on the smart city development project in navi mumbai, india
TRANSCRIPT
Feasibility Study for the Joint Crediting Mechanism（JCM）
on the Smart City Development Project in Navi Mumbai, India
[Final Report]
March, 2016
The Institute of Energy Economics, Japan （IEEJ）
i
Outline
Introduction. Overview of survey 1
Chapter 1. Policies and trends regarding the development of smart cities in India 2
1. Relationship with polices regarding the development of smart cities in India 2
2. Smart city components implemented by each city 14
Chapter 2. Drawing on existing policy measures on smart city development in India to formulate a
project plan 22
1. Collecting information on similar development schemes in India 22
2. Formulation of the development plan 27
3. Study on Financing for Industrialization 55
4. Studies of measures to reduce risk 67
Chapter 3. A study of emission reduction methodologies applicable when implementing projects and
use of the methodology to estimate potential emission reductions 69
1. A study of technological solutions to be adopted in a JCM project 69
2. Study on JCM-MRV and Estimation of GHG Emission Reduction 69
3. Estimation of GHG emission reduction 86
4. Emission reduction potential at industrial establishments 89
Chapter 4. Analysis of the economic impact of project implementation and the potential impact on
India 91
1.A study of the economic impacts of the successful implementation of a smart city
development plan 91
2. A study of the economic impact of a JCM project 88
3.A study of potential impacts on the entire Indian economy and energy supply-demand 96
Chapter 5. Challenges in implementing the development plan, critical factors and challenges for
success with a view to registering it as a JCM project 103
Chapter 6. Policy proposals related to JCM and Smart City in India (Low carbon technologies,
technical standards regarding products and financial support measures etc.) 110
1. Tax incentives, financial support measures and comparisons of India with other emerging
economies 110
ii
2. A study of technological standards for Navi Mumbai and India 119
Chapter 7. Workshop for the promotion of JCM project with local stakeholders 147
1
Introduction: Overview of survey
○ Purpose of survey
The Ministry of Economy, Trade and Industry and the Maharashtra State government signed a
Memorandum of Cooperation (September 11, 2015) and agreed on the implementation of and
cooperation on a feasibility study for developing a smart city in Navi Mumbai. This report seeks to
conduct a study on the current status of the area, propose new policies for the development of a
smart city in this area with a view to developing a JCM project in the future, and propose project
schemes for the diffusion of low-carbon technologies and products linked with the policy proposals
aforementioned. This will identify the value of JCM and advanced low-carbon technologies and
products and promote the diffusion of low-carbon technologies and products through the
implementation of a smart city development project in Navi Mumbai, as well as help promote
understanding towards the signing of bilateral agreements regarding new schemes and enable Japan
to contribute to India’s achievement of a sustainable environment.
○ Description of survey
The current status of plans to develop a smart city in Navi Mumbai is as follows: a. the
industries to establish business operations in the area are yet to be decided; b. the scale of the
residential area and housing structure are yet to be determined; and c. there is no concrete vision of
commercial areas. Therefore, in light of formulating a development plan for the area, it is required
that the feasibility of setting up a JCM project and developing a smart city is explored and that
necessary components are incorporated into the development plan.
With the aim to identify the potential for setting up a JCM project and developing a smart city
we conducted the following studies, based on a bibliographic survey and interviews, etc.
(1) A study on policies and recent developments regarding smart city development in India
(2) A proposal for policies related to developing JCM projects and smart cities in India
(technological standards and financial support for low-carbon technologies and products)
(3) A study on concrete plans for project implementation
(4) A study on emission reduction methodologies applicable when implementing projects and use of
the methodology to estimate potential emission reductions
(5) An analysis of the economic impact of project implementation and its impact on India
(6) Challenges to be faced in project implementation as well as success factors and unresolved
issues regarding the development of a JCM project
(7) Implementation of measures required to foster and enhance understanding toward JCM and
smart cities among government officials and companies in India
2
Chapter 1: Policies and trends regarding the development of
smart cities in India
1. Relationship with polices regarding the development of smart cities in
India
1.1 Developments leading to the proposal of the Smart City Mission
India has promoted economic activity under the Special Economic Zone Act, enacted in June
2005. Later in December 2006, Japan and India joined hands in constructing a dedicated freight
railway system running through six states, followed by the launching of the Delhi-Mumbai Industrial
Corridor concept which would establish special economic zones around the railway system, thereby
creating an economic region with infrastructure including roads and electric power plants, as well as
industrial zones, logistic hubs, and commercial establishments. In addition to DMIC, the Golden
Quadrilateral was conceptualized to construct a highway connecting Delhi, Kolkata, Chennai and
Mumbai. However, infrastructure development failed to progress as planned and left many special
zones non-functional. Furthermore, in India, drastic annual increases in urban population have raised
demand for basic social infrastructure, such as water and electric power supply and urban
transportation.
Against this backdrop, the Indian government, in its efforts to improve industrial and urban
infrastructure, has launched an initiative to create 100 smart cities across the nation by 2022 (“Smart
Cities Mission”) and the Atal Mission for Rejuvenation & Urban Transformation (AMRUT), an
urban renewal scheme covering 500 cities.
1.2 Policies relevant to smart city development
Major initiatives implemented alongside the Smart Cities Mission and AMRUT include the
Pradhan Mantri Awas Yojana (PMAY) scheme and the Swachh Bharat Mission (SBM) that address
urban population growth, which is forecasted to jump from 377 million people (2011) to 600 million
people (2031). The paragraphs below will briefly introduce each initiative and discuss the
relationship among them.
1.2.1 Smart Cities Mission
In June 2015, the Government of India (Ministry of Urban Development) announced the
Mission Statement and Guidelines for creating 100 smart cities. While there is no universally
accepted definition of “smart city”, examples of smart solutions are given in an illustrative list of
elements that compose a smart city, as provided in Table 1.1.1. On August 27, the same year, 98
cities out of the original list of 100 cities were selected (one city from Jammu & Kashmir and one
3
city from Uttar Pradesh were taken off the list) (Table 1.1.2). Potential cities include 24 state capitals,
24 business and industrial centers, 18 cultural and environmental centers, 5 port areas, and 3
education and healthcare hubs.
The 98 cities will submit Smart City Proposals which will be evaluated for selection. The
selection process involves three rounds and is due to be finalized in August 2016.
Table 1.1.1 Elements of a smart city
Smart solutions Examples
(1) E-governance and citizen
services Electronic service delivery, crime monitoring, etc.
(2) Waste management Waste to energy, fuel, compost; water, construction and
demolition (C&D) waste, etc.
(3) Water management Smart meters & management, leakage identification, water
quality monitoring, etc.
(4) Energy management Smart meters & management, renewable sources of energy,
energy efficient and green buildings, etc.
(5) Urban mobility Smart parking, intelligent traffic management, etc.
(6) Others Tele-medicine, tele-education, incubation, trade facilitation
centers, skill development centers, etc.
Source: Ministry of Urban Development, Mission Statement & Guidelines1（announced in June 2015）
Table 1.1.2 98 potential smart cities (28 states, 7 union territories)
1 http://smartcities.gov.in/writereaddata/SmartCityGuidelines.pdf
No Name of state Name of city No Name of state Name of city
1
Andaman &
Nicobar
Islands
1.Port Blair 19 Madhya
Pradesh
1.Bhopal, 2.Indore,
3.Jabalpur, 4.Gwalior,
5.Sagar, 6.Satna, 7.Ujjain
2 Andhra
Pradesh
1.Vishakhapatnam ,
2.Tirupati ,
3.Kakinada
20 Maharashtra
1.Navi Mumbai, 2.Nashik,
3.Thane
4.Greater Mumbai,
5.Amravati, 6.Solapur
7.Nagpur ,
8.Kalyan-Dombivali,
9.Aurangabad, 10.Pune
3 Arunachal 1.Pasighat 21 Manipur 1.Imphal
4
Pradesh
4 Assam 1.Guwahati 22 Meghalaya 1.Shillong
5 Bihar
1.Muzaffarpur,
2.Bhagalpur,
3.Biharsharif
23 Mizoram 1.Aizawl
6 Chandigarh 1.Chandigarh 24 Nagaland 1.Kohima
7 Chhatisgarh 1.Raipur, 2.Bilaspur 25 Odisha 1.Bhubaneshwar ,
2.Raurkela
8 Daman & Diu 1.Diu 26 Puducherry 1.Oulgaret
9 Dadra &
Nagar Haveli 1.Dilvassa 27 Punjab
1.Ludhiana , 2.Jalandhar ,
3.Amritsar
10 Delh 1.New Delhi
Municipal Council 28 Rajasthan
1.Jaipur , 2.Udaipur ,
3.Kota , 4.Ajmer
11 Goa 1.Panaji 29 Sikkim 1.Namchi
12 Gujarat
1.Gandhinagar,
2.Ahmedabad,
3.Surat, 4.Vadodara,
5.Rajkot, 6.Dahod
30 Tamil Nadu
1.Tiruchirapalli,
2.Tirunelveli, 3.Dindigul,
4.Thanjavur, 5.Tiruppur,
6.Salem, 7.Vellore,
8.Coimbatore, 9.Madurai,
10.Erode, 11.Thoothukudi,
12.Chennai
13 Haryana 1.Karnal,
2.Faridabad 31 Telangana
1.Greater Hyderabad,
2.Greater Warangal
14 Himachal
Pradesh 1.Dharamshala 32 Tripura 1.Agartala
15 Jharkhand 1.Ranchi 33 Uttar Pradesh
1.Moradabad, 2.Aligarh,
3.Saharanpur, 4.Bareilly,
5.Jhansi, 6.Kanpur,
7.Allahabad, 8.Lucknow,
9.Varanasi, 10.Ghaziabad,
11.Agra, 12.Rampur
16 Karnataka
1.Mangaluru,
2.Belagavi,
3.Shivamogga,
4.Hubballi-Dharwad
34 Uttarakhand 1.Dehradun
5
1.2.2 Atal Mission for Rejuvenation & Urban Transformation (AMRUT)
In May 2014, the Atal Mission for Rejuvenation & Urban Transformation (AMRUT), an urban
renewal project for 500 cities, was launched. This project succeeds the Jawaharlal Nehru National
Urban Renewal Mission, a scheme implemented from 2005 through 2012 to encourage urban
infrastructure improvement, with a focus on upgrading public services, including the provision of
improved water supply and sewerage and the development of urban transport. In some aspects, it
embraces the features of smart city development.
In June 2015, the Government of India (Ministry of Urban Development) announced the
Mission Statement and Guidelines for this program, as it did for the Smart Cities Mission. The
components envisaged for AMRUT are provided in Table 1.1.3. At present, 484 cities out of 500
have been taken up under AMRUT (Table 1.4.4). Total project costs are estimated to amount to 500
billion rupees (approximately 825 billion yen2).
Table 1.1.3 AMRUT mission components
Mission components Examples
(1) Water supply (i) Water supply systems, water treatment plants, universal
metering
(ii) Rehabilitation of old water supply systems, including
treatment plants
(iii) Rejuvenation of drinking water and ground water
(iv) Special water supply arrangement for difficult areas (hill and
coastal cities)
(2) Sewerage (i) Networked underground sewerage systems
(ii) Rehabilitation of old sewerage systems and treatment plants
(iii) Reuse of waste water
(3) Septage (i) Cost-effective fecal sludge management
2 1 rupees = 1.65 yen (as of February 29, 2016)
, 5.Tumakuru,
6.Davanegere
17 Kerala 1.Kochi 35 West Bengal
1.New Town Kolkata,
2.Bidhannagar,
3.Durgapur, 4.Haldia
18 Lakshadweep 1.Kavaratti
6
(ii) Mechanical and biological cleaning of sewers and septic
tanks
(4) Storm water drainage (i) Construction and improvements to prevent flooding.
(5) Urban transport (i) Ferry vessels for inland waterways and buses
(ii) Sidewalks, foot over-bridges and facilities for non-motorized
transport (e.g. bicycles)
(iii) Multi-level parking
(iv) Bus Rapid Transit System (BRTS)
(6) Green space and park
(i) Child-friendly spaces and parks
(7) Capacity building (i) Individual and institutional capacity building
(ii) Continuation of the Comprehensive Capacity Building
Programme (CCBP)
Source: Ministry of Urban Development, Mission Statement & Guidelines3（announced in 2015.6）
Table 1.1.4 484 covered by AMRUT
3 http://amrut.gov.in/writereaddata/AMRUT%20Guidelines%20.pdf
No Name of state Name of city
1
Andaman &
Nicobar
Islands
1.Port Blair
2 Andhra
Pradesh
1.GVMC 2.Vijayawada 3.Guntur 4.Nellore 5.Kurnool 6.Kadapa
7.Rajahmundry 8.Kakinada 9.Tirupati
10.Anantapur 11.Vizianagaram 12.Ongole 13.Eluru 14.Nandyal
15.Machilipatnam 16.Adoni 17.Tenali
18.Proddatur 19.Chittoor 20.Hindupur 21.Bhimavaram 22.Madanapalle
23.Guntakal 24.Srikakulam
25.Dharmavaram 26.Gudivada 27.Narasaraopet 28.Tadpatri
29.Tadepalligudem 30.Chilakaluripet
31.Amravati
3 Arunachal
Pradesh 1.Itanagar
4 Assam 1.Guwahati 2.Silchar 3.Dibrugarh 4.Nagaon
5 Bihar 1.Patna 2.Gaya 3.Bhagalpur 4.Muzaffarpur 5.Biharsharif 6.Darbhanga
7
7.Purnia 8.Arrah 9.Begusarai
10.Katihar 11.Munger 12.Chapra 13.Dinapur Nizamat 14.Saharsa
15.Hajipur 16.Sasaram 17.Dehri
18.Siwan 19.Bettiah 20.Motihari 21.Bagaha 22.Kishanganj 23.Jamalpur
24.Jehanabad 25.Buxar
26.Aurangabad
6 Chandigarh 1.Chandigarh
7 Chhatisgarh 1.Raipur 2.Bhilai Nagar 3.Korba 4.Bilaspur 5.Durg 6.Rajnandgaon
7.Raigarh 8.Jagdalpur 9.Ambikapur
8 Daman & Diu 1.Daman
9 Dadra &
Nagar Haveli 1.Silvassa
10 Delhi 1.North DMC 2.East DMC 3.South DMC 4.New Delhi Municipal Council
(NDMC)
11 Goa 1.Panaji
12 Gujarat
1.Ahmadabad 2.Surat 3.Vadodara 4.Rajkot 5.Bhavnagar 6.Jamnagar
7.Junagadh 8.Gandhidham
9.Nadiad 10.Gandhinagar 11.Anand 12.Morvi 13.Mahesana
14.Surendranagar Dudhrej 15.Bharuch
16.Vapi 17.Navsari 18.Veraval 19.Porbandar 20.Godhra 21.Bhuj 22.Botad
23.Patan 24.Palanpur
25.Jetpur Navagadh 26.Valsad 27.Kalol 28Gondal 29.Deesa 30.Amreli
31.Dwarka 32.Guja
13 Haryana
1.Faridabad 2.Gurgaon 3.Rohtak 4.Hisar 5.Panipat 6.Karnal 7.Sonipat
8.Yamunanagar 9.Panchkula
10.Bhiwani 11.Ambala 12.Sirsa 13.Bahadurgarh 14.Jind 15.Thanesar
16.Kaithal 17.Rewari 18Palwal
19.Jagadhri 20.Ambala Sadar
14 Himachal
Pradesh 1. Shimla
15 Jammu &
Kashmir 1.Srinagar 2.Jammu 3.Anantnag
16 Jharkhand 1.Dhanbad 2.Ranchi 3.Deoghar 4.Adityapur 5.Hazaribag 6.Chas 7.Giridih
8.Jharkhand
17 Karnataka 1.BBMP 2. Hubballi-Dharwad 3.Mysore 4.Gulbarga 5.Mangaluru 6.
8
Belagavi(Belgaum) 7.Davanagere
8.Bellary 9.Bijapur 10. Shivamogga 11.Tumakuru 12.Raichur 13.Bidar
14.Hospet 15.Gadag-Betigeri
16.Bhadravati 17.Robertson Pet 18.Chitradurga 19.Kolar 20.Mandya
21.Hassan 22.Udupi 23.Chikmagalur 24.Bagalkot 25.Ranibennur
26.Gangawati 27.Badami
18 Kerala 1.Thiruvananthapuram 2.Kochi 3.Kozhikode 4.Kollam 5.Thrissur
6.Alappuzha 7.Palakkad
19 Lakshadweep 1.Kavaratti
20 Madhya
Pradesh
1.Indore 2.Bhopal 3.Jabalpur 4.Gwalior 5.Ujjain 6.Dewas 7.Satna 8.Sagar
9.Ratlam 10.Rewa 11.Murwara 12.Singrauli 13.Burhanpur 14.Khandwa
15.Morena 16.Bhind 17.Guna 18.Shivpuri
19.Vidisha 20.Mandsaur 21.Chhindwara 22.Chhatarpur 23.Neemuch
24.Pithampur 25.Damoh
26.Hoshangabad 27.Sehore 28.Khargone 29.Betul 30.Seoni 31.Datia
32.Nagda
21 Maharashtra
1.Greater Mumbai 2.Barshi 3.Pune 4.Yavatmal 5.Nagpur 6.Achalpur
7.Thane 8.Osmanabad
9.Pimpri Chinchwad 10.Nandurbar 11.Nashik 12.Wardha 13.Kalyan
Dombivali 14.Udgir
15.Vasai-Virar City 16.Hinganghat 17.Aurangabad 18.Navi Mumbai
19.Solapur 20.Mira Bhayandar
21.Bhiwandi 22.Amravati 23.Nanded Waghala 24.Kolhapur 25.Ulhasnagar
26.Sangli-Miraj Kupwad
27.Malegaon 28.Jalgaon 29.Akola 30.Latur 31.Dhule 32.Ahmadnagar
33.Chandrapur 34.Parbhani
35.Ichalkaranji 36.Jalna 37.Ambarnath 38.Bhusawal 39.Panvel 40.Badlapur
41.Bid 42.Gondiya 43.Satara
22 Manipur 1.Imphal
23 Meghalaya 1.Shillong
24 Mizoram 1.Aizawl
25 Nagaland 1.Dimapur 2.Kohima
26 Odisha
1.Bhubaneswar Town 2.Cuttack 3.Brahmapur 4.Raurkela Town 5.Puri
6.Sambalpur Town
7.Baleshwar Town 8.Baripada Town 9.Bhadrak
9
27 Puducherry 1.Ozhukarai 2.Puducherry
28 Punjab
1.Ludhiana 2.Amritsar 3.Jalandhar 4.Patiala 5.Bathinda 6.Hoshiarpur
7.Batala 8.Moga 9.Pathankot
10.S.A.S. Nagar 11.Abohar 12.Malerkotla 13.Khanna 14.Muktsar
15.Barnala 16.Firozpur
29 Rajasthan
1.Jaipur 2.Jodhpur 3.Kota 4.Bikaner 5.Ajmer 6.Udaipur 7.Bhilwara 8.Alwar
9.Bharatpur 10.Sikar
11.Pali 12.Ganganagar 13.Tonk 14.Kishangarh 15.Hanumangarh 16.Beawar
17.Dhaulpur
18.Sawai Madhopur 19.Churu 20.Gangapur City 21.Jhunjhunun 22.Baran
23.Chittaurgarh
24.Hindaun 25.Bhiwadi 26.Bundi 27.Nagaur 28.Sujangarh
30 Sikkim 1. Gangtok
31 Tamil Nadu
1.Chennai 2.Coimbatore 3.Madurai 4.Tiruchirappalli 5.Salem 6.Tirunelveli
7.Ambattur 8.Tiruppur
9.Avadi 10.Tiruvottiyur 11.Thoothukkudi 12.Nagercoil 13.Thanjavur
14.Pallavaram 15.Dindigul
16.Vellore 17.Tambaram 18.Cuddalore 19.Alandur 20.Kancheepuram
21.Erode 22.Tiruvannamalai
23.Kumbakonam 24.Rajapalayam 25.Kurichi 26.Madavaram
27.Pudukkottai 28.Hosur 29.Ambur
30.Karaikkudi 31.Nagapattinam 32.Velankanni
32 Telangana
1.Khammam 2.GHMC 3.Warangal 4.Nizamabad 5.Karimnagar
6.Ramagundam 7.Mahbubnagar
8.Nalgonda 9.Adilabad 10.Suryapet 11.Miryalaguda
33 Tripura 1.Agartala
34 Uttar Pradesh
1.Lucknow 2.Budaun 3.Kanpur 4.Banda 5.Ghaziabad 6.Lakhimpur 7.Agra
8.Hathras 9.Meerut 10.Lalitpur 11.Varanasi 12.Modinagar 13.Allahabad
14.Deoria 15.Bareilly 16.Pilibhit 17.Moradabad
18.Hardoi 19.Aligarh 20.Mainpuri 21.Saharanpur 22.Etah 23.Gorakhpur
24.Basti 25.Firozabad
26.Chandausi 27.Loni 28.Gonda 29.Jhansi 30.Akbarpur 31.Muzaffarnagar
32.Khurja 33.Mathura
34.Azamgarh 35.Shahjahanpur 36.Ghazipur 37.Rampur 38.Mughalsarai
39.Maunath Bhanjan
10
*Shaded cities are potential smart cities under the Smart Cities Mission.(Eighty-nine cities are covered under both
programs.)
* Underlined cities have been selected as the first 20 smart cities in the first round. (Nineteen cities are covered under
both programs.
1.2.3 Pradhan Mantri Awas Yojana (PMAY)
In 2015, the Ministry of Housing and Urban Poverty Alleviation announced the Scheme
Guidelines for PMAY, which has been renamed from its original name, “Housing for all (Urban)”4.
4 http://mhupa.gov.in/writereaddata/01_PMAY_Guidelines_English.pdf
40.Sultanpur 41.Farrukhabad-cum-Fatehgarh 42.Shikohabad 43.Hapur
44.Shamli 45.Etawah
46.Ballia 47.Mirzapur-cum-Vindhyachal 48.Baraut 49.Bulandshahar
50.Kasganj 51Sambhal 52.Amroha
53.Fatehpur 54.Rae Bareli 55.Orai 56.Bahraich 57.Jaunpur 58.Unnao
59.Sitapur 60.Faizabad
35 Uttarakhand 1.Dehradun 2.Hardwar 3.Haldwani-cum-Kathgodam 4.Rudrapur
5.Kashipur 6.Roorkee
36 West Bengal
1.Kolkata 2.Balurghat 3.Haora 4.Habra 5.Durgapur 6.Jamuria 7.Asansol
8.Bankura 9.Siliguri
10.North Barrackpur 11.Maheshtala 12.Raniganj 13.Rajpur
Sonarpur14.Nabadwip 15.South Dum Dum
16.Basirhat 17.Rajarhat Gopalpur 18.Halisahar 19.Bhatpara 20.Rishra
21.Panihati
22.Ashoknagar Kalyangarh 23.Kamarhati 24.Baidyabati 25.Barddhaman
26.Puruliya 27.Kulti
28.Kanchrapara 29.Bally 30.Darjiling 31.Barasat 32.Titagarh 33.North
Dum Dum 34.Dum Dum
35.Baranagar 36.Champdani 37.Uluberia 38.Bongaon 39.Naihati
40.Khardaha 41.Bidhan Nagar
42.Jalpaiguri 43.Kharagpur44.Bansberia 45.English Bazar 46.Bhadreswar
47.Haldia 48.Kalyani
49.Madhyamgram 50.Baharampur 51.Raiganj 52.Serampore
53.Hugli-Chinsurah 54.Medinipur
55.Chandannagar 56.Uttarpara Kotrung 57.Krishnanagar 58.Barrackpur
59.Santipur
11
The initiative aims to provide housing for all citizens by constructing 20 million housing units with
basic civic infrastructure for the poor and slum dwellers in cities from 2015 through 2022. The cities
covered under the scheme include all cities and towns in India (4,014 locations) (determined by the
2011 census). The components of PMAY include basic civic infrastructure, water treatment,
sanitation, electric power supply, etc. Beneficiaries are eligible for an interest subsidy at a rate of
6.5% on housing loans. Financial support of 100,000 to 230,000 rupees (approximately 190,000 to
430,000 yen) per house is also available to subsidize the construction of housing.
1.2.4 Swachh Bharat Mission (SBM)
The SBM aims to improve sanitation in cities. The Guidelines for Swachh Bharat Mission were
announced in December 2014. The Mission will be implemented through February 2019 with a
focus on eliminating open defecation, improving waste management, encouraging
community-managed solid waste management and generating awareness about sanitation. All 4,041
cities and towns in India are covered by the Mission. The following components are provided in the
Guidelines (Table 1.1.5).
