The Department of Industrial Policy & Promotion was established in 1995 and has been reconstituted in the year 2000 with the merger of the Department of Industrial Development. Earlier separate Ministries for Small Scale Industries & Agro and Rural Industries (SSI&A&RI) and Heavy Industries and Public Enterprises (HI&PE) were created in October, 1999.

With progressive liberalisation of the Indian economy, initiated in July 1991, there has been a consistent shift in the role and functions of this Department. From regulation and administration of the industrial sector, the role of the Department has been transformed into facilitating investment and technology flows and monitoring industrial development in the liberalised environment.

The role and functions of the Department of Industrial Policy and Promotion primarily include:

• Formulation and implementation of industrial policy and strategies for industrial development in conformity with the development needs and national objectives;

• Monitoring the industrial growth, in general, and performance of industries specifically assigned to it, in particular, including advice on all industrial and technical matters;

• Formulation of Foreign Direct Investment (FDI) Policy and promotion, approval and facilitation of FDI;

• Encouragement to foreign technology collaborations at enterprise level and formulating policy parameters for the same;

• Formulation of policies relating to Intellectual Property Rights in the fields of Patents, Trademarks, Industrial Designs and Geographical Indications of Goods and administration of regulations, rules made there under ;

• Administration of Industries (Development & Regulation) Act, 1951

• Promoting industrial development of industrially backward areas and the North Eastern Region including International Co-operation for industrial partnerships and

• Promotion of productivity, quality and technical cooperation.

Department of Industrial Policy & Promotion is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view the national priorities and socio-economic objectives. While individual Administrative Ministries look after the production, distribution, development and planning aspects of specific industries allocated to them, Department of Industrial Policy & Promotion is responsible for the overall Industrial Policy.

Department of Industrial Policy and Promotion monitors the industrial growth and production, in general, and selected industrial sectors, such as cement, paper and pulp, leather, tyre and rubber, light electrical industries, consumer goods, consumer durables, light machine tools, light industrial machinery, light engineering industries etc., in particular. Appropriate interventions are made on the basis of policy inputs generated by monitoring and periodic review of the industrial sector. The Department studies, assesses and forecasts the need for technological development in specific industrial sectors. On this basis, it plans for modernization and technological upgradation of the Indian industry so that, it keeps pace with the international developments in industrial technology on a continuing basis.

The Department is also responsible for facilitating and increasing the FDI  inflow in the country. Foreign Investment Promotion Board (FIPB), now located in Department of Economic Affairs, Ministry of Finance, provides a time bound, transparent and pro-active FDI regime for approval of FDI investment proposals. The Department also plays a pro-active role in resolution of the problems faced by foreign investors in implementation of their projects through Foreign Investment Implementation Authority (FIIA), which interacts directly with the Ministry/State Government concerned.

The Department is responsible for encouraging acquisition of technological capability in various sectors of the industry through liberal foreign technology collaboration regime. Foreign technology induction is facilitated both through FDI and through Foreign Technology Collaboration (FTC) agreement. FTC agreements are approved either through the automatic route under the delegated power exercised by the RBI or by the Government.

In tune with its role as a facilitator of industrial development and investment, the Department plays an active role in investment promotion through dissemination of information on investment climate and opportunities in India and by advising prospective investors about licensing policy and procedures, foreign collaboration and import of capital goods etc. The information about policy and procedures is also available at internet website (http://dipp.nic.in/) of the Department.

Department of Industrial Policy and Promotion is also responsible for Intellectual Property Rights relating to Patents, Designs, Trade Marks and Geographical Indication of Goods and oversees the initiative relating to their promotion and protection. These include the outlining of policy and its implementation through the Office of the Controller General of Patents, Designs and Trade Marks. It promotes awareness regarding protection of the Intellectual Property Rights inherent in industrial property in conjunction with the World Intellectual Property Organisation (WIPO) and apex industry organisations apart from similar initiatives involving regional industry associations. It also provides inputs on various issues relating to the Agreement on Trade Related Aspects of Intellectual Properties (TRIPS) related to World Trade Organisation (WTO) in these fields.

The Department undertakes technical cooperation programmes with the World Intellectual Property Organisation (WIPO), Geneva for the modernisation and upgradation of intellectual property administration relating to patents, designs, trademarks and geographical indications and the organization of  Human Resource Development  and awareness generation activities in the country.

