where it sets up, and the State has now revised the classification of its talukas that decides those incentives.

What changed

The Industries and Mines Department has reclassified 268 talukas across all 34 districts: 130 fall in Category A and 138 in Category B, according to the announcement. The aim is to push investment beyond the established industrial belts around Ahmedabad, Vadodara, Surat and Bharuch into less developed areas. Reports differ on the exact scheme; one government resolution refers to three categories covering 251 talukas, so businesses should check the official notification for their taluka.

What the incentives are

Micro, small and medium enterprises (MSMEs) can claim between 35% and 45% of their investment as incentives, depending on the taluka’s category, by choosing a capital subsidy, an interest subsidy or reimbursement of power tariffs. Larger projects get their own packages, including a new “Ultra Mega Industry” category for investments of ₹10,000 crore or more that create at least 3,000 jobs.

Why it matters

Gujarat is one of India’s most industrialised States, but investment is concentrated along the Delhi-Mumbai corridor in its east. Tying incentives to backward talukas is meant to spread jobs more evenly, especially into the tribal belt and Saurashtra and Kutch.

What to do

Businesses planning to invest should check their taluka’s category and the conditions in the scheme guidelines before committing; incentive rates vary with the size of the enterprise and the sector.