Table 1.1.5 SBM Components
No. Components
1 Construction of individual household latrines (including conversion to pour flush
toilets), community sanitary complexes, public toilets
2 Solid waste management
3 Generating public awareness about sanitation
4 Capacity-building, administrative management
Source: Ministry of Urban Development, Guidelines for Swachh Bharat Mission5 (announced in December 2014)
Another related policy measure is the Heritage City Development & Augmentation Yojana
(HRIDAY) which seeks to promote urban development through the preservation of heritage cities
and tourism in twelve cities. However, HRIDAY and Navi Mumbai have little in common.
5 www.swachhbharaturban.gov.in/
12
Table 1.1.6 Summary of developments in smart city-related policy measures
Name of policy measure Fiscal
year of
enactment
Description
GQ: Golden Quadrilateral 1998
・Scheme for a road system connecting 4
major cities (Delhi, Kolkata, Chennai,
Mumbai)
NHDP: National Highway Development Project 1999
・Develop the GQ, north-south road, and
east-west road
・Widen existing roads to double track,
quadruple track and sextuple track roads
SEZ: Special Economic Zone act 2005.6 ・Activate economy and develop infrastructure
through the establishment of special zones
DMIC: Delhi-Mumbai Industrial Corridor 2006.12
・Develop an economic region by constructing
the Dedicated Freight Corridor (DFC) across
6 states (Haryana , Uttar Pradesh, Rajasthan,
Madhya Pradesh, Gujarat, Maharashtra) and
establishing special economic zones (SEZs) in
surrounding areas.
・SEZs to embrace infrastructure including,
industrial logistic hubs, commercial
establishments, roads and electric power
plants.
CBIC: Chennai-Bengaluru Industrial Corridor 2011
・Develop a road connecting Chennai in Tamil
Nadu state and Bengaluru in Karnataka state
and a surrounding economic region.
・Tami Nadu has set out a policy directive,
Vision Tamil Nadu 2023 (March 2012), under
which it enforces the Tamil Nadu Investment
Promotion Program (TNIPP) to promote
road construction and electric power and
water supply .
Smart Cities Mission 2014.5
・Establish 100 smart cities by 2022.
・An effort to lay the groundwork for the Modi
administration’s “Make in India” initiative
13
(encouraging investments to make India a
global manufacturing hub).
・The Mission Statement & Guidelines was
formulated by the Ministry of Urban
Development in June 2015※１.
・In August 2015, 98 potential smart cities※２
were shortlisted. A list of 20 potential smart
cities selected in the first round to be
announced at the end of fiscal 2015.
AMRUT: Atal Mission for Rejuvenation & Urban Transformation 2014.5
・Urban development scheme to provide water
resources, waste water treatment and parks
and green spaces, ameliorate urban traffic
congestion, and reduce pollution.
・Succeeds the urban infrastructure
improvement initiative, Jawaharlal Nehru
National Urban Renewal Mission,
implemented from 2005 through 2012 to
encourage urban infrastructure improvement.
Pradhan Mantri Awas Yojana 2014.6
・Renewed name from the Housing for All
(Urban) initiative, aiming to provide all
households with water supply, toilet systems
and 24-hour electric power supply by 2022.
SBM：Swachh Bharat Mission 2014.6
・Effort aiming to improve public health and
sanitation and waste management.
・To be implemented through February 2019.
1.3 Relationship among policy measures relevant to smart city development
This subsection will compare the four projects (Smart City Mission, AMRUT, PMAY, SBM)
described above.
Although the coverage area of each measure is varied, comparisons reveal some overlap
(Table 1.1.7). Furthermore, the Smart City Mission Statement and Guidelines provide for
collaboration with other related policy measures.
14
Table 1.1.7 Comparison of major components of policy measures
Components
Policy measures
(The number of cities covered is provided in bottom row)
Smart City
Mission AMRUT PMAY SBM
100 cities 500 cities
All cities and
towns (4041
locations)
All cities and
towns (4041
locations)
Water management ○ ○ ○
Waste management ○ ○ ○
Transport ○ ○
Energy management ○
Tele-medicine, tele-education ○
E-governance ○
Environment-friendly parks, etc. ○
Construction of toilet systems
(households / public) ○ ○
Sanitation improvements,
awareness-raising ○ ○
An observation of the coverage of each policy measure shows that 89 cities are covered by
both the Smart Cities Mission and AMRUT (c.f. Tables 1.1.2 and 1.1.4). Furthermore, both PMAY
and SBM apply to all 4,104 Indian cities and towns, and therefore the coverage areas overlap
completely. The implementation of these initiatives will enable focused infrastructure development
in specific cities. Therefore, although they are diversified, the initiatives will serve as a means of
fund procurement to improve infrastructure and upgrade local infrastructure and living standards.
As abovementioned, other policy measures addressing related fields tend to be simultaneously
implemented in areas where smart city initiatives are currently implemented. Therefore, in order to
understand the status of efforts to develop smart cities in India, we must take note of the financial
support available under other policy measures.
2. Smart city components implemented by each city
2.1 Results of the first round of selecting twenty potential smart cities
In the first round of selecting potential smart cities (Round 1), 97 out of 98 cities submitted
15
proposals for smart cities before the end-of-November 2015 deadline (extended to December 15).
After a round of selection, twenty Round 1 Smart Cities were announced on January 28, 2016 (Table
1.2.1).
The selection process involved scoring proposals, followed by evaluation by a panel
comprising international institutions, such as the World Bank and the Asian Development Bank,
universities and research institutions (Table 1.2.2). The list of twenty Round 1 Smart Cities includes
large cities like Chennai, as well as small cities with relevantly poor infrastructure.
Table 1.2.1 Results of Round 1 of selecting 20 potential smart cities (announced on January 28,
2016)
No Name of
state
Name of city No Name of state Name of city
1
Andaman &
Nicobar
Islands
1.Port Blair 19 Madhya
Pradesh
1.Bhopal, 2.Indore,
3.Jabalpur, 4.Gwalior,
5.Saga, 6.Satna, 7.Ujjain
2 Andhra
Pradesh
1.Visakhapatnam,
2.Tirupati,
3.Kakinada
20 Maharashtra
1.Navi Mumbai, 2.Nashik,
3.Thane
4.Greater Mumbai ,
5.Amravati , 6.Solapur,
7.Nagpur,
8.Kalyan-Dombivali,
9.Aurangabad, 10.Pune
3 Arunachal
Pradesh 1.Pasighat 21 Manipur 1.Imphal
4 Assam 1.Guwahati 22 Meghalaya 1.Shillong
5 Bihar
1.Muzaffarpur,
2.Bhagalpur,
3.Biharsharif
23 Mizoram 1.Aizawl
6 Chandigarh 1.Chandigarh 24 Nagaland 1.Kohima
7 Chhatisgarh 1.Raipur , 2.Bilaspur 25 Odisha 1.Bhubaneswar,
2.Raurkela
8 Daman &
Diu 1.Diu 26 Puducherry 1.Oulgaret
9 Dadra & 1.Silvassa 27 Punjab 1.Ludhiana, 2.Jalandhar,
16
Nagar
Haveli
3.Amritsar
10 Delh 1.New Delhi
Municipal Council 28 Rajasthan
1.Jaipur, 2.Udaipur,
3.Kota, 4.Ajmer
11 Goa 1.Panaji 29 Sikkim 1.Namchi
12 Gujarat
1.Gandhinagar,
2.Ahmedabad,
3.Surat, 4.Vadodara,
5.Rajkot, 6.Dahod
30 Tamil Nadu
1.Tiruchirapalli,
2.Tirunelveli, 3.Dindigul,
4.Thanjavur, 5.Tiruppur,
6.Salem, 7.Vellore,
8.Coimbatore, 9.Madurai,
10.Erode, 11.Thoothukudi,
12.Chennai
13 Haryana 1.Karnal, 2.Faridabad 31 Telangana 1.Greater Hyderabad,
2.Greater Warangal
14 Himachal
Pradesh 1.Dharamshala 32 Tripura 1.Agartala
15 Jharkhand 1.Ranchi 33 Uttar Pradesh
1.Moradabad, 2.Aligarh,
3.Saharanpur, 4.Bareilly,
5.Jhansi, 6.Kanpur ,
7.Allahabad, 8.Lucknow,
9.Varanasi, 10.Ghaziabad
11.Agra , 12.Rampur
16 Karnataka
1.Mangaluru ,
2.Belagavi
(Belgaum),
3.Shivamogga,
4.Hubballi-Dharwad,
5.Tumakuru,
6.Davanagere
34 Uttarakhand 1.Dehradun
17 Kerala 1.Kochi 35 West Bengal
1.New Town Kolkata,
2.Bidhannagar, 3.Durgapur,
4.Haldia
18 Lakshadweep 1.Kavaratti
17
Table 1.2.2 Top 20 smart cities
Rank
-ing
Name of city Name of state / union territory Score (%)
1 Bhubaneswar Odisha 78.83
2 Pune Maharashtra 77.42
3 Jaipur Rajasthan 73.83
4 Surat Gujarat 68.16
5 Kochi Kerala 66.98
6 Ahmedabad Gujarat 66.85
7 Jabalpur Madhya Pradesh 63.03
8 Visakhapatnam Andhra Pradesh 61.12
9 Solapur Maharashtra 60.83
10 Davanagere Karnataka 59.93
11 Indore Madhya Pradesh 59.89
12 New Delhi Municipal Council Delh 59.63
13 Coimbatore Tamil Nadu 58.74
14 Kakinada Andhra Pradesh 58.19
15 Belagavi (Belgaum) Karnataka 57.99
16 Udaipur Rajasthan 57.91
17 Guwahati Assam 57.66
18 Chennai Tamil Nadu 56.16
19 Ludhiana Punjab 55.84
20 Bhopal Madhya Pradesh 55.47
21 Ujjain Madhya Pradesh 55.03
22 Gwalior Madhya Pradesh 54.82
23 Warangal Telangana 54.79
24 Chandigarh Chandigarh 54.73
25 Amritsar Punjab 54.55
26 Shivamogga Karnataka 54.36
27 Jalandhar Punjab 53.82
28 Madurai Tamil Nadu 53.34
29 Lucknow Uttar Pradesh 53.24
30 Newtown Kolkata West Bengal 53.10
31 Nagpur Maharashtra 53.00
18
32 Panaji Goa 52.99
33 Salem Tamil Nadu 52.95
34 Nashik Maharashtra 52.75
35 Agra Uttar Pradesh 52.69
36 Thane Maharashtra 52.34
37 Rajkot Gujarat 52.33
38 Kalyan-Dombivali Maharashtra 52.30
39 Pasighat Arunachal Pradesh 52.26
40 Vellore Tamil Nadu 52.04
41 Kanpur Uttar Pradesh 52.00
42 Tirupati Andhra Pradesh 51.78
43 Greater Mumbai Maharashtra 51.77
44 Hubballi-Dharwad Karnataka 51.71
45 Navi Mumbai Maharashtra 51.68
Source: Ministry of Urban Development, Smart Cities Mission website6
2.2 Components of a smart city
In 2015, the Government of India announced some of the smart solutions proposed by 97
cities (as understood based on interviews). As provided below, the solutions announced are more or
less in line with the smart solutions from the Mission Statement and Guidelines listed in Table 1.1.1.
○E-governance harnessing ICT (27 cities)
○Smart water management using smart meters (21 cities)
○Improved solid waste management (20 cities)
○Smart public transport (16 cities)
○LED street lights (16 cities)
○Installation of CCTV cameras for public security (14 cities)
○Control center for traffic and water supply monitoring (9 cities)
○Smart applications for the general public (6 cities)
○WiFi (5 cities)
○GIS (geographic information system) mapping (4 cities)
6 http://smartcities.gov.in/writereaddata/Ranking_of_Smart%20Cities.pdf
omitted
19
Details of the twenty winning city proposals in Round 1 of the City Challenge7 are compared
with the Navi Mumbai proposal (as understood based on interviews) in Table 1.2.3.
Table 1.2.3 Smart solutions to be implemented by potential smart cities
Smart solutions
Smart Cities Mission Guidelines
20 winner cities Navi Mumbai
Cities Rate of
adoption (%)
Status of
adoption
E-governance and
citizen services
Electronic services 10 50 Yes
CCTV (security, traffic
control, etc.) 11 55
Air quality monitoring 8 40 Yes
Waste
management
Waste heat and energy use 1 5
Solid waste management 20 100
Water
management
Water supply and sewerage 20 100 Yes
Water quality and leakage
management 水 9 45 Yes
Energy
management
Measurement and
management using smart
meters
20 100 Yes
Renewable energy 20 100 Yes
Energy conservation (LED
street lights, etc.) 20 100
Urban mobility Smart parking 20 100 Yes
Smart traffic 20 100 Yes
Multi- and intermodal
transport 3 15
Others ICT 20 100 Yes
WiFi 10 50
GIS (geographic
information system)
(mapping, travels, etc.)
11 55
Smart medicine, smart
education 5 25 Yes
7 http://smartcities.gov.in/winningCityp1.htm
20
Venture incubation 1 5 Yes
Skill development centers 3 15 Yes
Almost all twenty cities have included smart solutions to improve mobility, water supply and
sewerage, waste (solid waste) management, renewable energy (provided solar power accounts for
more than 10 percent), etc. In particular, many cities have proposed to adopt Supervisory Control
and Data Acquisition (SCADA) systems in water treatment. In terms of urban mobility, Coimbatore
will construct a 30-kilometer eco-mobility corridor and many other proposed efforts involve
reducing dependency on automobiles by constructing sidewalks and bicycle lanes. Furthermore,
while many cities will install CCTV cameras for enhanced security, Jaipur and Udaipur have
included the use of CCTV cameras for monitoring to preserve the beauty of Taj Mahal and
surrounding tourist destinations. Jabalpur, Coimbatore, and Kakinada have also proposed
locally-oriented solutions, including measures against flooding and storm surges. The New Delhi
Municipal Council has included relatively advanced solutions such as EV, but on the other hand
seeks to establish basic civic infrastructure.
Under the vision “to be a city that innovates and excites, while fostering the Quality of Life of
its citizens, sustainably and responsibly”, Navi Mumbai also set out solutions similar to the top
twenty potential smart cities. However, it ranked 45th in the competition. As the reason, although
SKIL Infrastructure Ltd. analyzes that it is because of its current status as a large city with existing
infrastructure, some people point out that was attributed that Navi Mumbai Municipal Corporation
(NMMC), the proposer of Navi Mumbai smart city, opposed to setting out SPV which are monitored
by central and state government and the proposal did not have distinctive features very much
relatively.
In addition to India’s national policy to promote the introduction of renewable energy – mainly
solar energy –, Ministry of Power, Government of India, is already engaged in verifying smart
grid-related technologies and are expected to incorporate even more advanced technological
components of a smart city. For example, it, collaborated with New Energy and Industrial
Technology Development Organization, has implemented to verify distribution monitoring and
control technologies with smart meter in Haryana.
2.3 Selection schedule for the remaining 80 cities
The twenty potential smart cities declared in Round 1 will be followed by a selection of 23
more cities, each representing the 23 states that cities were not chosen from in the first round. This
will occur before starting Round 2 in April 2016, when renewed proposals will be accepted.
A maximum of forty cities will selected out of the remaining 57 cities in Round 2. Navi
Mumbai falls under the remaining 57 cities, and thus it will resubmit its proposal in Round 2 (Table
21
1.2.4).
The total project costs for smart city development is estimated to be 480 billion rupees over
five years. Each city will receive one billion rupees annually.
From Maharashtra state, ten candidate cities submitted proposals and two cities were selected
in Round 1. The proposals of the ten cities collectively amounted to 320 billion rupees in costs, of
which Navi Mumbai, with the largest budget, accounted for 85 billion rupees.
In addition to the Smart Cities Mission launched by the central government, the City and
Industrial Development Corporation of Maharashtra (CIDCO8) announced a state-level initiative, the
Smart City Action Plan, in December 2015 for the promotion of smart city development in Navi
Mumbai. With estimated costs of 350 billion rupees through 2019, it has no financial support from
the central government and relies on funds procured by CIDCO and the participation of private firms.
Although Navi Mumbai is guided by a smart city development program run by the state government,
if it should fail to be selected among the 100 smart cities of the Smart City Mission, which is led by
the central government and acknowledged internationally, it could suffer the consequences of limited
funding and participation of overseas companies.
Table 1.2.4 Upcoming events in the selection process
* Navi Mumbai will resubmit its proposal in round 2.
8 CIDCO : City and Industrial Development Corporation of Maharashtra
2016年
Selection process Target January April June August
Jan. 28
Selection
Apr. 15
Apr. 1 Jun.30
Selection
(1) Round 1 20 cities selected from a total of 97 cities
(2) Fast trackPriority selection of 23 citiesrepresenting each of the 23 states fromwhich cities were not chosen in (1)
(3) Round 3Maximum of 40 cities selected from thecities remaining after (1) and (2)
Application
Application
22
Chapter 2 Drawing on existing policy measures on smart city
development in India to formulate a project plan.
1. Collecting information on similar development schemes in India
1.1 Selection of industrial areas to study
The current Navi Mumbai development plan is still in the planning phase and therefore requires
reference to typical Indian industrial areas before a project plan can be formulated in detail.
Moreover, as this study intends to consider the possibility of developing a Joint Crediting
Mechanism (JCM) project based on smart city development, it will observe trends in other industrial
areas where Japanese firms have business operations. Observations will be conducted based on the
existing literature as well as interviews performed during local visits.
At present, India embraces industrial areas of all sizes, which continue with development
continuing today. In April 2015, the Japanese Minister of Economy, Trade and Industry and the
Indian Minister of Commerce and Industry signed a joint statement, which included the
identification of eleven industrial townships that Japan would invest in.9 Inquiries made to Japanese
government affiliates and companies located in India about the current status of Japanese presence in
the eleven candidate industrial townships revealed that the Neemrana industrial area in Rajasthan
state was the most successful industrial township in India. The number of Japanese companies with
business operations in industrial townships to be supported by Japanese investment is provided in
Table 2.1.1.
Table 2.1.1 Industrial townships identified for facilitating investment from Japan and number of
Japanese companies with business operations (as of November 2015)
9 http://www.meti.go.jp/press/2015/09/20150911004/20150911004.html
State Area No. of Japanese
companies State Area
No. of Japanese companies
Andhra Pradesh
Areas between the south border and Krishnapatnam Port
0 Rajasthan Ghilot 0
Gujarat Mandal 3 Tamil Nadu Ponneri 0
Haryana Jhajjar 2 Tamil Nadu One Hub Chennai 3
Karnataka Tumkur 0 Tamil Nadu Sojitsu-Motherson 0
Maharashtra Supa 0 Uttar Pradesh Integrated Industrial Township, Greater Noida
0
23
The Neemrana Industrial Area is located approximately 120 kilometers from New Delhi, close to
the northeastern border of Rajasthan state and shared with Haryana state. This industrial area has not
been designated a special economic zone (SEZ) but is located in the area surrounding the
abovementioned Delhi-Mumbai Industrial Corridor (DMIC), where the Indian Government will be
most focused. Hence, we decided to visit Neemrana, a successful example to which we would be
able to refer to as we drew our development plans for Navi Mumbai.
Figure 2.1.1 Location of Neemrana
1.2 Survey results of similar industrial areas
The Neemrana industrial area has been developed by the Rajasthan State Industrial Development
and Investment Corporation (RIICO). One It embraces three three development zones, one of which
is dedicated to Japanese firms. Plots have been allotted since 2007 and Japanese firms, mainly
electronic machinery and automobile parts manufacturers, have set up industrial units in 80 percent
of the zone. The Japanese industrial zone stretches over an area of approximately 467 ha, consuming
around 100MW.
Rajasthan Neemrana 46
24
Figure 2.1.2 Map of Neemrana industrial area
Figure 2.1.3 Landscape of Neemrana
i. Power supply in Neemrana
Power supply in Neemrana has changed drastically from the initial stage of development to today.
The industrial area and its surroundings currently have two grid systems: 11kV and 33kV. During the
early years all electric power was supplied through a 11kV system. However, since the 11kV system
supplies power to a wide range of users including households, it was prone to unpredictable power
outages several times a week, and sometimes days without electricity once an outage occurred. We
25
learned that the industrial zone has therefore followed the steps provided below for an improved
power supply.
Steps Measures Notes
First period
（2007-）
・Connected off-grid DEGs and set up a captive power
generation plant (CPP)*1
to enable the mutual
interchange of electric power among local users.
・*1: c.f. Figure 2.1.4
Second period
（2012-）
・Connected DEGs with a photovoltaic power
generation system (1MW out of 6MW)
・30MW gas turbine power plants introduced by
electric power companies
・Increased supply
・Reduced carbon levels
Today
・ Two-thirds of users have undergone pressure
upgrades from 11kV to 33kV.
・Reduced power outage
frequency
・Reduced fuel costs for
off-grid DEGs
This has drastically reduced power outage frequency to a few hours once a month. Users have
retained their off-grid DEGs as a backup power system in preparation of sudden power outages.
Figure 2.1.4 Conceptual illustration of power supply based on CPP and PV power generation
Not only the capacity but also the quality of electric power facilities is an important factor in
ensuring a stable electric power supply. Therefore, we surveyed how the power grid facilities were
installed in the industrial area to find that the overhead power lines used bare wire with insufficient
clearance between trees and power lines and that the underground cable was also directly buried with
26
no protective cover. We observed much room for improvement, learning that even the most
successful industrial area in India continues to be challenged with blackout risk. However, this may
also be an issue of different perceptions regarding cost and the quality of electric power supply; and
therefore, negotiations for improvement may be varied depending on the owner of the power lines in
the industrial area.
Figure 2.1.5 Overhead grid power lines
Figure 2.1.6 Underground cables
ii. Points to consider when developing an industrial area
In industrial areas expecting overseas Japanese firms to set up industrial units, the living
conditions of Japanese employees must be considered, in addition to the issue of stabilizing the
energy supply. According to a company that we visited, single Japanese workers live close to the
industrial zone, while workers with families commute from Gurgaon City, Haryana state, where
residents can enjoy access to a good educational environment and living conditions (c.f. Figure
27
2.1.1). However, even single people need to drive into Gurgaon City to shop for food at least once a
month. Furthermore, with the National Highway 8 (NH8) connecting Gurgaon City and Neemrana
industrial area challenged with chronic congestion, residents have suffered burdens in both
commuting and daily living. A residential area (housing, commercial establishments, hospitals, etc.)
is currently under construction near the industrial area (c.f. Figures 2.1.2, 2.1.7).
Figure 2.1.5 Residential area under construction near the industrial area
The Supa industrial area (total area of 930ha, of which the Japanese industrial zone covers
approximately 200ha; plot allotment initiated in September 2015) in Maharashtra state, which was
identified among the eleven industrial townships for facilitating investment from Japan, also has a
hospital, a Japanese school, and restaurants, in addition to an industrial zone.
It can be said that providing a good living environment for workers, in addition to developing the
industrial zone itself, will facilitate the business expansion of Japanese companies into an industrial
area.
2. Formulation of the development plan
2.1 Current Navi Mumbai Special Economic Zone (NMSEZ) development plan
NMSEZ comprises four Special Economic Zones (SEZs) of various sizes, namely, Ulwe
(Waterfront), Ulwe (Airport), Kalamboli, and Dronagiri, collectively covering approximately
2,000ha. To travel from the center of ever-growing Mumbai to NMSEZ, one would have to travel
two hours to two and a half hours by car through the northern part of Mumbai Bay. However, plans
to construct a 22 kilometer road bridge stretching over the Mumbai Bay financed by yen loans are
underway. The completion of the bridge will drastically reduce travel time from Mumbai to NMSEZ
28
to approximately 30 minutes. Furthermore, the construction of a new airport has been started in the
northern part of Navi Mumbai. According to interviews, both the road bridge and airport are due to
be completed in fiscal 2019 (and begin operations in the beginning of 2020), but the actual
completion is subject to change (Figure 2.2.1).
Figure 2.2.1 NMSEZ development area
NMSEZ is currently subject to the following conditions of development:
・ In addition to the industrial zone, it shall have commercial and residential zones and parks
shall be set up.
・ Eighty-five percent of the total development area shall be earmarked for industrial purposes.
(The remaining 15% shall be earmarked for commercial and residential purposes as well as
parks.)
・ Seventy-five percent of products manufactured in the industrial zone shall be exported. (The
remaining 25% can be sold domestically.)
The current development plan drawn up by SKIL Infrastructure Ltd (“SKIL”)10
, the developer of
NMSEZ, conforms with the abovementioned conditions, as provided in Table 2.2.1. The four nodes
are estimated to collectively use a total of 700MW.