The Department is the nodal point for the promotion of productivity in the industrial sector. It undertakes programmes of technical cooperation with the Asian Productivity Organisation (APO), Tokyo by sourcing experts to advise on productivity related projects and by deputing officials from the private and public sector to programmes conducted by the APO in the industry, agriculture and service related sectors. It also promotes the adoption of quality standards relating to the ISO 9000/14000 series through the accreditation services provided by National Boards for Certifying Bodies and Auditors and Trainers under the Quality Council of India, which has been certified by international accreditation bodies.

International cooperation for industrial partnerships is achieved through both bilateral and multilateral arrangements. At bilateral level, in addition to being nodal Department for Indo-Swedish, Indo-Libyan, Indo-Hungarian and Indo-Belarus Joint Commissions, the Department is represented on joint commissions and joint working groups for promoting industrial, technical and scientific cooperation with select countries serviced by other Ministries/Departments. Similar initiative is also in place with the European Union. This Department is the nodal agency in the Government of India for various instruments of the Asia-Invest Programme of the European Commission. This Department also coordinates with apex Industry Associations such as FICCI, CII, ASSOCHAM in their activities relating to promotion of industrial cooperation and to stimulate foreign direct investment into India besides participating in the Joint Business Councils and other interactive sessions organised by FICCI, CII and ASSOCHAM etc.

Department of Industrial Policy and Promotion is the nodal Department in Government of India for coordinating and implementing programmes with United Nations Industrial Development Organization (UNIDO) in India. UNIDO is a specialised agency of United Nations with a mandate to act as the central coordinating body for industrial activities within the United Nations system. India has been an active Member of the Organization since its inception. Under the country service framework, UNIDO's activities in India are primarily focussed in the fields of strengthening competiveness of the industry through technology upgradation, promoting investment and promoting cleaner and environmentally substainable technologies.

With liberalisation of the industrial licensing regime, only 6 categories of industries require industrial licensing under the Industries (Development and Regulation) Act, 1951. These sectors have been kept under compulsory licensing considering their significance from environment, public safety and strategic considerations. All industries, which do not require an industrial license, are required to only submit an Industrial Entrepreneurs’ Memorandum (IEM).

The Department monitors the industrial sector through information on Industrial Entrepreneurs’ Memorandum (IEM), Letter of Intent (LOI) , Foreign Collaboration (FC) approval and inflows and industrial production returns. The Department also coordinates the progress of ‘infrastructure sectors’ approved for investment/technology transfer, promotion of private investment including foreign investment in the infrastructure sector. The Department also compiles sectoral policies, strategies and guidelines on infrastructure sector.

The Department administers the following Central Legislations through its attached/subordinate offices and statutory organizations:

a. The Explosives Act, 1884, and the Inflammable Substances Act, 1952, is administered through the Office of the Chief Controller of Explosives.

b. The Salt Cess Act, 1953 is administered through the Office of the Salt Commissioner.

c. Central legislations relating to Intellectual Property Rights (IPR’s), namely, the Patents Act, 1970, the Trade and Merchandise Marks Act, 1958 and the Designs Act, 2000 and their associated rules are administered through the Office of the Controller General of Patents, Design and Trademarks (CGPDTM). A new legislation on Geographical Indication of Goods has been enacted and will be brought into force.

d. The Indian Boilers Act, 1923 is administered through the Central Boilers Board, which is a statutory authority. Enforcement of this Act is the responsibility of both the State and Union Governments since the subject "Boiler" is listed in the concurrent List of the Constitution of India.

Balanced regional development through locational dispersal of industries has been one of the principal objectives of the successive Five Year Plans and Government’s Industrial Policy. The Industrial Policy of 1991 aims, inter-alia, to spread industrialization to backward areas of the country through institutions, appropriate initiatives and infrastructure investments that would facilitate private investment. The Department also promotes industrial development of industrially backward areas through its various schemes and incentives and the new Industrial Policy Package for the North Eastern region, Jammu & Kashmir, Himachal Pradesh and Uttaranchal is step in that direction.  The Department of Industrial Policy & Promotion is the nodal agency for development of industries through research and development institutions. It is also taking initiative for enhancing competitiveness of indian industry through its upgradation of Industrial Clusters and Technology Modernisation Scheme, to be implemented in the 10th plan period.