Starting a manufacturing unit in Delhi requires careful planning, suitable industrial premises and compliance with the registrations applicable to the nature and scale of your manufacturing activities.
Requirements may differ depending on the type and category of products you plan to manufacture, the manufacturing process, use of machinery or power, number of workers and the unit's environmental impact. Therefore, it is important to identify the applicable registrations and approvals before starting production.
At Remind Legal LLP, we assist businesses with registrations, documentation and regulatory compliance required for setting up a manufacturing unit in Delhi.
Planning to start a manufacturing unit in Delhi? Get professional assistance with the applicable registrations and compliance requirements.
A manufacturing unit involves more than registering a business. The premises, manufacturing process, machinery, workforce, environmental impact and products may all be subject to different regulatory requirements.
Obtaining the applicable approvals before starting operations can help avoid penalties, operational disruptions and compliance issues. It also helps establish a proper foundation for production, employment and future expansion.
Step 1: Choose Business Structure
The first step is to choose a suitable and appropriate legal structure for the manufacturing business.
Common options include: -
The choice should depend on factors such as ownership, liability, investment requirements, taxation and future expansion plans.
A Private Limited Company or LLP may be considered where the founders want a formal structure with limited liability, while a proprietorship or partnership may be suitable for certain smaller businesses.
Step 2: Complete PAN, TAN & Basic Business Registration
Obtain PAN for the proprietor or business entity, as applicable, for the taxation and business-related transactions.
If you establish an LLP or company, complete the applicable incorporation process and obtain the relevant incorporation documents.
TAN, Where Applicable
TAN is not required merely because you operate a manufacturing business. It becomes applicable where the business is required to deduct or collect tax at source (TDS/TCS) under the applicable tax provisions.
Step 3: Select a Compliant Industrial Premises
The manufacturing unit should be established at premises where the proposed manufacturing activity is permitted under the applicable land-use and the local regulations.
For a factory covered under the Factories Act, the Delhi Labour Department states that the premises should be located in a conforming industrial area. It also identifies an alternate emergency staircase as a basic requirement for obtaining a factory licence.
Before taking premises on rent or purchase, it is therefore advisable to verify whether the location and proposed manufacturing activity are permitted.
Step 4: Factory Building Plan Approval & Factory Licence, Where Applicable
If the premises qualify as a factory under the applicable law, registration and licensing requirements need to be completed before operations begin.
In Delhi, the Factories Act generally applies where a manufacturing process is carried out with 10 or more workers using power or 20 or more workers without the use of power. Certain notified categories, including chemical factories, may have different applicability.
The applicable building plan and factory licence requirements should be addressed based on the proposed premises, manufacturing process, machinery and workforce.
Running a factory without the required registration and licence can attract penalties under the applicable law.
Step 5: Open a Current Bank Account
Open a current bank account in the name of the business.
The account can be used for receiving customer payments, paying suppliers, managing manufacturing expenses and maintaining business transactions.
Banks generally require business registration documents, PAN and KYC documents of the proprietor, partners or directors, depending on the business structure.
Step 6: GST Registration, Where Applicable
GST Registration should be obtained where required under the applicable GST provisions.
The requirement depends on factors such as turnover, nature of supplies and applicable compulsory-registration provisions.
A manufacturing business should assess the GST applicability based on its actual operations rather than assuming that registration is automatically required merely because it manufactures goods.
Step 7: DPCC Consent, Where Applicable
Manufacturing activities that fall within the applicable pollution-control framework may require approval from the Delhi Pollution Control Committee (DPCC).
Depending on the activity, this may involve Consent to Establish (CTE) before setting up the unit and Consent to Operate (CTO) before commencing operations, subject to the applicable requirements. DPCC's consent framework regulates industrial activities based on applicable pollution-control requirements.
The applicable category and consent requirements depend on the nature of the manufacturing activity, processes, emissions, waste and other environmental factors.
Step 8: Municipal & Utility Approvals, Where Applicable
Depending on the premises and manufacturing activity, additional municipal or utility-related approvals and documents may be required.