According to this development plan, Dronagiri is the only node that is to earmark area for
non-industrial purposes and develop a residential area. The other nodes will have only an industrial
10 The general engineering company which deals with shipbuilding, distribution other
than the EPC (design, procurement, construction) business such as a plant, a harbor,
the railroad, defense business. The 1990 establishment, Mumbai base.
29
area under the current plan. Also, while a wide diversity of industries is proposed for Dronagiri, a
limited number of industries are envisaged for the other three nodes with relatively vast land
coverage and estimated electric power demand. At present, SKIL prioritizes the development of each
node in the order provided below:
・Highest priority:②Ulwe (Airport), ④Dronoagiri
・Third priority: ③Kalamboli
・Fourth priority:①Ulwe (Waterfront)
Furthermore, SKIL, the developer of the area, has yet to ask each node to formulate project plans
and is still at the stage of requesting the submission of their concept of development and the final
vision of the envisaged smart city. SKIL seeks to set up low-carbon and state-of-the-art smart cities.
Table 2.2.1 Current development plan of NMSEZ
Intended Use ① Ulwe (Waterfront) ② Ulwe (Airport) ③ Kalamboli ④ Dronagiri
Proposed industries and
composition
［100%］
Jewelry
［67%］
International finance
centerー
［32%］
IT-related outsourcing
services
（ITES・BPO・KPO）
［100%］
Textiles, apparel,
leather products
［32%］
Logistics warehouse,
shipping
［18%］
Automobile parts, light
industries, electronic
machinery
［14%］
Electronic equipment,
small electronic parts,
household appliances,
household supplies
［14%］
Chemicals, bio,
pharmaceuticals
［14%］
Processed food,
beverages
［8%］
Textiles, apparel,
leather products In
du
strial
area
1. Industrial area 52 ha 208 ha 228 ha 425 ha
2. Logistics warehouse, shipping
center － － － 200 ha
Oth
ers
3. Residential area － － － 145 ha
4. Utility space 2.2 ha 9 ha 7.3 ha 23 ha
5. Parks, open space 11 ha 44 ha 49 ha 130 ha
6. Social infrastructure 3.8 ha 14 ha 16.7 ha 56 ha
7. Roads 11 ha 45 ha 49 ha 171 ha
8. Other,
reservoir (existing) － － － 100 ha
Total 80 ha 320 ha 350 ha 1,250 ha
(Notes) Max. electric power 35MW 126MW 147MW 392MW
Notes: ・ITES : Information Technology enabled Services.
・BPO : Business Process Outsourcing.
30
・KPO : Knowledge Process Outsourcing.
2.2 NMSEZ development proposals
Based on the results of surveys performed on the Neemrana industrial area and NMSEZ, we will
make detailed proposals for the development concept and future vision, with due consideration of
the environment surrounding the development area. In addition, By this proposal, the image carried
out the radical review of the concept in spite of being a relief pitcher now in the future when SKIL
thought.
2.2.1 Formulating the development concept
Before formulating the Navi Mumbai development concept, we first reviewed the future vision of
Navi Mumbai that should be pursued. Ensuring a stable electric power supply is the most critical
issue for Japanese companies to expand and continue business operations in India. Although
blackout frequency has been reduced in recent years, risk of frequent unplanned power outage will
affect corporate business plans, and thus makes it difficult for Japanese companies to make the
decision to expand to India. Therefore, it is essential for each development area to have a robust
electric power supply that will enable uninterrupted business operations.
However, just ensuring stable power supply is not enough to encourage businesses to expand their
operations to India. The next challenge is providing the most inexpensive electric power possible.
The conventional system of having each user individually manage their power supply would involve
great cost burdens including maintenance expenditures, and thus would not lead to facilitating
business expansion. In order to eliminate cost burden, the development area is in need of an
intra-regional energy management system that covers the entire energy supply.
Furthermore, equipment and facilities with relatively low energy efficiency levels are widely used
in India due to their inexpensiveness. For example, exhaust gas-induced air pollution has become a
serious issue in recent years with the substantial increase of automobiles. If such energy use
practices are continued in the the development area addressed, then it will be a long road to
achieving a low-carbon state-of-the-art smart city. It is therefore important that development areas
assume the role and function of communicating to the local community the need to change their
environmental awareness by introducing various measures that will lead to decarbonization in the
development area and thus presenting the ideal image of a smart city.
With this in mind, we propose three development goals for smart cities in Navi Mumbai:
1) A power outage-resistant Resilient City supporting business continuity
2) A Smart Energy City wisely harnessing local energy
3) A low-carbon Environment-friendly Smart City representing India
We also considered the actions that should be taken for the achievement of these goals. The first
31
requirement in stabilizing electric power supply is improving the power infrastructure. Even in
Neemrana, we found vulnerable points in the infrastructure that would lead to blackout risk when
compared with Japanese standards. Blackout risk should be eliminated to the largest extent possible
when developing infrastructure in Navi Mumbai.
Then, in order to achieve substantially lower carbon levels in the electric power infrastructure
with reduced risk of power outage, energy-saving facilities must be installed in throughout the
development area. However, by depending entirely on the introduction of energy-efficiency facilities
energy savings can only be determined by the performance of each facility, leaving no room for
further energy savings through operational efforts. Therefore, it would also be necessary to
incorporate energy sources that are not reliant on grid power. These include energy-creation facilities
such as PV power generation systems and energy storage solutions such as fuel cells, which are
equally important as energy-saving technologies.
These actions would be enough to create a smart city, but not enough to set an example for the rest
of India that state-of-the-art smart city services are offered, with only the electric power supply
system to present. Therefore, we propose harnessing the information and communication lines
installed with the electric power infrastructure to provide various IOT*1
services to the development
area. This would not only visualize smart city technologies for people on the outside but also allow
companies and residents inside the area to enjoy the benefits of a smart city. Hence the provision of
IOT services would be another necessary action to take.
Based on the above, we propose three actions for the establishment of an ideal smart city in Navi
Mumbai:
1) Full development of an intra-zonal grid
2) Intensive introduction of energy-saving, energy creation and energy storage technologies
3) Development of IOT solutions
A conceptual illustration of the development concept is provided in Figure 2.2.1. The succeeding
subsections will introduce our proposals in relation to the three actions in more detail.
1 Acronym for the “Internet of Things”. A concept that various things connected via networks enables autonomously
and optimally control without human operation or input.
32
Figure 2.2.1 Smart city concept proposed for Navi Mumbai
(1) Proposal for an intra-zonal grid
The following three points are proposed for an intra-zonal grid:
The electric power system for factories should use special high-voltage transmission lines
(22kV).
In order to minimize the duration and area coverage of power outages, factories should be tied
to two lines and other users should have an automated distribution system.
During power grid outages, electric power is supplied employing only renewable energy and
storage batteries.
The electric power system in areas surrounding Navi Mumbai are either 11kV or 22kV. Therefore,
given the need to avoid power outage risk at factories, it would be preferable to install a dedicated
circuit using 22kV lines. Furthermore, if higher power quality is to be pursued, the following
technological elements are also recommended:
・Two-way flow of electric power
・Ensuring sufficient ground clearance
・Replacing power lines with cables
・Installing underground cable protection
When supplying electric power from a standard 11kV system to non-factory users, an automated
distribution system could be another a technological element to consider introducing.
Electric power would normally be supplied using solar power in the development area, but when
total demand cannot be met, power is supplied from the grid. As renewable energy fluctuates
depending on weather conditions, storage batteries will be installed in the area. However, in the
event the area is completely cut off the grid due to power outage, the power supply system will be
switched to a micro-grid harnessing only solar power and storage batteries. Since this will reduce the
33
total electric power supply, less power will be available to users, but with notification. Meticulous
service can be ensured by providing tools that will dispatch demand response (DR) and offer
appropriate information, including notification of estimated power consumption and scheduled
power outages.
Figure 2.2.2 Conceptual illustration of electric power supply system harnessing renewable energy
and storage batteries
(2) Proposals for the introduction of energy saving, energy creation and energy storage technologies
The following two proposals are made for the introduction of energy saving, energy creation and
energy storage technologies
Establish a “low-carbon foundation” through the intensive introduction of energy-saving,
energy creation, and energy storage technologies
Further promote decarbonization and ensure a stable electric power supply by conducting
Integrated management and control of all energy-saving, energy creation and energy storage
equipment by harnessing ICT*2
/M2M*3
.
Achieving low carbon levels would be based on introducing energy-saving, energy creation and
energy storage facilities, and progress would depend on the scale of introduction. Also, in order to
encourage further decarbonization, it is important not only to install such facilities, but also to
harness ICT and link various information for integrated intra-regional energy management and
control.
2 acronym for Information and Communication Technology
3 acronym for Machine to Machine, which is the concept of machines mutually exchanging information through a
telecommunication network and autonomously performing sophisticated control and operations
Integrated management will not only promote decarbonization, but also enable the efficient and
34
streamlined intra-regional control of energy, and thus contribute to stabilizing electric power supply.
Details are provided in Figure 2.2.3.
Figure 2.2.3 Technological components to be introduced in Navi Mumbai
As presented in the figure, technological components will be installed in three steps, namely,
introduction, monitoring and operation. This will enable further decarbonization and stabilization of
the electric power supply compared to implementing only measures to install facilities. Furthermore,
by expanding integrated management beyond the electric power system to heat energy, water supply
and sewerage, and transportation, larger citywide effects can be expected.
However, it is difficult to introduce energy-saving, energy creation and energy storage
technologies on a large scale simultaneously. Therefore, with a view to the scale of companies
expanding business operations into the area, a project plan should be formulated, starting with the
introduction, monitoring and operation of small facilities, the PDCA (Plan－Do－Check－Action)
cycle should be pursued, gradually upscaling the development area.
35
(3) Proposal for IOT development
The following three proposals are made for IOT development:
Utilize the intra-regional ICT network and establish an “information platform” that connects
diverse information.
Harness ICT to improve the quality, quantity and speed of operations.
In the future, utilize the accumulated Big Data*4
to provide various new services.
The implementation of an energy management system will involve setting up a web of
information communication networks throughout the development area. Furthermore, by harnessing
ICT and M2M, various equipment within the development area can be connected and a diversity of
data, including the status of use, can be compiled. The compiled data can be used to achieve higher
efficiency levels in the area. An “information platform” will be set up in the area for the integrated
management of local data.
Furthermore, considering the potential growth of the Indian economy and increase in exports to
the Middle East and Africa, it is important that business operations are switched to ICT-oriented
operations from the outset. By harnessing ICT and improving the quality, quantity and speed of
operation, thereby establishing a system that takes full advantage of business opportunities, then the
development area will become attractive for reasons not limited to stable electric supply.
Moreover, more can be done than just using the local data compiled only for energy management
and operations in order to create a sufficiently attractive smart city. Therefore, analysis of the Big
Data acquired locally and the information communication network can be utilized in fields other than
supplying electric power to provide various services to people living and working in the
development area. This will help develop the development area into one of the most advanced smart
cities in India.
The provision of new services may include not only selling data to service providers but also
collaborating with marketing companies that analyze Big Data and providing solutions as local
services. Figure 2.2.4 exhibits examples of potential IOT services in the development area.
As the figure implies, by linking various data, the diversity of potential services will be unlimited.
Therefore, it is important that SKIL provide the IOT services that it seeks to provide. Also, as stated
in our proposals for the introduction of energy-saving, energy creation and energy storage
technologies, it is advised that SKIL start with smart logistics, for example, and gradually expand its
local services to smart transport and smart mail order. A project plan should be formulated for the
development of IOT services as well.
4 Digital data of large capacities that has been produced with the spread of the Internet and improvements in computer
36
processing speed.
Figure 2.2.4 Examples of potential local IOT services
2.2.2 Specific proposals with consideration of the surroundings of the development
area
(1) Concept for developing a smart city in Navi Mumbai
Based on the basic concept of establishing a smart city envisaged above, we propose the following
for developing smart cities in Navi Mumbai (c.f. Figure 2.2.5).
Have users install environment-friendly“LED lights” and “energy-saving equipment” on a
citywide level..
Vehicles travelling into the area should be“next-generation vehicles (EVs)”that can also be
used for power storage.
Install“photovoltaic power generation systems” in a wide area, in the forms of mega-solar,
rooftops and street lights.
Connect all off-grid power plants individually owned by users to a local “storage battery”.
Establish data center-oriented “ICT infrastructure” for the development of energy
management and IOT.
The three major components of a smart city are provided below:
The first component is an energy management system that connects local users, renewable energy
(mostly solar power) and storage batteries. To be more specific, in the case of factories and
commercial establishments, in order to reduce the cost burden shouldered by each user, a
cloud-based energy management system that uses software managed at the data center would be
37
provided instead of a energy management system directly fitted to each facility – for example,
BEMS*5
for buildings and FEMS*6
for factories. HEMS*7
would be introduced in households to
control the hours the household appliances and equipment should be used as well as temperature
settings in accordance with the local supply-demand status.
The data center would not only be the provider of the local energy management system but would
also serve the role of the databank in which local data is compiled. Also, the energy management
system would pursue the efficient use of energy by using not only electric power but also heat energy.
In more specific terms, the system would harness not only waste heat generated in factories but also
the heat produced by incinerating industrial waste and household waste generated in the smart city.
This would not be done solely for the purpose of producing heat energy but also with the intention of
communicating that the development area is an environment-friendly smart city that treats local
waste locally. This would present the environmental advantages of smart city and set out a model for
the rest of India.
Figure 2.2.5 Conceptual illustration of a smart city in Navi Mumbai
5 acronym for Building Energy Management System. A system that aims to reduce energy consumption by
controlling the operation of equipment and facilities (EMS) that has been tailored to building.
6 acronym for Factory Energy Management System. EMS for factories.
7 acronym for Home Energy Management System. EMS for households.
38
The second component involves efforts in the transportation sector. As proposed in relation to the
introduction of energy-saving, energy creation and energy storage technologies, EVs that do not emit
CO2 will be promoted in the transportation sector. EVs will be adopted not only for personal use but
for various vehicles, including buses, trucks, taxis, rental cars, and motorcycles. A shortcoming of
EV technology today is that EVs can only travel short distances compared to gasoline-powered
vehicles. However, EVs should be introduced in Navi Mumbai because they are suitable for
transporting people and goods short distances, and the area is situated close to the airport, the port
and the railway system.
Furthermore, EVs would be equipped with wireless terminals, such as car navigation, which can
be used for the integrated management of the status of utilization and for receiving instructions. This
technology would be useful for logistics management - for managing bus routes and dispatching
taxis. Recently, in India, the timely provision of traffic congestion information is giving drivers
access to appropriate driving instructions.
Moreover, EVs are equipped with fuel cells, which can also be considered energy sources. As
aforementioned, in case of a grid power outage, the area would rely solely on renewable energy –
mainly solar power – and storage batteries, and therefore, the power supply would be reduced. The
development area would utilize EVs to complement the emergency energy supply. EVs are an
essential component of Navi Mumbai’s smart city concept as they would bear an important role as a
backup system for the local power supply.
The third component is developing IOT services. As aforementioned, various services can be
locally provided by harnessing the data compiled at the data enter and the local information
communication network. Services may be provided outside of the development area as well as
within the area.
It is important that a grand design is formulated on how these components will be included in the
outset of development. The following subsections will discuss which components should be
incorporated in the development area.
(2) A study of target industries to attract to the development area
The success of the development area lies not only in the which domestic industries it embraces but
also in how it can attract overseas investment, including that from Japan. The status of Japanese
companies expanding business operations overseas is provided in Figure 2.6.6.
39
Figure 2.2.6 Status of Japanese companies with overseas business operations
Currently, approximately 40 percent of companies expanding business overseas represent the
manufacturing industry and the remaining 60 percent are non-manufacturing companies.
Manufacturing industries seeking business expansion overseas include the “ transportation
machinery”, “electronic and communications machinery” and “chemical” industries, in order of
share. Other industries expanding to overseas locations include the “production machinery”, “metal
products”, “food”, and “textiles” industries. While "wholesale" companies represent the majority of
non-manufacturing industries, “transportation” and “information and telecommunications”
companies are also increasing overseas operations.
Furthermore, in recent years, a large number of Japanese companies have been expanding to Asian
regions, while few companies are moving out to India, the Middle East and Africa. However, given
its domestic economic growth and its importance as a hub for exports to the Middle East and Africa,
India is potentially an attractive destination for Japanese companies seeking to expand abroad.
Figure 2.2.7 Distribution of Japanese companies with overseas business operations
40
In order to establish a manufacturing hub in India, it is important that development schemes are
drawn up with careful consideration of target industries, including the destinations to which products
will be supplied, as well as the economic situation of such destinations. Target industries have been
identified in Table 2.2.2, with regard to potential demand in India, the Middle East and Africa.
Table 2.2.2 Target industries in light of future demand in India, the Middle East and Africa
Important aspects of future
demand
Target industries in the development area
1) Construction rush ・Iron and steel industry
・Sashes and interior construction material
・Construction machinery
・General machinery including pumps, elevators, etc.
2) Improved living
standards
・Electronic equipment (air conditioners, TVs, refrigerators)
・Textiles (apparel)
・Household supplies (pulp & paper, detergents, etc.), houseware
・Furniture, household equipment
3) Changing lifestyles ・Electronic equipment
(telecommunication equipment, mobile-related equipment)
・Transportation machinery
(motorbikes, automobiles, bicycles)
・Processed food
・Jewelry
・Beauty products
4) Healthcare and health
improvements
・Pharmaceutical products
・Health foods
・Medical equipment
Based on the target industries studied above, smart city proposals are made for each node of Navi
Mumbai in following subsection.
(3) Node-specific proposals for developing a smart city
(a) Proposal for Ulwe (Waterfront) node
Ulwe (Waterfront) is, as shown in Figure 2.2.1, is situated in the northeastern part of Navi
Mumbai, facing the Mumbai Bay. The surrounding environment and current status of the node are
provided in Figures 2.2.8 and 2.2.9.
The features of Ulwe (Waterfront) are provided below:
Located close to coast. (Ensured access to a sewage system.; has a command of Mumbai
Bay.)
Residential cluster to be built nearby; passenger railway network to be constructed.
41
(Optimal location for commuting and attracting customers.)
Easy access to highway, airport and port. (Ensured access to the highway, airport and port.)
Road bridge (MTHL) to connect Navi Mumbai with Mumbai; freight railway network also
to be constructed.
Ulwe (Waterfront) is the most advanced of the fours nodes of NMSEZ and should therefore be the
easiest to develop.
Figure.2.2.8 Area surrounding Ulwe (Waterfront)
Figure.2.2.9 Current view of Ulwe (Waterfront)
Based on the above, the following two proposals are made for Ulwe (Waterfront) node.
・ Lay an emphasis on commerce-oriented industries and facilities
・ Design the node as a smart city showroom
Details of our proposals are elaborated below:
42
1) Emphasis on commerce-oriented industries and facilities
Industrial
establishments
Electronic appliances (air conditioners, TVs, refrigerators); processed food,
textiles (apparel); jewelry studios
Commercial
establishments Large-scale commercial complexes
Others
Sports complex (ballpark, gymnasium, heated pool, running and cycling
course)
Knowledge capital (culture and education, library, administrative offices)
Given its good command of Mumbai Bay and its optimal location for attracting customers, Ulwe
(Waterfront) should have a large-scale commercial complex. While the majority of products
manufactured in the area would be exported overseas, an industrial area limited to industrial
establishments that can provide goods to the commercial complex would be constructed adjacent to
the commercial area. Industries represented in the industrial area would include household
appliances yet with low diffusion levels in India – especially air conditioners, TVs and refrigerators
– and food and clothing-related industries, including processed food and textiles (apparel), as well as
jewelry manufacturing, a local craft.
Furthermore, since the area not only has industrial and commercial establishments but is located
adjacent to a dense residential area, it would be able to attract more customers, who will enjoy the
benefits offered by a smart city, such as a sports complex and knowledge capital*8
. For example, ICT
can be harnessed to achieve “smart information-oriented societies” where residents are offered
ICT-based management of exercise and meal records in smart healthcare, ICT-based management of
learning progress and achievement levels in smart education, or electronic administrative services in
smart administration.
2) A smart city showroom
Feature 1 Introduction of various renewable energy and energy-saving facilities (PV power generation + small-scale wind power, waste power generation, waste heat utilization)
Feature 2 Knowledge capital includes “the Smart City Promotion Center and tour”
where visitors can learn about smart technologies.
Feature 3 Wide use of next-generation vehicles (EVs).
8 A knowledge-building hub for the creation new values through culture, education and exchange.
43
The efforts proposed by the first twenty cities selected under the Smart Cities Mission include
many components that will serve the purpose of improving infrastructure and living standards. If
NMSEZ can successfully present itself as a model smart city offering state-of-the-art solutions, then
it will be able to attract businesses to the area.
First, Ulwe (Waterfront) will incorporate various renewable energy and energy-saving facilities in
addition to PV power and seek to become a working showroom. Showcasing renewable energy
would, in particular, involve setting up small wind power stations, as it is located close to the coast,
and biomass or biogas power generation facilities at commercial establishments utilizing the waste
generated on-site. Also, waste heat from the industrial area would be supplied as heat energy to the
adjacent commercial establishment and heated pool. In this manner, the technological components
required in a smart city would be installed into the area as a package of solutions.
Second, knowledge capital would be employed to introduce smart solutions. The knowledge
capital would exhibit smart technologies and products, introduce local efforts and offer tours to see
actual equipment, thus facilitating understanding of smart technologies and products and their
diffusion. In addition, on this understanding and spread promotion activity, we can use it as the
teaching materials of the energy environmental education in things utilizing widely such as not only
the thing for the government, a group, the company but also citizen or school education from the
childhood period.
Third, as a model smart city, the area would employ only next-generation vehicles (EVs).
In this manner, Ulwe (Waterfront) would be developed as a city showcasing smart city
components.
A conceptual illustration of the node is provided as Figure 2.2.10.
Figure 2.2.10 Conceptural illustration of Ulwe (Waterfront) smart city
44
(b) Proposal for Ulwe (Airport) node
Ulwe (Airport) node is, as shown in Figure 2.2.1, located adjacent to the new airport to be
constructed in the northern part of Navi Mumbai. The surrounding environment and current status of
the node are provided in Figures 2.2.11and 2.2.12.
The features of Ulwe (Airport) are provided below:
・ Located adjacent to the airport. (Ensured access to air shipping routes.)
・ Close to extensive road and railway systems. (Ensured access to overland shipping routes.)
・ Easy access to the freight port by means of road or rail transport. (Ensured access to sea
shipping routes.)
・ A road bridge, the Mumbai Trans Harbour Link (MTHL), will connect Navi Mumbai with
Mumbai. (Activated movement of people and goods.)
At the timing of our visit, gutter construction had begun at the new airport site, but the area to be
developed as a smart city was untouched. The node embraces a large area of wetland, and thus initial
construction work would include land improvement.
Figure 2.2.11 Area surrounding Ulwe (Airport)
45
Figure .2.2.12 Current view of Ulwe (Airport)
Based on the above, the following two proposals are made for Ulwe (Airport) node:
Emphasis should be laid on airport-oriented industries and services.
The node should be developed as an environment-friendly city with the wide use of
next-generation vehicles.
Details of our proposals are elaborated below:
1) Emphasis on airport-oriented industries and services
Small /
lightweight
industries
Textiles (apparel), leather products (bags, shoes), household supplies,
houseware, stationery, printing industry (books, magazines)
Logistics /
product sales
Distribution warehouse for air cargo, logistics hub for Internet sales
This node also embraces Mumbai’s leading large-scale wholesale hub for
household supplies.
Travel industry Hotel, shopping center, observation park
Because the node is adjacent to the airport, it should be focused on industries and services that can
take advantage of the proximity.
First, industries should be selected based on whether they manufacture small and lightweight
products that can be shipped by air. More specifically, apparel, houseware and household goods
46
would be the leading products. Given promises of an increasing number of students pursuing higher
education and a higher literacy rate accompanying economic growth, stationery, books, magazines
and newspapers may also be effective choices. These industries would not have to limit shipping to
domestic and overseas markets but also provide their products to airport shops and local commercial
establishments.
Second, a logistics hub should be established for air cargo. Although Mumbai already has an
international airport, if the industrial areas in NMSEZ can be enhanced, the new airport would have
an increasing number of incoming and outgoing cargo, which would be advantageous in terms of
airport management as well. Furthermore, once the flow of goods has been established, a logistic
hub for Internet sales and a major wholesale center can also be built in addition to shipping services,
thus expanding business opportunities outwards from the node and leading to the ceaseless
development of the adjacent industrial area.
Third, with a focus on the accelerated flow of people resulting from the construction of a new
airport, schemes should be devised to invite airport users into the node. The travel industry would be
a good target industry, and hotels would be built for travelers. Furthermore, by creatively utilizing
the shopping center and airport facilities, such as observation parks, as recreational facilities,
locally-oriented land development would be possible.
