Licences Required to Start a Manufacturing Unit in India

Licences and registrations to plan for

• Planning stage
  Udyam registration

  Free online registration that classifies you as micro, small or medium and unlocks MSME scheme benefits. Most inspectors and banks ask for it early.

• Before construction
  Building plan / layout approval

  A factory building, shed extension or change of use needs sanction from the development authority or industrial area authority before construction. Later approvals check the sanctioned drawing.

• Before installing machinery
  Pollution control consent (CTE / CTO)

  Consent to Establish before you install machinery and Consent to Operate before you start production, unless your activity falls in the exempt White category.

• Before borewell use
  Groundwater NOC

  Needed if you plan to draw groundwater for process or other use in a notified or non-notified area under the CGWA guidelines.

• Before occupation
  Fire NOC

  State fire service clearance on building design and again on installed fire-fighting systems. Stored raw materials and finished goods influence the fire risk class.

• Before production
  Factory licence

  Registration and licence of the factory under the Occupational Safety, Health and Working Conditions Code, 2020 (earlier the Factories Act, 1948) before manufacturing begins.

• Before first sale
  GST registration

  Required for supply of goods above the threshold, for inter-state supply and for claiming input tax credit on plant, raw material and services.

• On hiring
  EPF registration

  Employer registration with the EPFO once the establishment crosses the coverage threshold under the Code on Social Security and the EPF scheme.

• On hiring
  ESIC registration

  Health and cash-benefit insurance for eligible employees; applies to factories above the statutory headcount and wage ceiling.

• On engaging contractors
  Contract labour licence

  Principal employer registration and contractor licence where you engage contract workers beyond the threshold.

• Before operation
  Hazardous waste authorisation

  Needed if your process generates, stores or sends out hazardous or other wastes listed in the Hazardous and Other Wastes Rules, 2016.

• Before sale of notified products
  BIS / ISI certification

  Mandatory only for products covered by a Quality Control Order. Check the current list for your product before you commit to production.

• After hiring
  Labour welfare fund and professional tax

  State-level contributions that apply in many states including Delhi, Haryana and several others; each state has its own rules and slabs.

What changed with the Labour Codes

The four Labour Codes were brought into force on 21 November 2025. For a factory, the relevant one is the Occupational Safety, Health and Working Conditions (OSH&WC) Code, 2020, which subsumes the Factories Act, 1948 and the Contract Labour Act. Under the Code a factory means a premises with 20 or more workers where power is used, or 40 or more where it is not. The earlier Factories Act thresholds were 10 and 20, so small units that were factories earlier may no longer be covered, although a state can alter the threshold in its own rules.

The Central OSH&WC Rules were notified on 8 May 2026 and operate through the Shram Suvidha portal. For central-sphere establishments, Form-I is the application, and a licence in Form-III is to be issued within seven days or is treated as deemed. Existing licence holders are expected to update their details within six months of the Rules. Factories in most industries are, however, regulated by the state government, so the state rules decide your actual procedure.

Status as we last checked: Uttar Pradesh notified its final OSH&WC Rules on 27 August 2026, superseding its earlier factory rules. Haryana had published draft rules, and Delhi had published draft rules in 2025. Where state rules are not final, the legacy state Factories Rules continue during the transition, so your application may still be made under the older forms and fee schedule. Confirm on the state labour portal on the day you file.

The roadmap: what to apply for and in what order

Sequence matters because each approval refers to the previous one. A pollution board will ask for land documents and the sanctioned layout. The fire department will ask for the sanctioned plan. The factory licence inspector will ask for the pollution consent and the fire clearance. Applying out of order is the single biggest cause of query letters.

A workable sequence for a new unit is below.

• Choose the entity (company, LLP, firm or proprietorship), then obtain PAN, GST and Udyam registration.
• Secure land with an industrial or conforming-use status. In Delhi, check the conforming or non-conforming area status of the premises first, since the labour department will not process a factory licence for a non-conforming location.
• Get the building plan or layout sanctioned by the development authority or industrial area body.
• Apply for Consent to Establish from the state pollution control board, unless the activity is White category or you hold an Environmental Clearance that integrates it.
• Apply for groundwater permission if you will extract water, and for fire clearance on the building design.
• Install machinery and fire systems, then apply for Consent to Operate and the final fire NOC.
• Apply for the factory licence and register as an employer with EPFO, ESIC and the state welfare fund and professional tax authorities as applicable.
• Obtain hazardous waste authorisation and BIS certification if your product or process requires them, before commercial dispatch.

