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Industrial Policy in India was introduced on 6 April 1948. The policy resolution laid stress on the role of the state in the development of industry. Later on several modifications and amendments were made. The year 1991 witnessed a drastic change in the industrial policy governing industrial development in the country since decades. The Government of India introduced the new Industrial Policy on 24 July 1991. The main objectives of the policy are: (1) to maintain a sustained growth in productivity; (2) to enhance gainful employment; (3) to achieve optimal utilisation of human resources; (4) to attain international competitiveness; and (5) to transform India into a major partner and player in the global arena. The policy focus is on (1) deregulating Indian industry; (2) allowing the industry freedom and flexibility in responding to market forces; and (3) providing a policy regime that facilitates and fosters growth of Indian industry.

Some of the important policy measures announced and procedural simplifications undertaken to pursue the above objectives are (1) liberalization of industrial licensing policy; (2) introduction of Industrial Entrepreneurs’ Memorandum; (3) liberalization of the locational policy; (4) policy for small scale industries; (5) non-resident Indian scheme; (6) Electronic Hardware Technology Park (EHTP)/Software Technology Park (STP)scheme; and (6) policy for Foreign Direct Investment.