The technological smart city components to be introduced to Ulwe (Airport) node are, as
aforementioned, renewable energy – mainly solar power – and storage batteries, and energy
management systems tailored to the needs of each user.
2) Environment-friendly city with the wide use of next-generation vehicles
Large vehicles EV trucks for cargo transportation
EV buses connecting major location, including the airport and train stations
Small and medium-sized
vehicles
EV taxis
EV rental cars (to be used for car-sharing in the future)
Given the emphasis on airport-oriented industries and services, next-generation vehicles (EVs)
would be adopted for all transport machinery carrying both people and goods to destinations within
the node. This would not only serve the purpose of lowering carbon emissions from the
transportation sector, but also increasing the acknowledgement that the node is an
environmentally-friendly city, and thus contribute to the establishment of a leading smart city in
India.
A conceptual illustration of the Ulwe (airport) node is provided below:
47
Figure 2.2.13 Conceptual illustration of Ulwe (Airport) smart city
(c) Proposals for Kalamboli
Kalamboli node is, as shown in Figure 2.2.1, located in the northeastern part of Navi Mumbai,
along the highway connecting Sion and Panvel. The surrounding environment and current status of
the node are provided in Figures 2.2.14 and 2.2.15.
The features of Kalamboli node are provided below:
Adjacent to another industrial complex (MIDC TALOJA *1). (Ensured access to air shipping
routes)
Several residential areas (Kharghar, Belapur, Panvel, etc.) are located close by. (Ensured
access to a labor market)
Road and railway networks to be enhanced. (Ensured access to road shipping routes;
improved commuting environment)
Easy access to airport, port and road bridge (MTHL: Mumbai Trans Harbour Link)
connecting Navi Mumbai and Mumbai. (Activated flow of people and goods.)
(Note) MIDC TALOJA
・An industrial area developed by the Maharashtra Industrial Development Corporation
・Currently embraces industries such as iron and steel (including for drinking purposes), plastics, paints, printers,
pharmaceutical R&D center, textiles, etc.
48
Figure 2.2.14 Area surrounding Kalamboli
Figure 2.2.15 Current view of Kalamboli
Based on the above, the following two proposals are made for Kalamboli node:
・ Lay an emphasis on highly specialized industries which differentiate the area from the
adjacent industrial complex.
・ Design a city focused on highly specialized fields (with public services for local residents).
Details of our proposals are elaborated below:
1) Emphasis on highly specialized industries which differentiate the area from the adjacent
industrial complex
Precision
machinery
PC and mobile-related devices, ICT equipment, optical equipment, precision
machinery manufacturing, medical equipment
49
Chemical
industry Pharmaceuticals manufacturing
The most important weak point of Kalamboli node is that it is located next to another industrial
area. When there are two industrial areas in the same region, they tend to compete against each other
to attract more businesses and consequently have low occupancy rates. Therefore, it is important that
the node is developed in a manner that differentiates it from its established neighbor to the extent
possible. The industries that have set up industrial units in TALOJA are still diversified; and
therefore, the leading industries of Kalamboli node should be determined and relevant companies
should be encouraged to expand into the node before feature industries are decided in TAJOLA. Or it
is one idea to differentiate between both industrial areas cause of the constant condition. The
industries proposed have been selected based on the list of target industries compiled for this report
and from the viewpoint that Kalamboli is the most suitable location of the four nodes of NMSEZ for
a data center.
First, Kalamboli node should specialize in precision machinery manufacturing. This includes
computer and mobile-related devices, ICT equipment, and optical equipment. Medical equipment
manufacturers, which call for more expertise are also incorporated into the node.
Second, in relation with medical industries, pharmaceuticals manufacturing should be included for
a level of specialization unequaled.
The technological smart city components to be introduced to the Ulwe (Airport) node are, as
aforementioned, renewable energy – mainly solar power – and storage batteries, and energy
management systems tailored to the needs of each user.
2) A city focused on highly specialized fields (with public services for local residents).
IT IT software design and development
Data center (cloud-based EMS, databanks)
Healthcare General hospital, highly advanced healthcare, pharmaceutical development
Others
Large-scale commercial establishment
EV buses connecting major locations (stations, airport, commuting)
Wide use of next-generation vehicles (EV trucks)
50
As highly specialized industries have been selected, relevant facilities should be constructed.
More specifically, as precision machinery factories operate adjacent to the node, IT-related industries
should be chosen and a data center should be built in the node. Furthermore, given the clustering of
medical equipment and pharmaceutical manufacturing factories, general hospitals should be built
and highly advanced healthcare should be provided, thus formulating an integrated healthcare area
that offers a range of services starting with pharmaceutical development to public services for local
residents.
As many residential areas are scattered around the node and transportation infrastructure has
already been installed, a loop bus service would be offered in addition to a large-scale commercial
establishment, as a means of commuting for people working in the node or as a means of transport to
major locations. As in other areas, next-generation vehicles (EVs) would be adopted for use within
the node, as a part of the node’s smart city strategy.
A conceptual illustration of Kalamboli node is provided in Figure 2.2.16.
Figure 2.2.16 Conceptual illustration of Kalamboli smart city
(d) A proposal for Dronagiri
The Dronagiri node is situated alongside the Mumbai Bay, in the southeastern part of Navi
Mumbai. The surrounding environment and current status of the node are provided in Figures 2.2.17
and 2.2.18.
The features of Dronagiri are provided below:
Vast area covering over 1,000ha. (Largest in tNMSEZ).
Coastal area surrounded by the ocean, rivers and reservoirs. (Ensured access to an industrial
sewage system.)
51
Adjacent to a freight port. (Ensured access to sea shipping routes; good location for an export
hub.)
Road and railway networks to be enhanced. (Ensured access to road shipping routes.)
Located close to the airport and the road bridge Mumbai Trans Harbour Link (MTHL)
connecting Navi Mumbai and Mumbai. (Ensured access to air shipping routes, activated
movement of people and goods)
We found Dronagiri to the most suitable of the four nodes of NMSEZ as an industrial area, but it
was yet to be developed at the time of our visit. Therefore, construction work should begin with
clearing the land.
Figure .2.2.17 Area surrounding Dronagiri
Figure 2.2.18 Current view of Dronagiri
52
Based on the above the following two proposals are made for Dronagiri node:
・Lay an emphasis on bulky and heavy manufacturing industries dependent on sea transport.
・Design an environment-friendly town utilizing industrial waste.
Details of our proposals are elaborated below:
1) Emphasis on bulky and heavy manufacturing industries dependent on sea transport
Heavy chemical
industries
Iron and steel, metal products (sash and construction material), chemical
industries (pharmaceuticals, plastic products)
Transportation
machinery
Motorcycles, four-wheel vehicles (assembly, parts, rubber products),
construction machinery, agricultural machinery
Electric
machinery
Manufacturing hub for renewable energy-related equipment (solar panels,
wind power, PCS, storage batteries, etc.), general machinery (pumps,
elevators)
Logistics Logistics warehouse hub
Other Pulp and paper, textiles, furniture manufacturing
Dronagiri node has cheaper access to the surface shipping of goods compared to inland nodes and
is capable of providing goods promptly.
With this in mind, we selected industries that manufacture relatively large and bulky products.
Sashes used in constructing buildings and infrastructure, metal products including construction
material, automobiles and construction machinery and renewable energy-related equipment could be
leading industries. Also in relation to these industries, general equipment, such as pumps and
elevators that would be used in housing complexes and commercial establishments, and chemical
products used in painting may be included. Furthermore, because India has a robust agricultural
policy, we envisage that demand for automated agricultural machinery will increase in the future,
and thus these industries are also included. The vast area will allow the incorporation of other
various industries.
The technological smart city components to be introduced to Dronagiri node are basically, as in
other nodes, renewable energy – mainly solar power – and storage batteries, and energy management
systems tailored to the needs of each user.
53
2) Environment-friendly town utilizing industrial waste
Feature 1 Local treatment of industrial waste (containment within the node)
Feature 2 Interchange of waste heat generated in manufacturing processes and industrial
waste incineration
Feature 3 Wide use of next-generation vehicles (EVs)
The inclusion of various industries including manufacturers of large and bulky products would
increase the amount of industrial waste generated in the manufacturing industry, in comparison with
other nodes. Incinerating local industrial waste outside of the node would tarnish the public image of
the node as a smart city. Furthermore, located away from the center of Navi Mumbai and covering a
vast area, Dronagiri would be the optimal place to set up a scheme for the local treatment of local
industrial waste. Unlike other nodes, a waste incinerator would be constructed, thus uplifting
Dronagiri’s reputation as an environment-friendly city.
The waste incinerator would not be used only to burn industrial waste but also to supply waste
heat to be used as energy in the node. The efficient use of energy will lead to decarbonization.
Furthermore, if the large amounts of waste heat that are generated at manufacturers of large and
bulky products could be reused locally, then higher effects can be expected.
As in other nodes, next-generation vehicles (EVs) would be adopted for local use, as a part of the
smart city scheme.
A conceptual illustration of Dronagiri is node is provided in Figure 2.2.19.
54
Figure 2.2.19 Conceptual illustration of Dronagiri smart city
The proposals made herein are in line with the development goal of creating a state-of-the-art
smart city in India, but at the same time they exhibit a finalized picture that has been designed to the
highest standard. Therefore, we believe that the following steps should be taken in order to
implement a feasible project plan.
(STEP1) Discuss which level the developer seeks to achieve
(STEP2) Discuss further details of what the developer seeks to achieve
(utilizing companies from various sectors as required)
(STEP3) Based on the contents determined, formulate a phased development plan for each node
(STEP4) Conduct a feasibility study for each development phase
The developer’s priorities of development have been provided in 2(1). However, as a result of
visiting the sites, we believe that the the following sequence might be more preferable at present.
That is, beginning with Ulwe (Waterfront), where the construction work should not be too difficult,
in order to gain experience of building a smart city. Then, Ulwe (Airport) should be developed in an
attempt to be in time for the opening of the airport. Drawing upon these experiences, Dronagiri, the
NMSEZ node that is most suitable for a industrial area, followed by Kalamboli should be developed.
Until Kalamboli is completed, the data center would be tentatively set up elsewhere and moved to
Kalamboli upon its completion.
Finally, each node will be in the spotlight, attracting even more attention from both overseas and
India, when the road bridge connecting NMSEZ to Mumbai is completed and the Navi Mumbai
economic region extends over a vast area. Therefore, in order to effectively use the vast development
area, balance between“economic growth”and“environmental-friendliness”should be sought from
55
the outset. The key to the successful development of a smart city lies in introducing“energy-saving”,
“energy creation”and“energy storage” technologies as core technologies and“harnessing ICT”. The
proposed smart city will support “building a town where the industrial area, commercial area and
residential area co-exist” and pursuing a “rich local life and economic activities,” both
unprecedented in Navi Mumbai.
3.Study on Financing for Industrialization
3.1 Sources of Funding for Smart Cities in India
In 2015, the Government of India announced 98 cities as the targets for the smart city
development project. It is reported that the government has sanctioned a budget of 480 billion rupees
for the 100 target smart cities for a period of five years upon reviewing the development plan of each
city, where each city would get 1 billion rupees every year for five years. Navi Mumbai in
Maharashtra State is covered under the Delhi Mumbai Industrial Corridor (DMIC) project agreed on
between the Government of Japan and the Government of India in 2006. In it, the development of
infrastructure such as industrial parks, freight centers, roads, ports, commercial and residential
facilities will be promoted. JICA has signed a loan contract with the Government of India providing
a maximum of 183.079 billion Japanese yen for the major projects which include Multi-modal High
Axle Load Dedicated Freight Corridor (DFC), Chennai Metro Project, and West Bengal Water
Supply Development Project. In line with the DFC project, various other projects have been started
jointly by Japan and India and they include a logistics infrastructure project that combines FTWZ
(Free Trade & Warehouse Zone) and rail transport in Maharashtra by Sojitz from the Japan side and
a convention center project in Navi Mumbai in addition to the development of industrial parks
(Shendra-Bidkin district, Super-Nevasa-Dabura Puri District) and logistics from the Indian side.
If sales revenue can be expected by utilizing private sector capital in fund-raising for initial
investment of such urban development, then many cases utilizing a public–private partnership (PPP)
scheme will be seen. For example, development and operation of expressways and ports can
generate sales revenue but there are long-term risks. The sales revenue from water or power supply
is low and hence there tends to be a dependency on ODA etc. In the case of DMIC, the Project
Development Fund is a part of DMIC Development Corporation Limited, and for each individual
infrastructure development case, the State Governments have adopted a scheme to set up a Special
Purpose Vehicle (SPV), create a package of a feasibility study, approvals & licenses and land, and
sell SPV to private enterprises through bidding. In Maharashtra, Maharashtra Industrial
Development Corporation (MIDC) bears the responsibility. In December 2009, JBIC signed a loan
agreement with India Infrastructure Finance Company Limited (IIFCL) providing maximum of 75
million U.S. dollars as a project development fund for the promotion of a DMIC project. It is
56
assumed that it will be mainly utilized in Japan-related projects, but its scope of application in
India’s pubic bidding system is not clear. In view of such development plans, we will study the
financing for industrialization of Navi Mumbai Smart Community.
3.2 Current Status of Commercialization of Smart Community Plan from
Financing Perspective
Towards the end of 2009, the smart city plan was incorporated as part of the DFC peripheral
development. JGC Corporation became the administrative agent for Shendra district in Maharashtra
in 2011. It is conducting a feasibility study through a consortium of Mitsubishi Corporation, Ebara
Engineering, IBM Japan and Nikken Sekkei Limited along with the Yokohama City. In addition, the
consortium of Japanese-affiliated companies is also conducting surveys on many smart cities. These
plans mainly include elements such as establishment of an energy network by IT control, smart
transportation and logistics infrastructure, and a smart grid that uses renewable energy or storage
batteries. Even in Japan, there are not many smart city projects at the demonstration stage and in
typical cases there is a single land owner and many energy consumers. Further, the Feed-in Tariff
system for renewable energy is essential and it is necessary to set up incentives in addition to the
efforts (power saving by load curve shaping, demand response etc.) from customers. In reality, it is
not simple to portray a revenue-increasing business model for a smart city, even though the Masdar
smart city in Abu Dhabi is successful, and it is difficult to recover the input cost corresponding to
added value without successful residential apartments and occupancy by corporate tenants.
Furthermore, this suggestion adapts to the requirements of the guidelines on smart city 100 city
design.
3.3 Renewable Energy and Energy Conservation Funding of the
Government of India
The Government of India has many funding policies relating to renewable energy and energy
conservation that will be effective at the time of implementing smart cities, and they serve as an
incentive that drives the funding for smart cities. There are incentives for urban development as well.
However, in this section, the measures and policies for renewable energy and energy conservation,
which is the target project of the credit system between India and Japan, are given below.
3.3.1 Funding Sources and Program in India
(1) Renewable-energy-related incentive scheme
As a policy to promote renewable energy, the Government of India started implementing the
Feed-in Tariff system (FIT) in 2009 and it has also announced various incentives or preferential
treatments such as initial cost assistance/subsidy, subsidy for profitability gap, loan rate benefits, tax
57
benefits (exemption from customs duty, reduction/exemption of value-added tax, acceleration of
depreciation), and electricity sale assistance/purchase price subsidy.
Table 0.1 India’s Renewable Energy Assistance Measures
Industrial policy
i) Policies related to the new large-scale development by the Ministry of New and Renewable
Energy (MNRE): Various funding policies and promotion policies related to wind power
generation development, which accounts for 69% of the installed capacity in India, have been
established. Financial incentives, such as exemption from income tax on the power generation
revenue, have been included.
ii) Small-scale/ultra-small-scale hydro power generation project assistance: The MNRE is providing
financial assistance for starting a small-scale/ultra-small-scale hydro power generation project
in the public as well as private sectors.
iii) National Offshore Wind Energy Policy: It was approved in September 2015. Development of
financial incentives was suggested to promote foreign direct investment or public-private
partnership and international cooperation.
iv) State Electricity Regulatory Commission of Andhra Pradesh, Haryana, Punjab, Madhya Pradesh,
Maharashtra, Rajasthan, Tamil Nadu, Gujarat, Kerala, Orissa and West Bengal has announced
adoption of a preferential tax rate for purchase of electricity produced by wind power generation. An
order of preferential tariff for renewable energy in Maharashtra State is currently subject to
public comments and an order for roof-top or small-scale solar power generation was in 2015.
Provisions in 2014 federal budget
The excise duty imposed on forging steel rings used in manufacturing of bearings that are used
in wind power generator is reduced to zero from 12%.
The excise duty imposed on solar light tempered glass used in photovoltaic solar cells/modules,
solar power generators/systems or flat solar concentrators is totally exempted.
The excise duty on machinery or equipment required in the construction of solar power
generation plants is totally exempted.
The excise duty on back sheets or EVA sheets used in manufacturing of photovoltaic
cells/modules or other specific raw materials will be totally exempted.
The excise duty on the parts used in the manufacturing plants of unconventional energy
equipment is totally exempted.
The excise duty on the flat copper wire used as a raw material for PV ribbons (tin film
connection) used in production of photovoltaic cells/modules is totally exempted.
The excise duty on machinery or equipment required in the construction of compressed biogas
plants is totally exempted.
The basic custom duty rate for forging steel rings used in manufacturing of bearings that are
used in wind power generator is cut from 10% to 5%.
Special Additional Duty on parts of wind power generators is totally exempted.
The basic custom duty rate for machinery or equipment required in construction of solar power
generation plants is cut by 5%.
The basic custom duty on specific materials required in production of back sheets or EVA
sheets of solar panels is totally exempted.
The basic custom duty on the flat copper wire used in production of PV ribbons (tin film
connection) used in photovoltaic cells/modules is totally exempted.
The 5% preferential tariff rate is applicable to machinery or equipment required in the
construction of compressed biogas plants.
Incentives given by the Government of India for the development of solar power generation
division:
The excise duty on parts or equipment required in establishment of solar power generation
58
plants is exempted and preferential import duty rate is cut down.
The tax is exempted for 10 years for the solar power generation projects.
Incentives given by the State Governments for power transmission, bank transactions, sale of
power to third-parties and power buy-backs etc.
Power buy-back by the state is made compulsory and the market is guaranteed.
For small-scale solar power generation projects connected to a power grid with a capacity of
less than 33KV, incentives are given based on the power generation capacity. The Government
of India has set up small-scale solar power generation projects connected to a power grid with a
capacity of less than 33KV.
The power transmission charges are kept low as compared to other conventional energy.
Special incentives for export from dedicated Special Economic Zone (SEZ) in the field of
renewable energy.
Subsidy system to deal with the default risks of state-run electricity, water and gas
services/power distribution corporations.
30% of the operating cost of solar power generation and solar thermal projects not connected to
power grid is subsidized.
Preferential loan interest rate is applied to power generation projects not using power
transmission lines.
Financial assistance for biomass generation projects
Accelerated depreciation: 80% application is granted for specific equipment during the first
year.
The income tax is exempted for 10 years.
During the period of project launch, a preferential tariff rate is applied to machinery or parts
and excise duty is exempted.
In specific states, sales tax is exempted.
The Indian Renewable Energy Development Agency (REDA) is providing financial assistance
for the biomass power generation and bagasse cogeneration start-up projects.
Financial assistance for small-scale hydro power generation projects
Preferential tariff.
Financial assistance by the Central Government to the State Governments or private sector that
install small-scale/ultra-small-scale hydro power generators.
Application of preferential tariff rate.
Tax exemption for 10 years.
To support or promote the investment in renewable energy, energy conservation and
environmental technologies in financial terms, the MNRE established the Indian Renewable Energy
Development Agency Ltd. (IREDA) in 1987. It is providing financial assistance for renewable
energy power generation and energy conservation projects including Energy Conservation Building
Code (ECBC). It is providing 70 to 80% of the financing required for projects in the target fields,
manufacturing and acquisition of equipment for 6 to 10 years at an interest rate of 9.75 to 12.75%.
The World Bank is also providing a credit line for energy conservation project assistance to IREDA.
Further, technical and financial assistance for strengthening the deployment of renewable energy
is incorporated in the aforementioned Renewable Energy Bill, and the National Renewable Energy
Fund (National RE Fund) has been set up for providing financial support to achieve the goals. On the
other hand, the State Governments may also establish State Green Funds at the state level and
promote financial assistance for renewable energy projects, or provide financial support for equity
investment, risk sharing and research & development*9. This bill is planned to be presented in 2016
59
Parliament Session.
(2) Energy-conservation-related incentive scheme
It includes construction of the Energy Efficiency Financing Platform (EEFP) and Framework for
Energy Efficient Economic Development (FEEED). In EEFP, ESCO promotion, provision of
reasonable loan rates and capacity building of financial institutions will be implemented. Under
FEEED, establishment of venture capital funds and risk portion guarantee funds for energy
efficiency improvement projects will be considered.
In India, the Energy Conservation Act was implemented and Bureau of Energy Efficiency (BEE)
was founded in 2002 and full-fledged activities for energy conservation policies were started. This is
relatively earlier than other developing countries in Asia. In the National Mission for Enhanced
Energy Efficiency (NMEEE) that was developed as a part of NAPCC in 2008, Energy Saving
Certificates (ESCerts) Trading Scheme (PAT) and Energy Efficiency Financing Platform (System for
promotion and financing of ESCO business: EEFP) were set up. In addition, financial policies for
energy conservation such as a policy to promote switching to energy-saving equipment, incentive
setup, tax benefits etc. have been established. The Modi Government has developed a smart city
infrastructure project targeting 100 cities in India for rapid expansion of metropolitan areas in 2015
and allocated a budget of 980 billion rupees for the period of 5 years*110
.
Table 3.2 Energy conservation funding mechanism prescribed in National Energy Program
(NMEEE)
Energy Saving Certificates
Trading Scheme (Perform,
Achieve and Trade: PAT)
Cap-and-trade system for energy conservation. The target energy
consumption per unit of GDP (SEC) is defined for specific energy
consumers (DC) from eight different types of industries, and
Energy Saving Certificates (ESCerts) would be traded between the
companies that exceed their target and companies that cannot
achieve their target.
Market Transformation for
Energy Efficiency (MTEE)
Policies to promote utilization of international funds and CDM
Energy Efficiency Financing
Platform (EEFP)
Projects to promote the development of ESCO market from a
funding and human resources perspective through government
programs
Construction of Framework
for Energy Efficient
Economic Development
(FEEED)
Financing schemes such as Partial Risk Guarantee Fund for Energy
Efficiency (PRGFEE), Venture Capital Fund for Energy Efficiency
(VCFEE) etc.
The State Government has established State Designated Agency (SDA) to promote energy saving
9 In December 2015, a plan was announced to set up equity funds of 1 billion U.S. dollars. However, initially, the investment will be made in renewable energy projects of state-owned enterprises. 10 World Energy Council "2015 World Energy Issues Monitor"
60
policies within the state based on BEE policy and “State Energy Fund” has been also set up.
(3) Infrastructure investment institutions
In India, there are many companies other than banks that deal with investments and loans
especially for infrastructure or power generation projects. They include the Indian Renewable
Energy Development Agency Limited (IREDA), PTC India Financial Services Limited (PFS),
Power Finance Corporation Limited (PFC), and India Infrastructure Finance Company Limited
(IIFCL).
IREDA is a non-banking organization that provides financing for renewable energy and energy
conservation projects and also provides joint financing with national financial institutions as well as
the World Bank or ADB. It also has a track record of accepting financial assistance from JICA and
KfW (Germany), NIB (Norway) and AFD (France). PFS has been providing special investments and
loans to the power generation sector and so far it has invested 50 billion rupees. It has also provided
financing to seven to eight supercritical coal-fired thermal power stations (total 13,000 MW) in the
past year in spite of the emphasis being put on renewable energy.
3.3.2 Overseas Funding Sources and Mechanism
(1) Sources of funding for smart cities from the World Bank, the Asian Development Bank etc.
The budget of 480 billion rupees (approximately 860 billion yen) sanctioned by the Government
of India for the period of 5 years from 2015 for a smart city development project is financed as a
loan from the World Bank and the Asian Development Bank from 2015 to 2020. The Ministry of
Finance is planning to further raise funds by approaching the New Development Bank BRICS, Asian
Infrastructure Investment Bank, KfW, GIZ (Germany), AFD etc.
These international financial institutions also provide technical assistance for creating a smart city
plan, and UK and USAID are also participating in this.
(2) Foreign banks
Foreign banks are also playing an active role in India and providing financial assistance to
infrastructure-related projects having strong demand for funds. Out of the 35 advanced banks, City
Bank, Standard Chartered Bank and HSBC are the three strongest players, and Bank of
Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank from Japan have branches in India. While
European and US banks have limited finances due to the impact of Europe’s debt crisis in recent
years, Asian banks are picking up momentum.
