Maharashtra Industrial Policy 2025 vs Package Scheme of Incentives (PSI) 2019

What Has Changed in Industrial Incentives in Maharashtra?

Maharashtra has long supported industrial investment through government incentive schemes. One of the most important schemes was the Package Scheme of Incentives (PSI) 2019, which provided financial benefits to new manufacturing projects across the state.

In 2025, the Government of Maharashtra introduced a new framework called the Maharashtra Industries, Investment and Services Policy 2025, which expands the scope of incentives and introduces several new programs.

However, many investors are confused about the current status of these two policies. Is PSI-2019 still applicable? Has the 2025 policy fully replaced it?

This guide explains the relationship between the two policies and highlights the major differences in simple terms.

Understanding the Two Policies

Package Scheme of Incentives (PSI-2019)

The Package Scheme of Incentives 2019 was introduced by the Maharashtra government to encourage industries to invest in less developed areas of the state.

The scheme officially operated from:

1 April 2019 to 31 March 2024 or until a new incentive scheme replaces it.

The main objective of PSI-2019 was to:

• attract manufacturing industries
• encourage regional industrial development
• generate employment
• support MSMEs and large industries.

Most incentives were focused on manufacturing projects.

Maharashtra Industries, Investment and Services Policy 2025

The Industrial Policy 2025 is the new policy framework introduced by the Maharashtra government to promote:

• manufacturing industries
• service sector investments
• technology industries
• large strategic projects
• employment generation.

Unlike PSI-2019, the new policy also includes dedicated incentives for the service sector, such as IT services, business process outsourcing, and technology companies.

Current Status of the Two Policies

Although the Industrial Policy 2025 has been announced, many of the detailed government resolutions required to implement its incentives are still being issued.

Because of this transition period:

• PSI-2019 continues to guide many industrial incentive approvals in practice
• The 2025 policy will gradually replace it as new incentive rules are implemented

This is a normal process when governments introduce new industrial policies.

Key Differences Between PSI-2019 and Industrial Policy 2025

1. Scope of Industries Covered

PSI-2019

The scheme primarily focused on manufacturing industries, including:

• engineering
• chemicals
• food processing
• biotechnology manufacturing
• IT manufacturing.

Service sector companies were generally not covered extensively under this scheme.

Industrial Policy 2025

The new policy significantly expands the scope.

It includes incentives for:

• manufacturing industries
• service sector companies
• technology companies
• innovation-driven industries
• strategic large investments.

This reflects the changing nature of the economy where services and technology play a major role in job creation.

2. Industrial Promotion Subsidy (SGST Reimbursement)

One of the most important incentives under both policies is the Industrial Promotion Subsidy (IPS).

This incentive reimburses part of the State GST paid by companies.

Under PSI-2019

Under Industrial Policy 2025

The policy proposes higher SGST reimbursement for several categories of industries, especially strategic investments and MSMEs.

The exact structure depends on the specific incentive rules issued under the policy.

3. Incentive Limits Based on Location

Both policies encourage industries to invest in less developed regions of Maharashtra.

Districts are classified into categories such as:

• Group A (developed areas)
• Group B
• Group C
• Group D
• Group D+ (least developed areas)

Under both policies, industries located in backward regions receive higher incentives.

This approach promotes balanced regional development across the state.

4. Employment Requirements

PSI-2019

Employment was mainly used as an eligibility condition.

For example:

• Large projects had to create minimum jobs
• At least 80% of employees had to be local residents.

Industrial Policy 2025

The new policy goes further and introduces direct incentives linked to job creation.

For example:

• reimbursement of part of the employer’s EPF contribution
• incentives for companies generating large numbers of jobs.

This reflects a shift toward employment-focused industrial policy.

5. Service Sector Incentives

This is one of the biggest changes introduced in the 2025 policy.

PSI-2019

The scheme was primarily designed for manufacturing industries.

Industrial Policy 2025

The new policy includes incentives specifically for service companies such as:

• IT and IT-enabled services
• BPO and KPO companies
• financial services
• technology and innovation companies.

These incentives include:

• EPF reimbursement
• rental lease subsidies
• electricity duty exemptions
• workforce training subsidies.

The goal is to create approximately 35 lakh new jobs in the service sector.

6. New Strategic Incentives

The 2025 policy introduces several new initiatives that did not exist under PSI-2019.

Import Substitution Incentives

Companies manufacturing products that replace imports can receive:

• additional capital incentives
• support for research and development
• reimbursement for technology transfer.

Anchor–Vendor Ecosystem

Large industrial projects are encouraged to build supply chains with local MSME vendors, helping smaller companies grow alongside large manufacturers.

Major Shift in Maharashtra’s Industrial Strategy

The transition from PSI-2019 to the Industrial Policy 2025 reflects a broader shift in economic priorities.

PSI-2019 mainly focused on:

• manufacturing investment
• regional industrial development
• infrastructure support.

The 2025 policy focuses on:

• employment generation
• technology industries
• service sector growth
• innovation and research
• supply chain development.

Conclusion

The Package Scheme of Incentives (PSI-2019) played a major role in promoting manufacturing investment in Maharashtra between 2019 and 2024.

The Maharashtra Industries, Investment and Services Policy 2025 builds on that framework by expanding incentives to new sectors such as services, technology industries, and innovation-driven businesses.

While the new policy has been announced, its detailed incentive rules are still being implemented gradually. As a result, PSI-2019 continues to guide many industrial incentive approvals during the transition period.

For investors planning projects in Maharashtra, understanding both policies is important to determine which incentives may apply to their investment.

Planning an Investment in Maharashtra?

Government incentives under PSI-2019 and the Industrial Policy 2025 can significantly reduce project costs. However, eligibility depends on project structure, district classification, and compliance requirements.

Get a structured incentive assessment to understand the benefits available for your project.

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