Pollution, water and waste approvals

Pollution control boards classify industries by pollution potential. The Central Pollution Control Board re-categorised industries in 2025 and introduced a Blue category for essential environmental services. White category activities are exempt from CTE and CTO and need only an intimation. Where a unit holds an Environmental Clearance, a separate CTE is not required, which was clarified in November 2024.

Consent to Operate validity for Red, Orange and Green categories is commonly five, ten and fifteen years respectively, but your state board's order governs. Industries drawing groundwater need a no-objection certificate through the CGWA portal, where the processing fee is ₹10,000 for a fresh application and ₹5,000 for renewal. Check whether your state has its own authority; Haryana, for example, routes cases through its Water Resources Authority.

If you generate hazardous waste such as used oil, solvents or process sludge, you need authorisation under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, a manifest for every shipment, and an annual return. Electroplating, dyeing, chemicals and engineering units are the usual cases.

Delhi, Uttar Pradesh and Haryana: where the process differs

Delhi: Applications go through the Labour Department on e-District, pollution consent is with the Delhi Pollution Control Committee and fire clearance with the Delhi Fire Service. Factory licensing is restricted to conforming industrial areas, and the department's published practice is to respond to queries quickly, so reply within the window stated on the portal. Delhi's OSH&WC rules were still in draft at our last check.

Uttar Pradesh: The state single-window system Nivesh Mitra is the entry point for most approvals, with the UP Pollution Control Board, UP Fire Services and the Labour Department linked to it. Since the UP OSH&WC Rules came into force on 27 August 2026, check the new forms and fee table rather than relying on older guides that quote the UP Factories Rules.

Haryana: Approvals run through the state single-window and HSPCB for pollution. Gurugram, Faridabad and Manesar have large industrial belts under HSIIDC, and allotment letters from the authority are usually required with each application. Haryana's draft OSH&WC rules had not been finalised when we last checked.

Recurring compliance calendar for a factory

Getting licensed is the easier half. The calendar below shows what a running unit typically owes. Dates differ by state, so treat them as the usual pattern and confirm against your state rules.

• Monthly: PF and ESIC contributions and returns, GST returns (GSTR-1 and GSTR-3B), TDS deposit, state professional tax where applicable, hazardous waste manifests for each dispatch.
• Quarterly: TDS returns, plus any producer-responsibility filings if you are a producer or importer of plastic packaging, electronics or batteries.
• Half-yearly or annual: labour welfare fund contribution in states that levy it, factory annual return, hazardous waste annual return (Form 4) by 30 June, environment statement to the pollution board.
• Annual: GST annual return where applicable, income tax and audit, factory licence renewal as per state rules, fire NOC renewal as per state fire rules, safety audit and medical examination of workers where required.
• Every few years: Consent to Operate renewal, fire system recertification, BIS licence renewal and groundwater NOC renewal.

Product-specific rules: BIS and quality control orders

If your product is covered by a Quality Control Order, you cannot manufacture or sell it without the BIS standard mark, whether through ISI certification or another BIS scheme. The list of covered products changes frequently, with orders being added and sometimes deferred, so we do not list products here. Check the Bureau of Indian Standards website and the DPIIT notifications for your product code before ordering machinery.

Separately, packaged goods must comply with the Legal Metrology (Packaged Commodities) Rules for declarations such as net quantity, month and year of manufacture, and consumer care details. Food, drug and cosmetic manufacturers face separate sector regulators, covered on their own pages.

Common pitfalls we see

• Starting production on a Consent to Establish alone. Operating without Consent to Operate is an offence even if all other approvals are in place.
• Mismatched addresses. The plot description in the sale deed, the sanctioned plan, the pollution application and the factory licence application must match exactly.
• Underestimating headcount. Contract and casual workers can count towards the factory threshold in many readings, so do not exclude them without checking.
• Skipping the manager or occupier nomination. The occupier is personally responsible under factory law, and a company must name a director as occupier.
• Letting the fire NOC lapse. Insurers and banks often ask for a valid certificate at claim or renewal time.
• Relying on guides written before the Labour Codes. Forms, fee tables and renewal rules have been changing state by state.

Frequently asked questions

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