61
3.4 Financial issues related to smart cities in India
(1) Pursuit of low initial costs
Even though Japanese technology, which has high initial costs, has a high net present value for the
duration of project, it takes time to recover the investment. When the local businesses make a capital
investment, the financial institutions in India give extreme importance to limiting the initial costs
rather than considering the life cycle costs. Further, supported by the high economic growth in India,
higher priority is put on expanding production than on energy saving. As a result, the trend of
installing cheaper pieces of equipment, even though they consume a lot of energy, is more prevalent
than installing state-of-the-art equipment with high-efficiency. According to the officials of local
financial institutions, although they recognize the superiority of high-quality and high-efficiency
technology from Japan, it becomes difficult for them to consider it if the price does not fit within 20
to 25% of the cheapest price of the same technology offered by other countries.
(2) Importance of demonstration projects
It is said that in India, decisions on new technology are made based on the actual experience of
using the equipment concerned or based on the word-of-mouth communication rather than the data
obtained from experiments and research/surveys. Therefore, it is important to increase the sense of
security that Indian operators have towards Japanese technology by demonstrating technologies
suitable to Indian market via pilot projects at an early stage.
(3) Energy costs are being limited to low levels
Power prices in India have been kept low. The reason for a deterioration in the finances of power
division of India is because the power rate for agriculture and households is set intentionally low
when compared to the power rates for industrial usage, and the financial institutions are also
pessimistic about new investments. Further, as per the power purchase agreement with Indian power
distribution company, the fixed rates are determined separately up to 85% of actual availability
factor and for 1kWh in case of power generation above that, and the purchase price of the power
generated above 85% is extremely low. Therefore, there is no incentive for companies to generate
power by improving their power generation efficiency.
3.5 Fundraising methods for commercialization of Navi Mumbai smart
community project
In order to implement the smart city project, the project would be executed by dividing it into
multiple phases based on a master plan that determines the order of priority. Regarding the land, we
have been informed that SKIL Infrastructure Limited, which is the developer of this project, has
already carried out bidding and obtained land from the local government, and the land expropriation
62
has been completed. Hereafter, we would at first enter into EPC contracts related to the development
of infrastructure such as water supply and sewerage systems (already obtained approval from
Maharashtra Water Supply and Sewerage Board), power supply facilities etc., which are the
components of basic urban development. In the proposal of Navi Mumbai smart city project plan,
the study/survey carried out for the development of sustainable infrastructure of Shendra Industrial
Park in Maharashtra State promoted by DMIC in the above-mentioned "Infrastructure and system
export promotion survey consignment project (feasibility study of smart cities in the global market),"
which was undertaken by JGC consortium in FY2010 based on the consignment by the Ministry of
Economy, Trade and Industry, will be considered as the reference.
3.5.1 PPP system in India
As mentioned above, it can be considered that the commercialization of all the contents of a smart
city would be implemented by using the PPP schemes established by SPV.
Based on the "Guidelines for Financial Support to Public Private Partnerships in Infrastructure" of
the Ministry of Finance, Economic Affairs Division*11
, every state establishes a PPP unit (PPP cell).
In particular, the three states of Andhra Pradesh, Gujarat and Punjab are developing comprehensive
legislations related to PPP infrastructure projects.
In India, there is a system called Viability Gap Funding (VGF) to support the PPP projects. This
is a scheme to commercially establish infrastructure projects, which are socially significant but have
low profitability, by compensating the deficit of project profitability with a government subsidy.
Under this scheme, it is possible to obtain 20% of the total project cost from the Central Government,
and if the implementing organization is a government or government-affiliated organization, then a
further 20% can be obtained from the implementing organization and a maximum of 40% of the total
project cost can be subsidized (Grant). A PPP cell*112
would be the donor agency and the approval
authority would differ based on the amount of VGF application.
・ VGF up to 1 billion rupees: *1 13
Approved by the Empowered Institution (EI: approving
organization)
・ VGF up to 2 billion rupees: *114
Approved by Empowered Committee (EC: approving committee)
11 http://pppinindia.com/VGF_Guidelines_and_Forms.php 112 http://pppinindia.com/approval-committees.php#2 113 Empowered Institution (EI: approving organization): An institution, company or inter-ministerial group designated by the Government for the purpose of this Scheme 114 Empowered Committee (EC): It is an approval committee with the ‘Secretary’ of Economic Affairs, Ministry of Finance as the Chairman, and comprising of ‘Secretary’ of Expenditure, ‘Secretary’ of Planning Commission, and ‘Secretary of the line ministry dealing with the subject’
63
・ VGF exceeding 2 billion rupees: Approved by the Finance Minister and EC
Applicability criteria of VGF scheme in India is that the percentage of private investment should be
51% or more, method of procurement is by public competitive bidding, and at times the private
company might also carry out fundraising, construction, maintenance and administration of the
project. Further, in projects where compensation for offering the services is obtained directly from
the end-user, it is an applicability criterion that one cannot increase the fee (usage fee) in order to
improve project profitability and the duration of project cannot be extended. 15
In the scope of
application, the following items have been considered as the targets: roads, bridges, railroads, ports,
airports, irrigation & water canals, power, urban transport, water supply, sewage system, waste
treatment, other physical urban infrastructure, infrastructure projects in the Special Economic Zones
(SEZ), international convention center, and other sightseeing-related infrastructure. The final
approval for 31 projects (total project cost is 100.86 billion rupees and total VGF is around 19.87
billion rupees) was obtained by July 2013. Table 2-3 indicates the number of projects of VGF by
sector.
Table 0.5.1 Status of approval and provision of VGF by the Central Government of India (July
2013)
VGF application
Approval process
(July 2013)
Number of projects (total and by sector)
Tota
l
Tra
nsp
ort
atio
n
Pow
er
Educa
tion
Subw
ay
Rai
lway
s
Air
port
Wat
erw
ork
s
Med
ical
car
e
Oth
ers
Projects with final approval
31 30 1 0 0 0 0 0 0 0
Projects with basic approval
116 102 1 10 2 0 1 0 0 0
Approval under consideration
8 3 1 1 1 0 0 1 1 0
Other proposed projects
8 5 0 0 0 2 0 0 0 1
Total 163 140 3 11 3 2 1 1 1 1
Source: PPP in India website
Further, other PPP support schemes in India and state-level schemes are shown in Table 0 and
115
Scheme and Guidelines for Financial Support to Public Private Partnerships in Infrastructure, Annex-1, 3 Eligibility
64
Table 0.
Table 0.5.2 List of PPP Schemes
Policy Outline Related
organizations
Year of
commencement
Viability Gap Funding (VGF) Provision of subsidy for
the capital costs
Ministry of Finance,
PPP cell 2005
India Infrastructure Finance
Company Limited (IIFCL) Long-term funding IIFCL 2006
India Infrastructure Project
Development Fund(IIPDF)
Interest free loan for
project formation
Ministry of Finance,
PPP cell 2008
Infrastructure Debt Funds
(IDF)
Factoring by Mutual
Fund or Non-bank
financial company
(NBFC)
RBI, SEBI 2013
Source: PPP India Database*116
Table 0.1.3 PPP infrastructure support scheme in Maharashtra
Name of the scheme Abbreviation Nature of
funds Po
wer
Wat
er
Su
pp
ly
Ro
ads
Su
bw
ay
Har
bo
r
Ind
ust
ry /
To
wn
Maharashtra Suvarna Jayanti
Nagarotthan Mahaabhiyan MSJNM
Grant
aid 〇 〇
Maharashtra
Urban
Infrastructure
Fund
Project
Finance Fund MUIF_PFF
Grant
aid △ △ △ △
△
Loan
Project
Development
Fund
MUIF_PDF Contingency
funding △ △ △ △
△
Debt Service
Reserve Fund
MUIF_DSR
F
Loan
guarantee △ △ △ △ △ △
Note: In the table, the symbol “○” indicates items for which it is clearly specified that the corresponding sectors are
the targets, and “△” indicates items for which it is assumed that the corresponding sectors would be the targets.
Source: Prepared by MUMSS based on JICA “PPP Survey on the Promotion of Foreign Direct Investment in
Infrastructure Projects in India, workshop materials”
16 PPP India Database www.pppinindia.com/pdf/draftnationalppppolicy.pdf
65
3.5.2 Reviewing the fundraising based on the Navi Mumbai Smart PPP Scheme
Since the Navi Mumbai Special Economic Zone (NMSEZ) is a part of DMIC, by anticipating the
usage of Project Development Fund (PDF), SKIL Infrastructure Limited has already formed an SPV
with the following four organizations and it is carrying out land expropriation, fundraising etc. Also,
it has been granted permission to undertake the development of this area on behalf of the local
government under the Maharashtra Regional and Town Planning Act, 1966.
Members of Navi Mumbai Special Economic Zone SPV
① Skil Infrastructure Ltd.
② Reliance Group (a private conglomerate that is engaged in a wide range of businesses, such as
Finance, Communication, Power, Infrastructure, Media, Real Estate, Healthcare etc.)
③ Jai Corp.
④ CIDCO Ltd. (City and Industrial Development Corporation of Maharashtra)
In this section, a scheme for fundraising, when an SPV is developing the solar power generation
project which is the target of JCM and BEMS/Inverter Air-conditioner (INV-AC) project as an
aspect of the smart city, would be studied. Annually, 1 billion rupees would be provided for each city
in the smart city development project. However, considering the fact that these funds would be used
for the development of basic infrastructure such as water, garbage treatment, and power distribution
networks, it is essential to study independent funding schemes that are devised for the target
projects.
(1) SPC owns the solar power generation plant
Fundraising in renewable energy projects is generally done by establishing a Special Purpose
Company (SPC). It is in the form of project finance in which the repayment of funds relies on the
cash flow of revenue from electricity sales. It was decided that an SPC would enter into an
agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL) for the
power supply, and it would make full use of the state’s preferential tariff for solar power. SPC would
carry out the solar power generation projects as an IPP, and with separate private investments by
Japan and India for power generation projects apart from SPV, the chances of installing Japanese
equipment would be increased. In addition to the funding sources mentioned above, application of
overseas investment schemes of JBIC, JICA etc. can also be considered as part of the domestic and
foreign loans. SPC sells electricity to MSEDCL and earns revenue from selling power. Regarding
the power rates that the power users inside NMSEZ pay to MSEDCL, if there is a competitive edge
compared to other states, it is hard to say that it would hinder attracting investments to the said area.
66
Figure 0.1 Scheme if SPC owns the solar power generation plant
(2) Leasing the installed equipment to the companies and residents of NMSEZ
The following initiatives can be considered for the owners of commercial facilities and owners of
residential properties that have been invited to NMSEZ: Conducting awareness sessions about the
building energy saving codes to promote the installation of BEMS, INV-AC, roof-top type solar
devices or conducting awareness sessions regarding the incentives for roof-top solar devices etc. and
promoting by creating guidelines when inviting people or enterprises to the said area, or establishing
conditions etc. However, it cannot be denied that the initial investment, including the equipment of
Japanese companies, would be expensive. Therefore, it is necessary to offer incentives for installing
BEMS/Inverter Air-conditioners in the buildings or in the enterprises that have been invited to
NMSEZ. Therefore, provision of equipment leasing schemes by SPV to reduce the initial investment
cost for the organization that installs the equipment can be considered as one of the methods.
According to the "Survey on the expansion of commercial credit companies in Asia" conducted
by Nomura Research Institute that was commissioned by the Ministry of Economy, Trade and
Industry in FY2010, leasing is being provided in India with respect to personal durables, cars,
MIDC
Investment
NMSEZ SPVState Power
Corporation
(MSPGC)
Investment
Power supply
Japanese and
Indian
shareholders
Investment SPC
(Solar power
generation)
MSEDCL
Power rate
(+ a l i ttle extra)
Financing Power supply
Local banks
/ Domestic and
international
publ ic funds
Power rate
Power supply
destinations
ins ide NMSEZ
67
two-wheelers, machine tools, information systems etc.
These leasing companies lease the target equipment to companies that would install it, and the
end user has to regularly pay the difference in amount with the power rates (energy saving amount
and solar power generation amount) upon using the equipment. On the other hand, regarding the
initial equipment procurement, the leasing company would use a low-interest loan of domestic and
international public funds to promote energy-saving and solar power generation, or in order to
promote installations in the area, incentives would be given to implement the same schemes in the
leasing company by SPV financing the leasing company at low interest rates (refer to Figure 3.2).
Figure 0.2 Scheme when SPC leases the equipment
4. Studies of measures to reduce risk
The development of smart cities proposed herein require substantial funds and time. In financial
terms, the area failed to acquire grants from the central government, as it was not selected among the
first twenty potential smart cities in the Smart City Mission challenge. However, at present, the
MIDC
Investment
NMSEZ SPV
Domestic and
international
publ ic funds
Low-interest loan
Low-interest loan
Leas ing company
BEMS/INV-AC: Device lease Lease fees Lease fees Leas ing of solar power devices
(energy saving amount) (Solar power generation amount)
Owners of commercia l
bui ldings etc.
Owners of res identia l bui ldings
etc.
(owners of condominiums and
hous ing companies)
Power supply Power supply Power rate (minus solar power generation amount)
MSEDCL
Power rate (minus energy
saving amount)
68
Maharashtra state government is scheduled to provide funds for the development of Navi Mumbai.
In order to continually receive state support, there must be advantages for the state government as
well. The state government will benefit from increased tax income, enhanced employment and
environmental improvements, which will occur if the businesses can be successfully attracted to the
industrial area. Risk can be reduced by first drawing a grand design of the entire smart city, and then
dividing the area and components into smaller parts that can be individually addressed in phases in
order to develop a smart city.
We also believe that it is important that the development of NMSEZ is not assumed solely by
SKIL. Stakeholders in support of the development of NMSEZ should be gathered to diversify funds
and development components. From this perspective, showcasing smart cities will help exhibit the
significance of a smart community in NMSEZ and contribute to attracting stakeholders.
69
Chapter 3. A study of emission reduction methodologies applicable
when implementing projects and use of the methodology to
estimate potential emission reductions
1. A study of technological solutions to be adopted in a JCM project
In Chapter 2, we made proposals for the introduction of various technological solutions. In this
chapter, we will make the following considerations:
a. The potential for spreading Japanese low-carbon technologies and products
b. Target industries are yet to be determined, and thus technologies providing direct solutions
for manufacturing processes at factories would be difficult to adopt.
c. Electric power supply from the grid can be expected.
d. The certainty of MRV of emission reductions resulting from the JCM project.
Then, with a view to develop a JCM project, we will first address the three technologies provided
below, and in the succeeding subsections, discuss applicable emission reduction methodologies and
estimate potential reductions using the methodology.
1. PV power generation
2. Installation of a Building Energy Management System (BEMS) in commercial
establishments
3. Installation of inverter air conditioners in housing
The installed capacity of the PV power generation system considered is 210MW, covering a
feasible area of 147ha, including ground surface and rooftops, against NMSEZ’s total area of
2000ha.
India currently measures the efficiency of air conditioners using the Energy Efficiency Ratio
(EER), energy consumption standards based on the rated power output of equipment, but has been
deliberating the adoption of the Seasonal Performance Factor (SPF) as a method of evaluation.
2. Study on JCM-MRV and Estimation of GHG Emission Reduction
2.1 Solar Power Generation
The daily hours of sunlight in India are longer and solar radiation is also strong; therefore, solar
energy is considered to be a promising energy source. The Government of India formulated
“Jawaharlal Nehru National Solar Mission (JNNSM)” in 2010 and set the target of deploying a total
of 20 GW of solar power generation by 2022. In June 2015, the target was revised to 100 GW (out of
which, 40 GW would be a rooftop type and 60 GW would be a medium- to large-scale grid
70
connection type) of solar power generation by 202217
. At present, the solar power generation
accounts for just 1.5% (4,346.82 MW) of the total composition of power sources.
*1 RES = Renewable Energy Sources.
*2 Small hydro power indicates a scale below 25 MW.
Source: Created by MUMSS based on CEA Executive Summary Power Sector
Figure 3.2.1 Total Power Source Composition in India (Left) and RES Breakdown (Right) [End of
December 2015]
Maharashtra State, which is the target area of this project, aims to deploy 7,500 MW of solar
power generation in next 5 years through the “Policy relating to grid connection power generation
project derived from new and renewable energy sources (2015)” and the total capacity of the
currently approved project is 360.25 MW18
.
The deployment of solar power generation through this project will contribute to the policies set
forth by the Government of India and Maharashtra State.
17 Jawaharlal Nehru National Solar Mission（JNNSM）plays central role for promoting
solar energy in India , as a significant national initiative taken by government under
National Action Plan on Climate Change( 2008). At the beginning, JNNSM set up the
target for introducing capacity of solar power to 20GW by 2022, however, in 2015, the
target was increased substantially to 100 GW by 2022. 18 Maharashtra Energy Development Agency http://www.mahaurja.com/PDF/PG2_GridConnSPPCommissioned.pdf
Coal 60.86%
Hydropower 14.99% Gas
8.61%
Nuclear power 2.03%
Diesel 0.35%
Wind power 8.57%
Small hydro power*2
1.46%
Biomass 1.6%
Solar power 1.53%
Waste 0.04%
RES*1 13.2%
71
2.1.1 eligibility criteria
Table3.2.1 Eligibility Criteria
Criteria Details Basis for setting
Eligibility
criteria 1
The activities of this project include deployment of a
new solar power generation system on the sites where
the renewable energy generation plants were not
operating before implementation of the project
activities.
The capacity of solar power
generation facilities in India is not
more than 1.5% of the total power
generation and this project will
contribute to the policies relating to
solar power generation being
promoted in India.
Eligibility
criteria 2
The solar power generation system deployed through
this project is connected to the grid or connected to the
internal grid on the project site.
This project aims for mega-solar
and building rooftop solar power
generation that will allow grid
connection.
Eligibility
criteria 3
Total service including the operation is provided. A definite impact will be assured
for a certain period of time and the
maximum contribution will be
ensured to the host country.
Eligibility
criteria 4
The solar cell of the solar power generation system
installed through this project has acquired performance
and safety certification standards by the International
Electrotechnical Commission (IEC) or national
standards that perfectly match with these certifications.
The specific International Electrotechnical Commission
(IEC) standards are:
- Performance certification standards: IEC 61215
(crystal system), IEC 61646 (thin film system) and IEC
62108 (condensation type)
- Safety certification standards: IEC 61730-1 (structural
review), IEC 61730-2 (testing)
As performance degradation or
failures/defects are occurring in
some products in India, product
quality and reliability is authorized
and steady emission reduction is
achieved through stable operation.
This is achieved by selecting
equipment/devices that have
acquired International
Electrotechnical Commission (IEC)
performance and safety
certification standards.
1.1.1 Calculation of reference emission
The reference emission in this methodology is the CO2 emission generated from the use of fossil
fuels in the power stations connected to grid power system that is used when solar power generation
system is not installed. It is obtained by multiplying the power generation amount by the CO2
emission coefficient of the grid.
Parameter Details Source
RE p Reference emission in the interval p
[tCO2] Calculated using formula
72
EGi,p Net power generation amount by solar
power generation system i installed
through this project in the interval p
[MWh/p]
Actual result being monitored
InvLossPJ Maximum loss of inverter installed in
the project Catalog value
InvLossRE Maximum loss of reference inverter Default value set conservatively in
advance based on the market survey
EFgrid CO2 emission coefficient of grid
[tCO2/MWh] Latest formula value at the start of the
project is used as a prior setting value
(default value).
In ensuring Net Emission Reduction, an inverter having more loss than the inverter used in the
project (power conditioner) is assumed as a reference inverter. Maintainability is ensured by
over-estimating the inverter loss and undervaluing the net power generation amount supplied by the
project to the grid.
2.1.2 Calculation of project emission
The power consumption of auxiliary equipment used for lighting or building cooling etc. installed
through this project is added as a project emission.
Parameter Details Source
PE p Project emission in the interval p
[tCO2] Calculated using formula
EGAUX,p Power consumption by auxiliary
project device in interval p [MWh/p] Actual result being monitored
2.1.3 Monitoring items
The items to be monitored in this methodology are given below.
Parameter Details Source
EFgrid CO2 emission coefficient of grid
[tCO2/MWh]
0.995
InvLossRE Maximum loss of reference inverter 0.05 (provisional value based on market
survey)
73
The aforementioned CO2 emission coefficient uses combined margin calculated using the
operating margin of 75% and build margin of 25%.19
2.2 Energy Management System (EMS)
An energy management system (EMS) carries out visualization of electric power consumption,
controls the equipment for power saving (CO2 reduction), and controls the renewable energy such as
solar power generator and storage battery etc. In Japan, definitions and applications of EMS in
installation facilities such as Home, Building, Community and Factory etc. are wide-ranging and are
referred to as HEMS, BEMS, CEMS and FEMS. On the other hand, the basic function of EMS to
monitor and control the energy demand and supply is common regardless of the various names of
EMS that represent the place where it will be installed.
Therefore, “EMS” will be used as a generic term for installation technology in this document and
MRV methodology corresponding to the EMS installation project will be studied.
2.2.1 Eligibility criteria
This methodology is applied to the projects meeting 4 eligibility criteria summarized in Table3..
This methodology is intended for projects aiming to reduce energy consumption through
optimum control of energy utilization by installing EMS in factories, buildings and community.
EMS in this methodology aims to improve and optimize the operation efficiency of target equipment
and facilities by installing energy utilization measurement devices, controllers, data collection,
storage, analysis and diagnosis devices for some or all the equipment and facilities of the target
plants, buildings and communities of the project.
The biggest problem in an EMS installation project is the difficulty of quantifying its results.
MRV methodology corresponding to the project having such characteristics should be developed by
taking into consideration a way to resolve the complexity in prior energy consumption data
collection and monitoring, because it is difficult to specify reference emission settings or causes of
reduction effect for EMS installation. Here, a valid effectiveness of EMS installation for operators
will be quantified and a simple method for quantification will be studied.
Demand control is one of the objectives of installing an EMS. If the electricity charges vary based
on the time period like in Japan, visualization of load variations by EMS and standardization of
electric power consumption by corresponding peak cut control will help to reduce energy cost. On
the other hand, standardization of this electric power consumption is not always directly linked with
the energy saving and reduction of GHG emissions. To quantify such energy saving and GHG
emission reduction effect, it is essential to have conditions such as obtaining data about hourly
19 IGES grid emission coefficient list http://pub.iges.or.jp/modules/envirolib/view.php?docid=2137
74
emission coefficients of target system power supplies etc., which clearly define the load
standardization effect. However, collection of such data is an extremely difficult requirement in
developing countries. Therefore, projects where the EMS installation effect is limited to demand
control are outside the scope of application.
Table3.2.2 Eligibility Criteria
Criteria Details Basis for setting
Eligibility
criteria 1
The project should aim to reduce energy consumption
through optimum control of energy utilization by installing
EMS in factories, buildings and communities.
Only the monitoring
(visualization) of energy
consumption should be carried
out and EMS installation
projects aiming at operation
streamlining should be
excluded.
Eligibility
criteria 2
EMS should have a function to improve and optimize the
operation efficiency of target equipment and facilities by
installing energy utilization measurement devices,
controllers, data collection, storage, analysis and diagnosis
devices for some or all the equipment and facilities of the
project activity target plants, buildings and communities.
Same as above
Eligibility
criteria 3
It should be possible to quantify the improvement in energy
efficiency from EMS installation as a default value.
Complexity of monitoring
should be reduced.
Eligibility
criteria 4
Projects where the EMS installation effect is limited to
demand control should be outside the scope of application.
Energy saving effect should be
defined clearly and fixed value
should be achieved for system
power supply emission
coefficient.
2.2.2 Calculation of reference emission
The project target facilities are affected by various factors such as the weather, operations, and
economic conditions. Therefore, from a practical point of view, it is extremely difficult to quantify
the reference emission as it requires data that is stable for a long period of time.