This may include applicable municipal permissions, electricity connection/load documentation and other premises-related approvals.
The exact requirements depend on the location, building, machinery and nature of the manufacturing unit.
Step 9: Fire Safety NOC, Where Applicable
A Fire Safety NOC or applicable fire-safety approval may be required depending on the premises, building use, area, occupancy, storage and nature of manufacturing activity.
This becomes particularly important where the unit involves combustible materials, chemicals, machinery or other fire-related risks.
The applicable fire-safety requirements should be assessed before commencing operations.
Step 10: Labour Compliance, Where Applicable
A manufacturing unit must comply with applicable labour and workplace requirements based on its workforce and operations.
This may include requirements relating to: -
For factories covered under the applicable factory legislation, additional health, safety and welfare requirements may also apply.
Step 11: EPF & ESI, Where Applicable
EPF and ESI are applicable based on the establishment, employee strength and other statutory conditions.
A manufacturing unit should assess its workforce and determine whether EPF and ESI registration and ongoing compliance are required.
These are therefore where-applicable requirements and are not mandatory solely because the business is a manufacturing unit.
Step 12: Udyam Registration – Recommended for Eligible MSMEs
If the manufacturing unit qualifies as a Micro, Small or Medium Enterprise, Udyam Registration can be considered.
It is not mandatory merely because you are starting a manufacturing business. However, eligible manufacturing businesses may consider Udyam Registration for applicable MSME benefits and schemes.
The official Udyam portal provides for online registration based on self-declaration and issues a permanent registration number and certificate.
Step 13: Trademark Registration – Optional but Advisable
Trademark Registration is optional but it's highly advisable if the manufacturing business sells products under its own brand name or logo.
Registering the relevant trademark can help protect the brand identity and reduce the risk of others using a similar mark for the related goods or services.
It is generally useful to consider trademark protection at an early stage, particularly before investing substantially in branding and marketing.
Step 14: IEC – Where Import/Export Activities Are Involved
If the manufacturing unit plans to import raw materials, machinery or other goods or export manufactured \products, an Importer Exporter Code (IEC) may be required, subject to applicable exemptions.
IEC is therefore not required merely because you operate a manufacturing unit. It becomes relevant when the business undertakes import or export activities for which IEC is mandatory.
Additional approvals may apply depending on the product, manufacturing process, machinery and materials used.
For example, FSSAI requirements may apply to food manufacturing, Legal Metrology requirements may apply to certain packaged commodities and additional environmental or safety approvals may apply to hazardous or regulated manufacturing activities.
A Boiler Registration may also be required where a boiler is used. Similarly, additional compliance may apply where the unit engages contract labour or handles specific types of waste or hazardous substances.
These requirements should be assessed according to the actual manufacturing activity rather than treated as mandatory for every manufacturing unit.
Documents Required
The required documents depend on the business structure, premises and manufacturing activity.
Basic Documents
Business Registration Documents
Factory & Premises Documents
Other Documents
Depending on the applicable registrations, additional documents may include: -
A properly registered and compliant manufacturing unit can help you: -
Estimated Timeline
The overall timeline depends on the type of registrations required, completeness of documentation and processing time taken by the respective government authorities.
Since different approvals are issued by separate departments, the time required may vary depending on the nature and scale of your manufacturing unit.
For example, factory licensing may involve inspection of the premises, while environmental or sector-specific approvals may involve separate assessment requirements.
Government Fees
Government fees vary depending on the applicable registration, licence category and regulations applicable at the time of application.
For example, factory licence fees in Delhi can vary according to factors such as installed horsepower and the maximum number of workers.
Professional fees depend on the scope of services required and the specific compliance requirements of your manufacturing unit.
Starting a manufacturing unit involves multiple registrations and regulatory requirements that can vary according to the manufacturing process, premises, workforce and products.
Remind Legal LLP can assist businesses with identifying the applicable registrations, preparing documentation and completing the required compliance process for setting up a manufacturing unit in Delhi.
Our Services Include: -
Planning to start a manufacturing unit in Delhi? Get professional assistance with the applicable registrations and compliance requirements.