Therefore, reference emission is calculated by this methodology by proportionally dividing the
reference energy consumption based on the actual measured value of project energy consumption as
shown below and multiplying it by the emission coefficient of the reduction target energy. Energy
reduction is classified into that related to electric power and fossil fuel, and the total reference
emission is obtained by adding the respective reference emissions.
pfuelpgridp RERERE ,,
Here,
REp = Reference emission in the interval p [tCO2/p]
75
REgrid,p = Reference emission associated with electric power consumption in the
interval p [tCO2/p]
REfuel,p = Reference emission associated with fossil fuel consumption in the interval
p [tCO2/p]
i j
gridpjipj
pgrid
EFECRE
ji,EMS,
,,,
,1
Here,
ECpj,i,j,p = Electric power consumption of equipment j in application category i in the
interval p [tCO2/p]
EFgrid = CO2 emission factor of system power supply in India [tCO2/MWh]
EMS,i,j = Energy saving efficiency corresponding to equipment j in application
category i [dimensionless]
i j
jifueljifuelpjipj
pfuel
EFNCVFCRE
ji,EMS,
,,,,,,,
,1
Here,
FCpj,i,j,p = Fossil fuel consumption of equipment j in application category i in the
interval p [ton or kl/p]
NCVfuel,i,j = Unit calorific value of fossil fuel consumed by equipment j in application
category i [GJ/ton or kl]
EFfuel,i,j = CO2 emission coefficient of fossil fuel consumed by equipment j in
application category i [tCO2/GJ]
EMS,i,j = Energy saving efficiency corresponding to equipment j in application
category i [dimensionless]
The energy saving effect in each application category (ηEMS,i,j) is calculated using the actual
measured values of electric power and fossil fuel consumption as shown below. However, if the
actual measured value of energy consumption cannot be used before and after EMS installation, then
the expected value having a certain degree of reliability such as a catalog value of an EMS
manufacturer or vendor can be used.
76
pjiref
pjipj
pjiref
pjipj
FC
FCOr
EC
EC
,,,
,,,
,,,
,,,
jEMS,i, 11
Here,
ECpj,i,j,p = Electric power consumption of project equipment j in application category i
in the interval p [MWh]
ECref,i,j,p = Electric power consumption of reference equipment j in application
category i in the interval p [MWh]
FCpj,i,j,p = Fossil fuel consumption of project equipment j in application category i in
the interval p [ton or kl]
FCref,i,j,p = Fossil fuel consumption of reference equipment j in application category i
in the interval p [ton or kl]
Here, time to obtain the actual measured data for electric power and fossil fuel consumption will
be taken into consideration.
If the facility operation status of each year is fixed, reference energy consumption is calculated
using actual measurements before the project is implemented. Based on this, as a reference
consumption that takes into consideration the weather conditions such as the four seasons or rainy
and dry season etc., the energy reduction effect of EMS is quantified by comparing the actual
measured values after starting the project with the project energy consumption.
Fig.3.1 Conceptual Image of Actual Measurement Period of Energy Consumption (1 year)
77
In the real project conditions, it is expected to be difficult to sufficiently secure the actual period
of measuring reference energy consumption, and hence the study will be conducted by shortening
the actual measurement period to 6 months or 1 month by organizing the conditions. As mentioned
before, the target period for actual measurement relating to an energy usage calculation throughout
the year will be shortened assuming that the conditions other than weather conditions are identical
while taking into consideration the maintainability. Fig. 3. is an illustration of an actual reference
measurement period of six months. As a condition, the target six months should include months
having the highest and lowest average outside air temperature. Based on this, an EMS installation
effect can be obtained that takes into consideration an impact the same as that of a change in
temperature throughout the year.
Further, Fig.3. is the 1-month measurement model. The actual value of reference and project
energy consumption is measured by switching the EMS ON/OFF for every given period of time in
the month having the highest outdoor air temperature. The EMS efficiency value is maintained by
using data for months having a high outdoor air temperature.
Operating air-conditioning is of no use when the air-conditioning load is less than the equipment
capacity and the air-conditioner is in a partial load operation state. Energy saving can be achieved by
optimizing the operating condition at that time using EMS. The capacity of an air-conditioner is set
at the timing when the load is maximum (when the temperature is highest) and energy saving is not
achieved by EMS control during the maximum-capacity operation of the equipment. Therefore, a
conservative calculation can be achieved by calculating the EMS installation effect based on data for
the month having the highest outdoor air temperature.
Fig. 3.2.2 Illustration of Actual Measurement Period of Energy Consumption (6 months)
78
Fig.3.2.4 Illustration of Actual Measurement Period of Energy Consumption (1 month)
2.2.3 Calculation of project emission
The project emission is that based on energy consumption when the target project facility has an
EMS installed as shown below. However, when installing an EMS on multiple devices or pieces of
equipment20
, the emission will be calculated for each application category (air-conditioning, lighting
etc.) and the emissions of project activity for each energy type (electricity, fossil fuel) will be added
up.
pfuelpgridp PEPEPE ,,
Here,
PEp = Project emission in the interval p [tCO2/p]
PEgrid,p = Project emission associated with electric power consumption in the interval
p [tCO2/p]
20
When installing an EMS on multiple devices or pieces of equipment, the measurement can be done
based on the estimated or theoretical value by sampling based on J-MRV Guideline 2. (7) for each energy type and same application category.
79
PEfuel,p = Project emission associated with fossil fuel consumption in the interval p
[tCO2/p]
i j
gridjipjpgrid EFECPE ,,,
Here,
ECpj,i,j,p = Electric power consumption of equipment j in application category i in the
interval p [tCO2/p]
EFgrid = CO2 emission factor of system power supply in India [tCO2/MWh]
i j
jifuejifueljipjpfuel EFNCVFCPE ,,,,,,,
Here,
FCpj,i,j,p = Fossil fuel consumption of equipment j in application category i in the
interval p [ton or kl/p]
NCVfuel,i,j = Unit calorific value of fossil fuel consumed by equipment j in application
category i [GJ/ton or kl]
EFfuel,i,j = CO2 emission coefficient of fossil fuel consumed by equipment j in
application category i [tCO2/GJ]
2.2.4 Emission reduction
An emission reduction is obtained by subtracting the reference emission from the project emission
using the following formula.
ppp PEREER
Here,
REp = Emission reduction in the interval p [tCO2/p]
REp = Reference emission in the interval p [tCO2/p]
PEp = Project emission in the interval p [tCO2/p]
2.2.5 Monitoring items
The items to be monitored in this methodology are given below.
Parameter Data Application
80
EFgrid CO2 emission coefficient of
system power supply in India
During validation, it is considered as the latest
value that is available to the public, and the
monitoring duration thereafter is fixed.
ECpj,i,j,p Electric power consumption of
project equipment j in
application category i in the
interval p [MWh]
It is considered as the actual measured value.
ECref,i,j,p Electric power consumption of
reference equipment j in
application category i in the
interval p [MWh]
It is considered as the actual measured value.
FCpj,i,j,p Fossil fuel consumption of
project equipment j in
application category i in the
interval p [ton or kl]
It is considered as the actual measured value.
FCref,i,j,p Fossil fuel consumption of
reference equipment j in
application category i in the
interval p [ton or kl]
It is considered as the actual measured value.
However, if the actual measured data cannot be obtained, the following can be considered.
Parameter Data Application
EFgrid CO2 emission coefficient of
system power supply in India
During validation, it is considered as the latest
value that is available to the public, and the
monitoring duration thereafter is fixed.
EMS,i,j Energy saving efficiency
corresponding to equipment j in
application category i
[dimensionless]
It is considered as the catalog value of EMS
manufacturer or vendor.
ECpj,i,j,p Electric power consumption of
project equipment j in
It is considered as the actual measured value.
81
application category i in the
interval p [MWh]
FCpj,i,j,p Fossil fuel consumption of
project equipment j in
application category i in the
interval p [ton or kl]
It is considered as the actual measured value.
2.3 Inverter Air-conditioner
The air-conditioner market in India in 2014 saw sales of 3.86 million units per annum21
and in
recent years it has been increasing at a rate of 5 to 6% per annum. Although based on the population
ratio it is 1/10th
of Japan, and the rate of penetration is still low, manufacturers in Japan, China and
South Korea consider it to be a future growth market.
LG and local company Voltas have a market share of around 20% and are competing for the top
spot. Samsung occupies third place, followed by Japanese and Chinese manufacturers. In Japan,
where the general split-type AC has 75 to 80% of the market share, demand for the cheaper
window-type AC is still strong.
The rate of penetration of the inverter-type, AC which is boasted to be 100% in Japan, is just
above 3%, and it is extremely low even when compared to China which is at 50% and Vietnam
which is at 35%. Under such conditions, the Japanese and South Korean manufacturers are planning
to expand their market share by enhancing the lineup of inverter machines.
MRV methodology with respect to the inverter air-conditioner popularizing project will be
reviewed in this section.
2.3.1 Eligibility criteria
Table3.2.3 Eligibility criteria summarizes seven methodology eligibility criteria. In this
methodology, the promotional projects for dispersed buildings, such as individual houses, is
excluded, and the projects to newly install inverter air-conditioners or to replace the existing ones in
public facilities or facilities such as hospitals, hotels, factories, and apartment buildings is targeted.
The standard labeling system of device areas is being implemented in India, and the operators, who
wish to manufacture, sell or import the products in Indian market, must conform to the Minimum
Energy Performance Standard (MEPS) and label display. In this system, although the regulations are
randomly classified and applied for each target product, single-phase, unitary split-type room
air-conditioner with a rating of 11,000 W or below is specified in one of the four product regulations,
and the project of installing those target machines would be a prerequisite. Further, a reduction in
21 The Japan Refrigeration and Air Conditioning Industry Association http://jraia.or.jp/download/e-book/airacon2015/index.html
82
GHG emissions, which is promoted by this project, is achieved by reducing the consumption of
electricity, and the system power supply facility is examined to clearly define the emission factor.
Table3.2.3 Eligibility criteria
Criteria Details Basis for setting
Eligibility
criteria 1
It is a project of installing new inverter air-conditioners or
replacing the existing non-inverter air-conditioners with the
inverter machines.
Including both the new
installation and existing
reference type projects.
Eligibility
criteria 2
This methodology would be applied to public facilities,
business facilities, apartment buildings etc., and does not
include independent houses.
Air-conditioner installation
project in only large-scale
buildings is targeted by
considering the complexity of
MRV.
Eligibility
criteria 3
Maximum capacity of the target air-conditioner is set as
11,000 W (38,000 BTU/h).
In the standard labeling system
targeting the consumer
electronics etc., the room
air-conditioner, which is
regulated as part of the four
mandatory regulation items, is
considered as the target.
Eligibility
criteria 4
Power supply of the target inverter air-conditioner should
be system power supply.
Targeting the system power
supply projects to clearly
define the emission factor.
Eligibility
criteria 5
Ozone Depletion Potential (ODP) of coolant used in project
device is considered to be zero.
Consideration regarding the
usage restrictions of HFC.
Eligibility
criteria 6
Calculation of Cooling Seasonal Performance Factor
(CSPF) of reference device and project device is done
based on ISO 5151.
Requirement for ensuring the
advantages of inverter.
Eligibility
criteria 7
There should be a plan to ensure that the coolant from the
device is not released into the atmosphere when removing
the existing device and project device.
Requirement after considering
the fact that it is GHG
reduction project.
When installing an air-conditioner, handling a coolant will result in emission of greenhouse gases
on a large scale. Since it is being promoted as a JCM project, along with confining the work to
devices that have zero Ozone Depletion Potential (ODP) of the coolant, it is a prerequisite that
reasonable planning is done so that coolant is not released from the device to the atmosphere when
removing the existing and project devices.
In this methodology, the emission reduction is calculated based on the difference of efficiency
between the project device and reference device. The Energy Efficiency Ratio (EER), which is based
on rated power capacity of the device, is being used as the method of evaluating the efficiency of
air-conditioner devices in India. And it is not possible to evaluate the effect of inverter technology by
measuring the energy saving by variably controlling the compressor output with respect to the
fluctuation in cooling load. Regarding this problem, advanced countries including Japan are adopting
83
efficiency evaluation methods based on the actual situation, and the Seasonal Performance Factor
(SPF), which is the method recommended in Japan, has received international standardization such
as ISO certification in 2014. In this methodology, CSPF (Cooling Seasonal Performance Factor),
which is the seasonal performance factor specific to cooling, is used as the efficiency indicator of the
device.
2.3.2 Calculation of reference emission
The reference emission is calculated by multiplying the system CSPF ratio of reference & project
devices and system power emission factor by the project power consumption that would be
measured. In order to ensure serviceability, a device with efficiency higher than that of the most
purchased device in the market is selected as the reference device.
The CSPF of a reference device and project device is established according to the following
procedure.
Step 1: Selection of reference device after considering serviceability
A reference device is selected based on the following conditions. At the time of selection, it
is handled based on the capacity of each project device. Display of energy efficiency rating in
India (evaluation index: EER) is shown in Table3.. The performance of reference device would
be determined based on market research in the future.
Table3.1 Display of energy efficiency rating in India (evaluation index: EER).
Display of energy efficiency rating
☆ ☆☆ ☆☆☆ ☆☆☆☆ ☆☆☆☆☆
2.50 – 2.70 2.70 – 2.90 2.90 – 3.10 3.10 – 3.30 3.30 – 3.50
Step 2: Determining CSPF of reference device
As mentioned above, EER is the evaluation indicator of air-conditioners in India, and it is
difficult to obtain the product information related to CSPF. Calculation of the CSPF value is done
according to ISO 5151, based on the efficiency of the device at 50% and 100% load, and the regional
meteorological data. Efficiency in case of 100% load is the EER value, and it is possible to obtain it
since it is required to specify it based on the energy saving standards. On the other hand, the value at
50% load should be measured at a dedicated facility and it is difficult to implement it in India.
In the project execution stage, it is required to establish a trend pertaining to the acquisition of
meteorological data and the CSPF calculations.
84
Step 3: Determining CSPF of project device
CSPF value of project device is a numerical value that is calculated by an evaluation method
which complies with the ISO 5151 standard. At present, there are no inspection agencies in India that
can implement the said evaluation, and the evaluation values calculated independently by the
manufacturers are being used.
Step 4: Calculation of CSPF ratio of reference device and project device for each model
It is the value obtained after dividing the CSPF value of the reference device by the CSPF value
of project device having the same capacity as that of the reference device.
Step 5: Determining the CSPF ratio project value of reference device and project device
Among the CSPF ratios of reference and project devices calculated for each model in Step 4, the
smallest value is considered as the CSPF ratio project value.
Based on the below equation, the reference emission is obtained by rebating the project power
usage by the ratio of Cooling Seasonal Performance Factor of project & reference devices, and then
multiplying it by the emission factor of system power supply.
Grid
REF
PJn
i
piPJp EFECRE
1
,,
Here,
REp = Reference emission [tCO2/p] in the ‘p interval’
ECPJ,i,p = Power consumption by ‘i type’ project device in ‘p interval’ [MWh/p]
n = Number of project devices measured using the target integrated wattmeter
[dimensionless]
i = Type of project equipment
PJ = Cooling Seasonal Performance Factor (CSPF) of project device
[dimensionless]
REF = Cooling Seasonal Performance Factor (CSPF) of reference device
[dimensionless]
EFGrid = CO2 emission factor of System power supply in India [tCO2/MWh]
2.3.3 Calculation of project emission
Using the following equation, the project emission is calculated by multiplying the emission factor
85
of system power supply by the power consumption of project device.
yGrid
n
i
yiPJy EFECPE ,
1
,,
Here,
PEp = Project emission [tCO2/p] in the ‘p interval’
ECPJ,i,p = Power consumption by ‘i type’ project device in ‘p interval’ [MWh/p]
EFGrid = CO2 emission factor of System power supply in India [tCO2/MWh]
2.3.4 Emission reduction
Emission reduction is obtained by subtracting reference emission from the project emission using
the following equation.
ppp PEREER
Here,
REp = Emission reduction in the interval p [tCO2/p]
REp = Reference emission in the interval p [tCO2/p]
PEp = Project emission in the interval p [tCO2/p]
2.3.5 Monitoring items
The items monitored in this methodology are, CO2 emission coefficient of system power supply in
India and the number of project devices measured using the target integrated wattmeter.
Parameters Data Application
EFGrid CO2 emission factor of
System power supply in India
During validation, it is considered as the latest value
that is publicly available, and the monitoring
duration is fixed thereafter.
n Number of project devices
measured using the target
integrated wattmeter
The persons implementing project would assign
fixed numbers from 1 to 20 to all types of
air-conditioners used in the project.
86
3. Estimation of GHG emission reduction
3.1 Solar Power Generation
GHG emission is estimated as shown below.
Pre-conditions
Solar power maximum demand forecast (MW)
= Total annual power demand forecast × Percentage of solar power generation (30%)
Annual solar power generation amount (MWh)
= Solar power maximum demand forecast × 8,760 hours (24 hours × 365 days) ×Facility
utilization ratio (0.17%)
Total power
demand
forecast (MW)
Solar power
maximum demand
forecast (MW)
Annual solar power
generation amount (MWh)
① Ulwe (Waterfront) 35 11 15,637
② Ulwe (Airport) 126 38 56,292
③ Kalamboli 147 44 65,674
④ Dronagirl 392 118 175,130
Total 700 210 312,732
Reference emission
Parameter Details Value Source
RE p Reference emission in the interval p [tCO2] 301,833
EGi,p
Net power generation amount by solar power
generation system i installed through this
project in the interval p (MWh/p)
312,732
InvLossPJ Maximum loss of inverter installed in the
project
0.02 Provisional value based
on the interviews
InvLossRE Maximum loss of reference inverter 0.05 Provisional value based
on the interviews
EFRE CO2 emission coefficient of grid [tCO2/MWh] 0.995
87
Project emission
Parameter Details Value Source
PE p Project emission in the interval
p [tCO2] 878
EGAUX,p Power consumption by auxiliary
project device in interval p
[MWh/p]
882 Calculated based on similar
case (4,200 kWh/year of
air-conditioning per 1
MW).22
CO2 emission coefficient of grid
[tCO2/MWh] 0.995
Emission reduction
ppp PEREER
= 301,833 - 878
= 300,955 tCO2/p
As mentioned above, if interval p is considered as 1 year, the GHG reduction achieved by
deploying solar power generation is estimated to be 300,955 tons per year.
Table 3.2 Assumed GHG emission reduction* by solar power generation
Reference emission
(tCO2e)
Project emission
(tCO2e)
Assumed emission
reduction (tCO2e)
① Ulwe (Airport) 15,092 44 15,047
② Ulwe
(Waterfront)
54,330 158 54,172
③ Kalamboli 63,385 184 63,200
④ Dronagirl 169,027 491 168,535
Annual 301,833 878 300,955
*Emission coefficient: 0.995 Setting of default value:
Source: Created by MUMSS based on survey results
22 http://gec.jp/jcm/jp/projects/14ps_mgl_01.html
88
3.2 Energy Management System (EMS)
In this document, the GHG emission reduction due to BEMS installation is estimated based on
the following conditions.
Assumed conditions
Annual power consumption of the area: 2,146,200 MWh (Demand: 700 MW, Average power usage:
35%)
BEMS installation area: Commercial facilities
Electric power consumption of commercial facilities: 7.5% of total area
Table 3.3 Assumed GHG emission reduction* achieved by BEMS installation project
(Legal service life of BEMS facility: 7 years)
Reference emission
(tCO2e)
Project emission
(tCO2e)
Assumed emission
reduction (tCO2e)
Annual 160,160 144,144 16,016
Total duration of
the legal service
life (tCO2e)
1,121,121 1,009,009 112,112
*Emission coefficient: Setting of default value: 0.995
Source: Created by MUMSS based on survey results
3.3 Inverter Air-conditioner
The GHG emission reduction in INV-AC installation is estimated based on the following criteria.
Assumed conditions
Number of family households (average of 5 members per family): 50,880 houses
Number of single-person households: 25,440 houses
Number of air-conditioners installed (family households): 2 units/house (101,760 units)
Number of air-conditioners installed (family households): 1 unit/house (25,440 units)
Capacity of air-conditioners installed: 1 horse- power (2.8 kW)
Operation time: 7 hours/day, and 300 days/year
Average output: 50%
η: 30%
89
Table 3.4 Assumed GHG emission reduction by INV-AC installation project*
(Legal service life of INV-AC facility: 7 years)
Reference emission
(tCO2e)
Project emission
(tCO2e)
Assumed emission
reduction (tCO2e)
Annual 372,098 260,468 111,630
Total duration of
the legal service
life (tCO2e)
2,604,686 1,823,276 781,410
*Emission factor: Setting of default value: 0.995
Source: Created by MUMSS based on survey results
4. Emission reduction potential at industrial establishments
4.1 Emission reduction potential at industrial establishments
Since we have yet know which industries will expand into the area, and thus it would be difficult
to address emissions that are directly related to manufacturing processes at factories, the previous
two sections did not discuss emission reduction methodology for these emissions. However, with
electric power consumption at industrial establishments accounting for 85% of the entire area, we
sought to evaluate the emission reduction potential of factories in some way. In this section, we will
estimate emission reduction potential based on the assumption that a Factory Energy Management
System (FEMS) has been installed.
In this section, GHG emissions reductions under an FEMS will be estimated based on the
conditions provided below. Estimations were conducted using a range of 2.5% – 25% for the energy
efficiency rate to be achieved by FEMS, as industry types and manufacturing processes are yet to be
determined, and thus actual values may vary from conservative values to those representing
aggressive renewal of equipment.
[Conditions]
Annual electric power consumption in area: 2,146,299MWh (demand value: 700MW; average
electric power consumption: 35%)
Area of FEMS installation: industrial establishment
Electric power consumption by industrial establishments: 85% of entire area
Energy efficiency rate owing to FEMS: 2.5～25%
Emission factor: 0.995kg-CO2/kWh
Based on the abovementioned conditions, the GHG emission reductions achieved by installing
a FEMS is estimated to range from 45,379 to 453,787 tons.
90
Table 3.4.1 Estimated GHG emissions reduced by FEMS installation
Reference emissions
（tCO2e）
Project emissions
（tCO2e）
Estimated emission
reductions
（tCO2e）
Minimum 1,815,149 1,769,770 45,379
Maximum 1,815,149 1,361,361 453,787
Source: compiled by IEEJ based on survey results
4.2 Estimated emission reductions achieved by a JCM project and the emission
reduction potential of installing a FEMS
The estimated emission reductions achieved by a JCM project and the emission reduction
potential of installing a FEMS is compiled in following table. The emission reductions to be
achieved by the JCM project are estimated to be 410,001tCO2e/year, after eliminating
double-counting. Total reduction potential, including the potential emission reductions of installing a
FEMS, is 448,767～797,665 tCO2e/year.
Table 3.5 Estimated emission reductions achieved by JCM project and emission reduction potential
of installing a FEMS
Estimated emission
reductions
（tCO2e/year）
After elimination of double
counts of renewable energy
and energy savings
PV power generation 300,955 300,955
BEMS 16,016 13,682
Inverter air conditioners 111,630 95,364
Total (JCM project) 410,001
(Reference)
FEMS 45,379～453,787 38,766～387,664
Total (Reduction potential) 448,767～797,665
91
Chapter 4. Analysis of the economic impact of project implementation
and the potential impact on India
1. A study of the economic impacts of the successful implementation of a
smart city development plan
The development of Navi Mumbai is still in its planning stage and while many companies have
expressed their interest in bringing their business to their area, decisions are yet to be made
concerning which industries will be represented in the area. The success of the development plan of
this area is largely dependent on whether or not companies expand into the area from overseas,
including Japan. Therefore, the successful implementation of a JCM project, and consequently the
further involvement of Japanese companies are expected to boost the development of Navi Mumbai.
The smart city plan envisages a total of approximately 280 thousand residents in the area, of
which approximately 130 thousand people will be employed in one of the local industries. Around
70 percent will work in the manufacturing industry,15 percent in tcommerce and 15 percent in
service industries.
Table 4.1.1 Number of potential workers in each area (people)
Manufacturing Commercial Service Total
DRONAGIRI 50,000 10,717 10,717 71,434
ULWE(Waterfront) 16,640 3,566 3,566 23,772
ULWE(Airport) 4,160 891 891 5,942
KALAMBOLI 18,240 3,909 3,909 26,058
Total 89,040 19,083 19,083 127,206
Workers employed by manufacturing, commercial or service companies will receive four-fold to
seven-fold of the average wage paid to agricultural workers. Therefore, they promise to have large
purchasing power. If an agricultural worker living close to the planned site moved to the smart city
and took up a job in a new industry, his wages would increase by 19.5 billion rupees.
92
Figure 4.1.1 Increased wages expected in each area
2. A study of the economic impact of a JCM project
In this section an economic evaluation will be performed on the additional costs entailed by
installing the PV system, air conditioner and BEMS identified in Chapter 3 and the energy cost
reductions achieved through energy saving efforts. Then an evaluation will be conducted on the
impacts that additional investments made for equipment introduced under a JCM project will have
on the Navi Mumbai and the domestic macro-economy. For this purpose, an inter-industry analysis
will be performed to estimate the impacts, particularly for two cases: when the equipment related to
the technology is manufactured domestically (in India, including Navi Mumbai) and when it is
imported.
2.1 Economic evaluation of additional investments and energy cost reductions
through energy savings
The formula used for calculating the additional investments required to implement a JCM project
is varied among different equipment. The additional investment required for installing PV systems is
estimated by multiplying the additional investment amount per kilowatt by the capacity of the
equipment introduced; BEMS, by multiplying the additional investment amount by the energy
savings achieved; and air conditioners, by multiplying the additional investment per air conditioning
unit by the number of units installed
The capacity of the PV system and the number of air conditioners to be installed have been
provided in Chapter 3. PV systems are to be installed in households, factories and commercial
establishment according to an area ratio of 7.5%, 85%, 7.5%. Additional investment amounts were
estimated for PV systems, air conditioners and BEMS as provided in Table 4.2.1.
0
2
4
6
8
10
12
DRONAGIRI ULWE(Airport) ULWE(Waterfront) KALAMBOLI
Billion Rs
93
Table 4.2.1 Additional investment amounts per unit of each equipment
PV (1000Rs/kW) BEMS (1000Rs/MWh) Air conditioning (1000Rs/unit)
93 31 25
The energy cost reductions achieved as a result of implementing a JCM project was estimated by
multiplying the electric power tariffs in Maharashtra by the energy savings estimated in Chapter 3.
In Maharashtra state, different electric power companies supply power based on diversified rates,
and thus the electric power tariffs were calculated using a weighted average of the different rates23
.
The electric power tariffs employed are provided in Table 4.2.2.
Table 4.2.2 Electric power tariffs in 2014-15 (Rs/kWh)
Residential Factories Commercial
6.85 9.18 10.69
Source: estimated based on Economic Survey of Maharashtra 2014-2015、Economic Survey of Maharashtra
2010-2011
Net benefit was calculated by adding additional investment and saved energy cost, resulting in 1.1
billion Rs for BEMS and 2.2 billion Rs for air conditioning. PV systems will generate net benefits of
5.4 billion Rs in factories and 0.8 billion Rs in commercial establishments, while costing households,
with relatively low electric power tariffs, net costs of 0.01 billion Rs (Figure 4.2.1)。
Figure 4.2.1 Estimates of direct benefits and costs
1.1.1. 2.2 Analysis of the impact of additional investment on domestic production
23 While 2014-15 data was accessible for electric power rates, 2010-2011 was the most recent data available for amount of power generated. Therefore these data were used calculate the weighted
average.
-20
-15
-10
-5
0
5
10
15
20
25
PVHousehold
PVIndustry
PV Commercial
Air conditioner
BEMS
Saved energy costAdditional investmentTotal benefit
Billion Rs
94
and employment
Additional investment will generate new demand, thus affecting domestic industry and
employment. The total investment amounts estimated in Table 4.2.1 were divided into industries
using the ratios derived from various literature and provided in Table 4.2.3 in order to estimate the
impacts on domestic industrial production and employment.
Table 4.2.3 Share of additional investment for equipment by industry
PV BEMS Air conditioning
Machinery 74% 21% 80%
Other manufactured
industrial products 0% 4% 0%
Construction 15% 4% 14%
Commercial 10% 5% 5%
Transportation 1% 0% 1%
Software 0% 66% 0%
If all relevant goods were to be manufactured domestically, then total production, including
induced production, would amount to increases by 57.9 billion Rs for PV systems, 9.6 billion Rs for
air conditioning, and 0.6 billion Rs for BEMS, or collectively 68.1 billion Rs, which is equivalent to
0.5% of Maharashtra state’s GDP. Furthermore, increased manufacturing would create employment -
68.8 thousand persons for PV systems, 11.1 thousand persons for air conditioning, 1.3 thousand
persons for BEM, or a total of 81.3 thousand persons. Air conditioners and PV systems, in particular,
call for investment in the machinery and construction industries, which receive much input from raw
material industries; and therefore, economic impact would be substantially different depending on
whether they are domestically manufactured or imported. If all equipment were to be imported, then
total production, including induced production would be limited to 10.9 billion Rs for PV systems,
1.4 billion Rs fro air conditioning and 0.4 billion Rs for BEMS, or 12.4 billion Rs collectively.
Employment increases would also be limited to 22.8 thousand persons for PV systems, 2.6 thousand
persons for air conditioning, and 1.1 thousand persons for BEMS, amounting to a total of 22.8
thousand persons.
95
Figure 4.2.2 Production induced by additional investment
Figure 4.2.3 Employment induced by additional investment
Installing air conditioning, BEMS, and industrial and commercial PV systems can be beneficial
depending on the energy cost reductions achieved. However, households installing PV systems
would have to shoulder larger introduction costs than the benefits of energy conservation.
Furthermore, the benefits to be enjoyed are limited when air conditioners and PV systems are
imported. However, when they are manufactured domestically, domestic production and
employment can be increased, thus affecting the entire economy positively. When developing a
smart community, we would advise that companies manufacturing energy environment-related
technologies be invited to pursue their business operations in India.
0102030405060
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Imp
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PVHousehold
PVIndustry
PV Commercial
Air conditioner BEMS
IndirectDirect
Billion Rs
0 10 20 30 40 50 60 70
Dom
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Imp
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Dom
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96
3. A study of potential impacts on the entire Indian economy and energy
supply-demand
India’s energy demand is rapidly increasing as it pursues economic growth, and is projected to
continue to follow current trends. This section will study the potential economic impacts of
introducing energy-related equipment with consideration of India’s enlarging energy demand, based
on the energy supply-demand outlook through 2030 projected in Asia/World Energy Outlook 2015
(Institute of Energy Economics, Japan).
3.1 Energy supply-demand forecast for India through 2030
According to the International Energy Agency (IEA)’s energy balance data, India’s primary
energy consumption has increased by 2.5 times from 307 million tonnes of oil equivalent (Mtoe) in
1990 to 777 Mtoe in 2013. In the reference case, or the business-as-usual case, it is projected to
increase by another 1.8 times, reaching 1,360 Mtoe in 2030 (Figure 4.3.1). In terms of fuel type, coal
accounts for the largest share, representing 44 percent of energy consumption in 2013. This ratio is
projected to be maintained through 2030, with natural gas and nuclear power increasing their share.
Source: Institute of Energy Economics, Japan. Asia/World Energy Outlook 2015
Figure 4.3.1 Outlook of energy supply-demand in India
Given the progress made in electrification, electric power demand is increasing at a rate higher
than energy demand as a whole. India’s electric power demand increased by 4.1 times from 1990 to
2013, and will continue to increase by an additional 2.3 times through 2030 (Figure 4.3.1). As of
2013, 73 percent of the electricity generated relies on coal-fire thermal power plants, but this share
will shrink to 65 percent as natural gas, nuclear power and renewable energy expand their share.
0
200
400
600
800
1,000
1,200
1,400
1990 2000 2013 2020 2030
Otherrenewables
Hydro
Nuclear
Natural gas
Oil
Coal
Mtoe
97
Source: Institute of Energy Economics, Japan. Asia/World Energy Outlook 2015
Figure 4.3.2 Outlook of India’s electric power portfolio
In 2013, India is estimated to have had approximately 230 million households. This is projected to
increase to around 270 million households, in line with population growth, by 2030 (Figure 4.3.3).
The penetration ratio of air conditioners is low, with estimates suggesting that it was around 4% in
2013. Although the penetration ratio is forecasted to rise with increased income levels, it will remain
around 6% in 2030.
Source: Institute of Energy Economics, Japan. Asia/World Energy Outlook 2015
Figure 4.3.3 Outlook of number of households
Electric power consumption will increase in the residential and commercial sectors, as exhibited
in Figure 4.3.4. In 2013, electric power consumption in the residential sector was 207 TWh, while in
0
500
1,000
1,500
2,000
2,500
3,000
1990 2000 2013 2020 2030
Otherrenewables
Hydro
Nuclear
Natural gas
Oil
Coal
TWh
0%
1%
2%
3%
4%
5%
6%
0
50
100
150
200
250
300
1990 2000 2013 2020 2030
Million households
Household number
Penetration ratio
Penetration ratio
98
the commercial sector it was 82 TWh. The residential sector had used 2.5 times the electric power
used in the commercial sector. With the acceleration of household electrification, electric power
consumption is projected to increase by approximately 2.5 times, while the commercial sector is
projected to increase electric power consumption by 3.5 times, at a rate faster than the residential
sector, as a result of industrial advancement and the development of service industries.
Source: Institute of Energy Economics, Japan. Asia/World Energy Outlook 2015
Figure 4.3.4 Outlook of electric power consumption in the residential and commercial sectors
3.2 Outlook of penetration status in India in 2030
3.2.1 Air conditioners
Based on the outlook of the number of households and the penetration ratio provided in subsection
4.3.1, the number of air conditioners owned in India is estimated to be 15.57 million units in 2030.
Inverter air conditioners will increase their share of the total number of units sold, reaching 100
percent in 2030. In terms of of the number of units in use, approximately 84 percent, or 13.14
million air conditioners will have inverters installed.
3.2.2 BEMS
Estimates were performed for BEMS based on the presumption that 50 percent of all newly
constructed buildings would install a BEMS in 2030 and that 100 percent would have BEMS in
2040. Because buildings have a longer operating life than air conditioners, in 2030, 15 percent of all
buildings will have installed a BEMS, which means that approximately 44 TWh of the commercial
electric power demand exhibited in Figure 4.3.4 would have a BEMS.
0
100
200
300
400
500
600
1990 2000 2013 2020 2030
TWh
Residential
Commercial
99
3.2.3 PV power
The Intended Nationally Determined Commitments (INDC) submitted by the Indian Government
included the installation of 100 GW of PV power in 2022. As PV power is envisaged to be further
enhanced in 2030, estimations were made based on the presumption that in addition to installed
16GW in the Reference case, 134 GW would be installed in 2030, which would amount to 223 TWh
with a utilization factor of 17 percent. This is equivalent to around 8.2 percent of total power to be
generated in 2030.
3.3 The potential economic impact of installing energy-saving solutions
Based on the presumptions given above, the costs and benefits of installing air conditioners,
BEMS and PV power are estimated as provided in Figure 4.3.5. It should be noted that since the
additional costs incurred and benefits are both larger for PV power than for air conditioners and
BEMS, the scale represents a unit 10 times larger for PV power. Furthermore, saved energy costs
include reduced fuel costs and initial investment costs, and operating and maintenance costs for
coal-fired thermal power plants. Coal price is assumed to be 106 dollars/t based on the projected
price for 2030 in Asia/World Energy Outlook 2015 (Institute of Energy Economics, Japan).
Figure 4.3.5 Costs and benefits of installing energy-saving equipment (all India)
Additional investments will induce production and employment as presented in FiguresFigure
4.3.6. It should be noted again that the scale represents a unit 10 times larger for PV power. When
production is taken up domestically, the production induced would be worth 38 trillion rupees, which
amounts to approximately 0.8 percent of GDP, generating employment for 45 million people.
-1.5
-1
-0.5
0
0.5
1
PV AC BEMS
Saved energy cost
Additional investment
Net benefit
10 trillion Rs (PV), trillion Rs (AC & BEMS)
100
Figure 4.3.6 Production induced by additional investment (India)
Figure 4.3.7 Employment induced by additional investment (India)
Electric power generation would be reduced by 221TWh, amounting to 8.1 percent of total
electric power generated in 2030. (Figure 4.3.8). It should be noted that installing PV systems is also
included as an “energy-saving solution”. As shown in Figure 4.3.9, investment in coal-fired thermal
power plants will be reduced by approximately 4.1 trillion rupees, and accumulated fuel cost will be
reduced by 6.1 trillion rupees by 2030.
0
1
2
3
4
Domestic Import Domestic Import Domestic Import
PV AC BEMS
Indirect
Direct
10 trillion Rs (PV), trillion Rs (AC & BEMS)
0
1
2
3
4
5
Domestic Import Domestic Import Domestic Import
PV AC BEMS
Indirect
Direct
10 million (PV), million (AC & BEMS)
101
Figure 4.3.8 Electric power reductions resulting from energy saving efforts
Figure 4.3.9 Changes in investment resulting from installing energy-saving equipment
In the reference case, CO2 emissions of energy origin will increase by 1.8 times from 1,894 Mt in
2013 to 3,459 Mt in 2030 (Figure 4.3.10). However, by installing PV systems, air conditioners, and
BEMS, CO2 emissions in 2030 can be reduced by 206 Mt (6.0%).
0
500
1,000
1,500
2,000
2,500
3,000
1990 2000 2013 2020 2030
TWh
8.1%
(221 TWh)
-10
-5
0
5
10
15
PV, AC & BEMS Coal
trillion Rs
Initial
investment
Fuel cost
PV
AC & BEMS
102
Figure 4.3.10 CO2 reductions resulting from energy-saving efforts
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1990 2000 2013 2020 2030
MtCO2
6.0%(206 MtCO2)
103
Chapter 5. Challenges in implementing the development plan, critical
factors and challenges for success with a view to registering it as a
JCM project : Identifying the challenges in developing a JCM
project
(1)Cross-cutting issues
Of the issues that have been indicated in past JCM feasibility studies and recent
interviews with manufacturers of the technological solutions (PV power, air
conditioners, BEMS) incorporated in the proposed project, cross-cutting challenges
that may be faced in the project have been compiled into Table 5.1.1.
Table 0 Cross-cutting challenges to be faced in developing a JCM project
a. Corporate
awareness of
energy efficiency
Companies have little interest and knowledge of energy
efficiency. Given the option of increasing production to
increase profits, energy efficiency is given low priority24(*)
b. Capacity of
government and
government-affili
ated companies
Procedures to acquire approval of the project is complex
Lack of capacity on the part of the authorities stall approval
procedures25
c. Commercial
practices
Various commercial practices are different from those of
Japan
For example, suppliers are insensitive to keeping delivery
deadlines. (*)
d. Localization
Because PV panels26 and air conditioners are currently
manufactured in India, exports from Japan are not price
competitive due to shipping costs (*)
e. Tax systems Taxes are diversified among the national government and
state governments, and are generally high27
24
JFE Steel Corporation, etc. “Fiscal 2011 project accomplishment report: Project for the promotion
of technologies to counter global warming. Survey on the components of an energy efficiency
project in a JSW Steel steel plant in India” (2012)。 25
NTT Facilities, etc. “Fiscal 2011 project accomplishment report: Study for the exploration of
potential PV power generation projects in India” (2012) 26
For example, US SunEdison has business operations in India. http://www.sunedison.com/en-in 27
Mitsubishi Chemical Engineering Corporation “Fiscal 2011 Project for the promotion of
technologies to counter global warming: Study for project exploration and planning energy saving
by introducing
104
f. Land acquisition
issues
Land acquisition coordination among landowners and
residents require much time and effort.28
When conflict with residents develop into court trials,
projects are completely stalled for years until the case is
settled. (*)
(*) Points indicated in interview surveys
Source: compiled by IEEJ based on various material
From the viewpoint of developing smart community projects in NMSEZ, e. tax
systems should not be a large issue as special tax schemes (details of tax exemptions are
provided in Chapter 2) have been introduced for SEZs. Also in terms of f. Land
acquisition issues, the area to be developed under the current project has already been
acquired from the developers and should not pose any problems. However, the other
issues indicated need to be addressed: a. corporate awareness of energy efficiency; b.
capacity of government and government-affiliated companies; c. commercial practices;
and d. localization.
a. Corporate awareness of energy efficiency
Previous JCM feasibility studies have pointed out that participating companies
need to be interested in and understand the benefits of high energy efficiency and smart
communities. Also, we learned in interviews that even if we presented quantitative
information on estimated energy savings, Indian counterparts may not make any effort
to understand the numbers. An emphasis must be laid on how to communicate the
energy savings that would be possible by expanding business operations into the area as
well as the benefits of a smart community.
b. Governance
The smart community development project at NMSEZ embraces various
components ranging from infrastructure development to attracting companies to the
industrial area and running it; and therefore, a large number of approvals and licenses
are required. According to previous JCM feasibility studies, procedural delays will
obstruct the progress of the project. Also, such administrative inefficiency will be
aggravated when processes involve more than one government ministry or agency.
Therefore, relevant government organizations (mainly state governments) must be
auto combustion control system (ACCS) for coke oven in India” (2012) 28
Same as above
105
committed to a new scheme under which procedures can be advanced promptly.
Furthermore, there should only be one division responsible for matters concerning
infrastructure development, so that procedures for bringing companies to the area can
be streamlined. For example, at the Neemerana industrial area in Rajasthan state, the
Rajasthan State Industrial Development and Investment Corporation (RIICO) has
achieved higher efficiency by setting up a specialized office for procedural processes29.
In this manner, it is important for NMSEZ to gain the state government’s commitment
and establish a scheme under which the developer and the government can collaborate
closely.
c. Commercial practices
It has been revealed in JCM feasibility studies that commercial practices are very
different in Japan and India, and that projects must be taken forward in view of such
gaps. Similar points were made by the companies that we interviewed. For example,
problems with Indian construction companies and suppliers include their tendency not
to keep the promised delivery date, their rough work, which makes it difficult to
maintain a certain level of quality, and delayed delivery. Long construction periods also
pose problems. For example, it was indicated at an interview that high-end housing
could take 4-5 years to complete.
d. Labor in localication
Given the rapid growth of the manufacturing industry in India, PV panels and
high efficiency air conditioners, which are some of the target components of the current
project, are currently manufactured domestically in India. In order to meet the demand
in NMSEZ and all other Indian smart communities to be established in the future, local
production must be considered in order to pursue price competitiveness as Japanese
imports would be subject to shipping costs and tariffs.
However, according to the JCM feasibility study, it will be difficult to secure
human resources for local production. In the interviews conducted, we were also told
that given market expansion, all companies are in need of human resources and have
been competing against each other or headhunting for workers. While the technologies
involved for the current project requires a certain level of skill of factory workers, given
the growth of the manufacturing industry as a whole, headhunting can be done not only
from competitors of the same industry but also from other industries, such as the
29 JETRO “Introduction to Neemrana industrial area in Rajasthan state, India”
https://www.jetro.go.jp/jetro/overseas/in_newdelhi/neemrana/neemrana_201406.pdf
106
automobile industry. Furthermore, the strong inclination of Indian factory workers to
change jobs make securing human resources a serious issue. At the same time, training
is required for factory workers to be able to install complex equipment.
(2) Issues regarding individual technologies
①PV power generation
a. Climatic conditions
According to interviews with target companies, in order to conduct PV power
generation in India, measures must be taken to prevent seasonal variations (differences
between the rainy season and dry season), temperature and sand and dust from
reducing power generation efficiency.
i. Difference between the rainy season and dry season
India has a rainy season (July to September) and dry season (October to March)
which causes large fluctuations in power generation efficiency throughout the year.
During the rainy season, in particular, a backup power source will be required. While
storage batteries would serve the purpose of complementing the intermittency of
solar power, they are still highly priced and their installation would undermine the
viability of PV power generation.
ii. High temperatures
High temperatures will cause heat to be retained in the PV panels, consequently
lowering their generation efficiency. In regions with high temperatures (Mumbai, in
particular, in characterized by highs over 30℃ year round and can rise up to the
forties, which will cause the surface temperature of the panels to become 80-90℃.)
countermeasures must be taken against heat.
iii. Sand and dust
India is exposed to much dust, which accumulates on the PV panel surfaces, thus
lowering power generation efficiency; and therefore, the dust must be discarded as a
daily maintenance routine. It can be effectively washed away, but not only do many
areas not have water supply facilities, areas with such infrastructure are challenged
with high water rates. Thus, using water would only boost the costs involved with
installing PV power. Another challenge faced in conducting PV power generation in
India is that water with high mineral content could lead to gradual malfunction
caused by saline matter.
b. Intensified market competition and price-conscious users
As indicated in TableTable 02, the Indian federal government and the
107
Maharashtra state government both have incentive measures for PV power
generation.30。
Table 02 Incentive measures implemented by the Indian federal government and the Maharashtra
state government for PM power generation
Viability Gap Funding
(VGF)31
Jurisdiction: federal
government
A fixed power purchase agreement (max.
Rs.6.43/kWh ≒10.5 yen) and capital subsidy. The
capital subsidy involves a reverse auction with a
maximum of 10 million rupees (≒16.4 million yen)
per 1MW.
Renewable Purchase
Obligation32
Jurisdiction: Maharashtra
state government
Obligates power generation companies to purchase
renewable energy. Renewable energy certificates
can be traded. (Similar to US RPS.)
Power purchase
agreement33
Jurisdiction: Maharashtra
Electricity Regulatory
Commission
Power purchase price is determined by competitive
bidding.
13-year agreement
Prioritized power supply
Source: compiled by IEEJ based on various material
In this manner, PV support measures have been implemented, but the
circumstances are not favourable for Japanese PV panels to compete in the market.
According to the companies interviewed, market expansion has brought many
30
Chapter 2 should be referred to for other tax incentives, etc. 31
Maharashtra Electricity Regulatory Commission, (Renewable Purchase Obligation, Its
Compliance and Implementation of REC Framework) Regulations, 2010
http://www.mercindia.org.in/pdf/Order%2058%2042/Final_MERC(RPO-REC)_Regulation_2010_E
nglish.pdf 32
Ministry of New and Renewable Energy, Guidelines for Implementation of scheme for setting up
of 2000 MW Grid-Connected Solar PV Power Projects with Viability Gap Funding (VGF) under
Batch-III of Phase-II of the JNNSM,
http://mnre.gov.in/file-manager/grid-solar/Scheme-2000MW-Grid-Connected-SPV-with-VGF-under-
JNNSM.pdf 33 Maharashtra Electricity Regulatory Commission, Maharashtra Electricity Regulatory
Commission (Terms and Conditions for Determination of Renewable Energy Tariff) Regulations,
2015 http://www.mercindia.org.in/pdf/Order%2058%2042/MERC(TandC%20for%20Determination%20o
f%20RE%20Tariff)%20Regulations,%202015%20.pdf
108
companies to the Indian market, but this on the other hand has intensified market
competition, and hence price competition. A US company has avoided shipping costs by
building a PV panel factory in India to manufacture solar panels to sell domestically in
India. Therefore, PV panels exported from Japan to India would involve shipping costs,
and therefore undermine their price competitiveness. Moreover, because price is the
most important measure of judgment in India, people will compromise quality for lower
prices. Furthermore, when the purchasing price for solar power was determined in
Maharashtra, MERC announced a reference capital cost of 60.9 million rupees (≒100
million yen), whereas the envisaged cost for 2015 presented by the Procurement Price
Estimation Committee, which deliberates prices for Japan’s feed-in-tariff scheme was
290 million yen/MW34. The capital subsidy offered for PV power generation projects
under the federal government’s VGF program was also limited to a maximum of
approximately 16.4 million yen. The gap between Japanese and Indian markets being
difficult to close, India would be an extremely challenging playing field for companies
whose business is targeted at the Japanese market. Without regulations and policy
measures that offer benefits to panels featuring high-performance and durability, the
Indian market will be a very rocky environment for Japanese PV panels that ensure
high performance but are expensive.
②High efficiency air conditioners
1) Problems with the labelling scheme
Since India’s energy saving labelling scheme has been established with no
reference to load variation, 35 , the performance of inverter air conditioners that
Japanese air conditioner manufacturers take pride in do not serve as a competitive
feature in the Indian market. India is currently deliberating the setting up of Annual
Performance Factor (APF) standards that consider load variation, but given the
diversity of temperatures across India – especially the high temperatures experienced
in NMSEZ, many users keep the air conditioner on at high output without load
variation. Under these circumstances, inverter technology cannot give Japanese air
34 “The status of studies on recent developments in the introduction of renewable
energy and reviews of the feed-in-tariff scheme (Reference material 1)” distributed at
the Twentieth meeting of the Procurement Price Estimation Committee, Minister of
Economy, Trade and Industry. Envisaged capital costs were provided for power
generation facilities with installed capacities of 10kW.
http://www.meti.go.jp/committee/chotatsu_kakaku/pdf/020_01_00.pdf 35 Bureau of Energy Efficiency, “AC Notification/ Gazette, Schedule 3 - Room Air
Conditioners,” https://www.beestarlabel.com/Content/Files/Schedule3A-RAC9jun.pdf
109
conditioners a competitive advantage.
2) Consumer inclination towards prioritizing
It was pointed out in our interview surveys that many Indian users are indifferent
about energy efficiency and even the few users that are interested would prioritize the
cheapness of a product to its energy efficiency performance. Therefore, many users and
consumers are strongly inclined to select more inexpensive items regardless of how
inefficient they are.
③BEMS
1)Cost-related issues and credibility
Interviewed companies have pointed out that since wages are low in India, larger
cost-benefits could be expected by dispatching personnel to manage systems, instead of
installing expensive equipment to control air conditioners. It has also been indicated
that when presenting the need for control technologies, emphasis should be laid on
proving that energy savings have been generated, as customers can sometimes be
skeptical of energy efficiency data.
110
Chapter 6: Policy proposals related to JCM and Smart City in
India (Low carbon technologies, technical standards
regarding products and financial support measures etc.)
1. Tax incentives, financial support measures and comparisons of India with other
emerging economies
JCM and smart city projects require consideration of financial support measures, as the
introduction of environment-friendly facilities entail additional investment and cost. In this section,
we will discuss possible financial support measures for Navi Mumbai in Maharashtra state, India,
with reference to measures implemented in other Indian states and other emerging economies, such
as China, with high levels of economic growth.
1.1 Tax incentives and financial support measures in Navi Mumbai
a. A comparison of major incentive measures in India
In India, companies setting up industrial units in Special Economic Zones (SEZs), which were
launched in 2005 for the purpose of promoting exports and employment are entitled to various tax
incentives. National Manufacturing and Investment Zones (NMIZ), established later in 2013 for the
further growth of the manufacturing industry, aim to increase the share of manufacturing in GDP
from 16% to 25% under the National Manufacturing Policy (announced in 2011). The policy seeks
to attract manufacturing companies to NMIZs by focusing on support for the development of
logistics and other infrastructure, which is essential for the manufacturing industry. Other tax
incentives include those for companies located in sector-specific industrial parks, such as software
technology parks. Subsidies are also available for constructing basic infrastructure, such as water
supply and sewerage systems and electric power systems. Incentives are described in detail in Table
6.1.1.
111
Table 6.1.1 Major tax incentives in India
Coverage Description
(1) SEZ (Special Economic Zone) ・Exemption from corporate tax, import tariffs, commodity tax,
service tax, central sales tax (CST), value-added tax (VAT), etc.
・However, corporate tax exemption applies for a maximum of 15
years (first five years: 100%; succeeding five years: 50%;
additional five years, provided profits are re-invested 50%)
・Dividend distribution tax (DDT) and minimum alternate tax (MAT)
are imposed.
(2) NMIZ (National Manufacturing and
Investment Zones)
・No specification of tax incentives.
・However, by including a SEZ in an NMIZ, the NMIZ can enjoy the
benefits of the tax incentives applied to the SEZ
* SEZs are required to be 10-1,000ha; NMIZ are required to be
over 5,000ha
(3) EOU (Export Oriented Unit) ・Exemption from import tariffs, commodity tax, service tax, central
sales tax, value-added tax (VAT)
(4) Companies located inside the
following industrial parks:
a. Software technology park
b. Electronics hardware
technology park
c. Bio-technology park
Same as above
(5) Investment in infrastructure ・Infrastructure development projects for roads, water supply and
sewerage system, irrigation and waste treatment may receive
exemption from corporate taxes for ten consecutive years out of the
first twenty years since the launching of the project.
・For IT projects, corporate tax exemption applies for the first five
years; 30% exemption applies for the succeeding five years
・Other regulations: continually maintain a positive trade balance for
every five-year block counting from the year manufacturing
started.
(6) Investment in power generation and
power transmission and distribution
・Profits from the construction projects for power generation, power
transmission, and transmission and distribution networks, and
repairs and upgrades of power transmission and distribution lines
are exempted from taxation for ten consecutive years out of the
first fifteen years of the project.
・However, in order to be entitled to tax exemption for power
generation, power transmission and power transmission and
distribution lines, the project must be started before March 31,
2017.
b. Incentive measures in Navi Mumbai
The incentive measures applicable in Navi Mumbai are varied depending on whether the
establishment is located in or outside the Special Economic Zone (SEZ). In the SEZ (Navi Mumbai
SEZ), establishments enjoy the benefits of incentive measures of both the SEZ and the Maharashtra
Industry Policy 2013 (announced in January 2013). In areas outside the SEZ, only incentive
measures under the Maharashtra Industry Policy 2013 apply.
SEZ incentive measures entitle companies to exemption from taxation on various items,
112
regardless of the state of location (Table 6.1.2). For example, companies can receive a 100%
exemption on corporate tax for the first five years, a 50% exemption for the succeeding five years
and a 50% exemption for an additional five years provided that profits are re-invested. They are
exempted by 100% from central sales tax (CST), tariffs value-added tax (VAT), and entry tax. States
have different polices on consumption tax and stamp duty. Although the minimum alternate tax36
(MAT) and dividend distribution tax37
(DDT) were initially included among the tax exemptions, tax
imposition has been resumed since 2011.
Under the Maharashtra Industry Policy, companies receive exemption from some state taxes
and other incentives (Table 6.1.3). They are entitled to exemption from electricity consumption duty
and stamp duty (real estate purchases, lease agreements, etc.). Subsidies are available for installing
energy-saving and water-saving equipment, which are essential components of a smart city, and
refunds can be received on water and electric power audit costs. However, under the Maharashtra
state policy, the application of incentives is dependent on the degree of local development; and
therefore, electricity tariff discounts and business investment subsidies (partial tax refunds on annual
VAT and CST payments) are not applicable to Navi Mumbai, which is a relatively developed area.
As of January 2015, out of the 491 locations that have acquired approval, only 196 SEZs are
functional. This is due in part to a high corporate tax rate (41-43%) compared to other countries.
Although a 50% tax discount is granted for five years, the imposition of taxes is resumed in full from
the sixth year. A recent development is reduction of the corporate tax rate to 30% to 25% (for
domestic corporations with taxable income of less than 10 million rupees) over four years starting
from April 2016. This measure will be preceded by the March 2016 application of a 25% corporate
tax rate to newly established manufacturing companies in India. Another issue is the revision of the
Land Acquisition Act for the the promotion of infrastructure improvement. Revisions include
dropping the requirement to acquire the consent of land owners and exemption from social impact
surveys, which are not favorable changes to farmers, and thus decisions have been stalled. However,
there has been word that states with a high representation of the ruling party may implement
revisions prior to nationwide implementation.
A sugar tax is also expected to be introduced soon with the aim to prevent obesity and may
affect the expansion of multinational food and beverage companies.
In this manner, by setting up industrial units in an SEZ, companies will be able to enjoy the
benefits of incentive measures, but on the other hand will be exposed to restrictions they would
otherwise not have to follow. For example, products manufactured in a SEZ are subject to an export
obligation that requires companies to export at least 75% of products manufactured and limit
domestic sales below 25%. This provision may discourage overseas companies that seek to develop
36 MAT: imposed upon companies when 18.5% of accounting profit exceeds the corporate tax amount due 37 DDT: dividend distribution tax
113
a market in India. Considering the fact that land prices and wages are high in Navi Mumbai due to its
proximity to India’s largest city, Mumbai, a lowering of the cap on domestic sales will be required in
light of market trends. Companies expanding to non-SEZ areas will be granted relatively few tax
incentives: and therefore, more incentive measures are called for.
(*1) Imposed when 18.5% of accounting profit exceeds corporate tax amount. (*2) Levied on the movement of goods from one state to another.
1.2 A comparison of incentive measures in Navi Mumbai and other states
Outside of Maharashtra state, incentive measures are varied among different states, as state
policies can be determined independent of the the national SEZ policy. A comparison of incentive
measures implemented in the five states (Gujarat, Rajasthan, Uttar Pradesh, Tamil Nadu, and
Karnataka) with a large number of smart cities under the Smart City Mission as well as a large
number of industrial townships concentrated along the Delhi-Mumbai Industrial Corridor (DMIC) or
Chennai-Bengaluru Industrial Corridor (CBIC) and Navi Mumbai in Maharashtra state is performed
herein (Figures 6.1.1, 6.1.2 and 6.1.3).
Table 6.1.2 Incentive measures in SEZs in India
Table 6.1.3 Incentive measures under the Maharashtra Industry Policy
114
(companies)
Figure 6.1.1 Locations of Japanese companies in India by state
(number of main and branch offices, sales offices and factories)
Figure 6.1.2 GDP by state in India
Trillion rupees
115
Figure 6.1.3 India’s Infrastructure Improvement Scheme
The five states studied herein have individually introduced three types of incentive measures,
namely, business investment subsidies, capital investment subsidies, and preferential loans (Tables
6.1.4 and 6.1.5). A unique characteristic of these incentive measures is that they have been tailored to
project or company size or limited to specific areas.
From the viewpoint of developing a smart city, another feature is that the subsidies offered are
targeted at important elements for business expansion, such as core infrastructure38
construction, as
well as environmental measures, including the introduction of clean production facilities,
introduction of renewable energy, waste water treatment, and sewerage facilities.
Based on the abovementioned, incentive measures in NMSEZ would better serve the purposes
of business expansion and developing a smart city if investment subsidies and preferential loans
focused on energy-saving, energy creation and energy storage could be added.
38Roads, electric cables, communication infrastructure, water pipes, waste water treatment facilities,
sewage facilities, etc. in an industrial zone.
0 500km
Mumbai
Kolkata
Chennai
CochinKanyakumari
Hyderabad
Silchar
Ahmadabad
Porbandar
Srinagar
Bangalore
North-South–East-West Corridor（NSEW）
Southern India corridor
Chennai-Bengaluru Industrial Corridor
（CBIC）
Delhi
Golden Quadrilateral（GQ）
Delhi-Mumbai Industrial Corridor (DMIC)
Dedicated Freight Corridor（DFC）West Corridor
Dedicated Freight Corridor（DFC）East Corridor
India
116
Table 6.1.4 Comparison with incentive measures in other states in India
(*1) DMIC: Delhi-Mumbai Industrial Corridor; (*2) CBIC: Chennai-Bangalore Industrial Corridor (*3) Roads, electric cables, communication infrastructure, water pipes, waste water treatment facilities, sewage facilities, etc. in industrial zones.
※ NM：NMSEZ; MA: Maharashtra State; GU: Gujarat State; RA: Rajasthan State; UT: Uttar Pradesh State; TA: Tamil Nadu State;
Table 6.1.5 Descriptions of incentive measures in other states
117
KA: Karnataka state
1.3 A comparison of incentive measures of Navi Mumbai and those of other countries
This subsection will conduct a comparison of Indian incentive measures and similar measures
in China, Thailand and Indonesia, popular destinations of foreign investment, (Figure 6.1.4) in order
to discuss what kind of incentive measures should be considered in India.
(Source) Number of companies: Ministry of Industry, Trade and Industry. “Basic Survey on Overseas Business Operations 2013” GDP per capita; IMF “World Economy Outlook”
Figure 6.1.4 GDP per capita and comparison of the number of Japanese companies with local
business operations
(Reference) (in US dollars) U.S.: 4,367 Germany: 47,774 France: 44,332 Japan: 36,222
118
(*1) Incentive measures offered by the BOI are also available in Thai SEZs based on approval. (*2) Reduced tax rates, which are currently imposed as ordinary tax rates, apply (temporary legislation).
Indian SEZs currently offer incentive measures to a wide range of industries that have set up
business operations in areas designated by the government. However, in the other three countries
evaluated, the target of incentive measures has shifted from “specific target regions” to “national
target industries”, in accordance with their economic growth. Simultaneously, in areas where
domestic industries have increased their competiveness, incentive measures are being gradually
abandoned for foreign companies.
In addition, while India has only one SEZ program, with the exception of policy measures
focused on specific sectors and special zones established by private companies, the three countries
evaluated have various “promoted businesses” and “special zones” which are categorized by
industry or purpose. India also has policies to promote businesses in specific industries which have
been implemented at the state level. A recent development is the nationwide “Make in India”
campaign announced in 2014 that set up special zones for the manufacturing industry. This implies
that India is shifting its policy focus to encouraging the development of companies of specific
industries. Therefore, if India could continue pursuing such trends and establish SEZs for more
explicitly defined industries or purposes compared to those in other countries, it would be able to
effectively encourage foreign companies to bring business operations to India.
Table 6.1.6 International comparison of incentive measures
119
2. A study of technological standards for Navi Mumbai and India
As studied in Chapters 3 and 5, there are currently no barriers regarding technological
standards to adopting low carbon technologies and products in a JCM project.
Although the diffusion of an inverter air conditioner requires an evaluation of efficiency levels
using the Seasonal Performance Factor, India currently adopts the Energy Efficiency Ratio (EER).
However, India has been deliberating the adoption of the SPF as an efficiency measure; and
therefore, the EER may no longer hinder the diffusion of inverter air conditioners.
120
(Attached Sheet 6-1-1)
Major Taxes Imposed on Foreign Companies in India (National Taxes) Categ
ory
Tax Items subject to tax Jurisd
iction Normal Tax Rate *1 rupee= approx. 2 yen
Special Economic Zone (SEZ)
Companies involved in development of SEZ Companies located in SEZ
Direct T
ax
Corporate Income Taxes Income (applicable from FY
2015)
Cen
tral Go
vern
men
t
43.26% (on income of 100 million rupees or more)
42.024% (on income of 10 million or more and less than
100 million rupees)
41.20% (on income of less than 10 million rupees)
• For 10 consecutive years out of 15 years of SEZ
development: 100% exemption from tax
(Profits gained through the development of SEZ
are exemption from tax)
• For the first 5 years after the initiation of
manufacturing activities or service provision: 100%
exemption from tax, and 5 years thereafter: 50％
exemption from tax.
• An additional 5 years: 50% exemption from tax on
condition that profits will be reinvested.
MAT (Minimum Alternate
Tax)
Income (applicable when
18.5% of profit exceeds
Corporate Tax amount)
20.0077% (on income of 100 million rupees or more)
19.4361% (on income of 10 million or more and less than
100 million rupees)
19.055% (on income of less than 10 million rupees)
Same as on the left Same as on the left
DDT (Dividend Distribution Tax) Dividend
15% (Effective tax rate 16.995%)
*Receivers are 100% exemption from tax
*Tax rate is reduced to 10% under bilateral tax treaty
Same as on the left Same as on the left
Indirect T
ax
Excise tax Manufacturing of goods 12.5%
100% exemption from tax
*Goods procured outside SEZs are also exemption
from tax. Same as on the left
CST (Central Sales Tax) Inter-state sales 2% (Note 1) 100% exemption from tax Same as on the left
Tariff (General tariff rate:
Total) Imported / Exported goods 29.44%
100% exemption from tax Same as on the left
BCD: Basic Custom Duty 10%
AD: Additional Duty
*CVD (CVD: Countervailing Duty) after deducting
Excise Duty
12.5%
*Imported parts and raw materials that are integrated in
products during manufacturing process are subject to tax
reduction
Education CESS 3%
ADC: Additional Duty of Customs or SAD: Special
Additional Duty)
4%
**Imported parts and raw materials that are integrated in
products during manufacturing process are subject to tax
reduction
Service Tax / GST ( Goods and
Service Tax) Special services
14%
*Other than the services in negative list approach (17
activities: ooperations associated with manufacturing
activities and electric power transmission and
distribution.
100% exemption from tax
Same as on the left
Remarks
Note 1:
The Neemrana and Ghiloth industrial areas in
Rajasthan State offer reduction of CST (Central Sales
Tax).
(See Attached Sheet 6-2-4 "State tax <3> Rajasthan
State"
[[SEZ Eligibility]
*Sector-specific SEZ
• Minimum investment amount :2.5 billion rupees or
net assets of more than 500 million rupees.
• Ultra-minimal site area: 100 ha (For businesses
specialized purely in IT, 10 ha)
*Multi-purpose SEZ
• Minimum investment amount :10 billion rupees or
more than net asset 2.5 billion rupees
• Minimum site area: 1,000 ha ~ up to 5,000 ha
(Some states have individually established their
own criteria.)
[SEZ Eligibility]
• One set of period is 5 years after initiation of
manufacturing activities. Companies need to keep the
import and export balance between the periods herein
after continuously (Not subject to minimum export
obligations).
• Companies are allowed to sell their products within
India by paying general import tariff (DTA).
121
(Attached Sheet 6-1-2 <1>)
Major Taxes Imposed on Foreign Companies in India (State Taxes: <1> Maharashtra State )
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal tax rate *1 rupee= approx. 2 yen Special Economic Zone (SEZ)
Large enterprises Small and medium sized enterprises Companies involved in
development of SEZ
Companies located
in SEZ
Indirect T
ax
State VAT (Value
Added Tax) Sales within the state
State G
overn
men
t
Basic tax rate 12.5%＋Different tax rates are set for each goods.(1% ~ 20%)
*Export goods :100% exemption from tax
*Purchase of parts and raw materials by 100% EOU (Export Oriented Unit): 100% exemption from tax
*Purchases of exported products and parts and raw materials : Fully refunded
*Resale products: Only the value added (premium) is subject to tax
100% exemption from
tax Same as on the left
Entry Tax
Goods delivered from
other states for use,
consumption or sales
5% 100% exemption from
tax Same as on the left
Octroi
(Note 1)
Goods delivered into the
state for use, consumption
or sales for the local
government or the special
areas.
* Until 2013: 0.1% ~ 7% ad valorem (Octroi was abolished in December 2013)
* From 2014: Introduction of LBT (Local Body Tax) Average 4% (0.1 ~ 8%)
* LBT was determined to be abolished in August 2015; an increase in VAT rate from 2016 is under
review.
100% exemption from
tax Same as on the left
Stamp Duty
Agreements, etc.
• 1,000 rupees is exemption for each 500,000 rupees of authorized capital (Up to 500,000 rupees)
100% exemption from tax
(until March 2006) Same as on the left *Lease agreement and land acquisition of IT and biotechnology-related companies:
100% exemption from tax (For the Group A and B zones, only companies in IT parks and Bio-parks are
subject to exemption.)
Electricity Duty Electric power used
15% of the total amount paid
Same as on the left Same as on the left *Companies specialized in export, IT and
biotechnology-related corporations:
100％ exemption from tax
(Limited to Group A and B zones)
*Electricity cost subsidy:
0.5 ~ 1 rupees per 1 unit (kWh) (3 years)
(Other than Group A zone)
Others － －
• Gasoline tax, Luxury
tax and Entertainment tax:
100% exemption from tax
Same as on the left
Oth
er incen
tive m
easures
Equipment investment
subsidy
Installation subsidy • Installation of equipment for water saving and energy saving : 50% of the cost is subsidized (up to
500,000 rupees) Same as on the left Same as on the left
Other reimbursement • Audit fees: 75% of audit fees is refunded (For water, up to 100,000 rupees, for energy, up to 200,000
rupees is refunded) Same as on the left Same as on the left
Incentives to invite industries
• 60 ~ 100% of the total amount of VAT and CST
paid is refunded.
*For the food processing industry, an additional 10%
is refunded for one year. (Zones other than Group A
and B)
• 20 ~ 100% of the total amount of VAT and CST
paid is refunded. *For the food processing industry,
an additional 10% is refunded for one year.
(Zones other than Group A and B)
－ －
Preferential loans Loan interest rate subsidy － *5% of interest is subsidized (within the limit of the
electric bills) (Zones other than Group A) Same as on the left Same as on the left
Various registration fees － － 100% exemption from tax
(Until March, 2006) Same as on the left
*Note 1: Introduced to the 4 states: Maharashtra, Gujarat, Punjab and Jmmu-Kashmir *Group A• B: Development areas under the State Industrial Policy "PSI (Package Scheme of Incentives) - 2013 "
122
(Attached Sheet 6-1-2 <2>)
A List of Development Areas under Maharashtra State Industrial Policy "PSI (Package Scheme of Incentives) - 2013" (1/2)
Administration
location District
Group A Group B Group C Group D Group D+
Industrial development areas Development areas smaller than
those in the Group A
Development areas smaller than
those in the Group B
Small development areas not
included in Group A, B and C
The smallest development areas not
included in A, B, C and D
KONKAN
Greater Mumbai Greater Mumbai
Thane
Thane / Vasai / Palghar / Kalyan / Ulhasnagar / Ambernath
Dahanu / Murbad Bhivandi / Shahapur Jawhar / Mokhada / Talasari / Wada / Vikramgad
Raigad
Alibag (Note 1) / Uran / Panvel / Karjat (Note 1) / Khalapur / Pen (Note 1) / Roha
Alibag (Note 2) / Pen (Note 2) / Sudhagad
Karjat (Note 2) / Mahad / Mangaon / Murud
Shrivardhan Poladpur / Mhasala / Tala
Ratnagiri Ratnagiri
/ Chiplun Khed Guhagar / Dapoli / Lanja / Mandangad
/ Rajapur / Sangameshwar
Sindhudurg Vengurla Kankavli / Kudal / Sawantwadi / Malvan
/ Deogad / Vaibhavwadi / Doda Marg
PUNE
Pune
Pune City / Maval / Haveli (Note 1) / Bhor (Note 1) / Daund (Note 1) / Shirur (Note 1) / Khed (Note 1) / Mulshi (Note 1)
Haveli (Note 2) / Mulshi (Note 2) Shirur (Note 2) / Daund (Note 2) / Bhor (Note 2) / Khed (Note 2) / Indapur / Baramati / Purandar
Ambegaon / Junnar Velhe
Solapur
Solapur (North ) / Pandharpur / Malshiras
Barshi / Akkalkot / Solapur (South) / Mohol / Mangalwedhe / Sangole / Karmala / Madha
Satara Satara / Khandala / Koregaon / Phaltan
/ Khatav / Karad / Mahabaleshwar Wai / Man / Patan / Jaoli
Sangli
Miraj Tasgaon / Khanapur / Atapadi / Jat / KavatheMahaankal / Walwa / Shirala / Kadegaon / Palus
Kolhapur Karveer / Panhala / Hatkanangale
/ Shirol Kagal / Gadhinglaj / Chandgad / Ajra / Bhudargad / Radhanagari / Bavada / Shahuwadi
NASIK
Nasik
Nasik Niphad / Sinnar Dindori / Yeola / Igatpuri Peth / Surgana / Kalwan / Baglan / Chandwad / Nandgaon / Trimbakeshwar / Deola Malegaon
Ahmednagar
Nagar / Rahuri / Shrirampur / Newasa / Karjat / Shrigonda / Akola / Sangamner / Kopergaon / Rahata
Shevgaon / Pathardi / Jamkhed / Parner
Dhule Dhule Sakri / Shirpur / Shindkheda
Nandurbar
Nandurbar / Nawapur / Shahade / Talode / Akrani / Akkalkuva
Jalgaon
Yawal / Chalisgaon / Amalner / Dharangaon
Chopada / Raver / Edalabad / Bhusawal / Jamner / Pachora / Bhadgaon / Parola / Erandol / Bodwad
*Note 1: Inside the MMR (Mumbai Metropolitan Region) *Note 2: Outside of the MMR (Mumbai Metropolitan Region)
*MMR: the region consists of 8 local governments (Greater Mumbai, Thane, Kalyan-Dombivali, Navi Mumbai, Ulhasnagar, Bhiwandi- Nizamapur, Vasai-Virar and Mira-Bhayandar), 9 cities, towns and villages (Ambarnath,
Kulgaon-Badalapur, Matheran, Karjat, Panvel, Khopoli, Pen, Uran, Alibaug) and more than 1000 cities, towns and villages in Thane and Raigad.
123
(Attached Sheet 6-1-2 <3> )
A List of Development Areas under Maharashtra State Industrial Policy "Package Scheme of Incentives - 2013" (2/2)
Administration
location District
Group A Group B Group C Group D Group D+
Industrial development areas Development areas smaller than
those in the Group A Development areas smaller than
those in the Group B Small development areas not included in Group A, B and C
The smallest development areas not included in A, B, C and D
AURANGABAD
Aurangabad Aurangabad Khuldabad / Kannad / Soegaon / Sillod
/ Paithan / Gangapur / Vaijapur / Phulambri
Jalna Jalna / Ambad / Jafferabad / Partur
/ Bhokardan / Badnapur / Ghangsavangi / Mantha
Beed Beed / Georai / Majalgaon / Ambejogai
/ Kaij / Patoda / Ashti / Dharur / Parli / Wadavani / Shirur Kasar
Osmanabad Osmanabad / Kalamb / Omerga / Tuljapur
/ Paranda / Bhum / Washi / Lohara
Parbhani Parbhani / Jintur / Selu / Gangakhed / Pathri
/ Palam / Purna / Manawat / Sonpeth
Hingoli There are no industrial development zones that belong to any of the Groups
Latur Latur / Ahmedpur / Udgir / Nilanga / Ausa
/ Chakur / Deoni / Shirur-Anantpal / Jalkot / Renapur
Nanded
Nanded / Bhokar / Hadgaon / Kinwat / Biloli / Deglur / Mukhed / Kandhar / Loha / Mudkhed / Ardhapur / Naigaon / Dharmabad / Himayatnagar / Umari / Mahur
AMARAVATI
Amravati
Amravati / Achalpur / Bhatkuli
/ Nandgaon- Khandeshwar
/ Chandur Bazar / Morshi / Warud
/ Chandur Rly. / Teosa / Daryapur
/ Anjangaon -Surji / Chikhaldara.
/ Dharni / Dhamangaon- Rly.
Akola Akola / Barshitakli / Akot / Telhara
/ Balapur / Patur / Murtijapur
Washim Washim / Malegoan / Risod
/ Mangrulrpir / Manora / Karanja
Buldhana
Buldhana / Chikhali / Shegaon
/ DeulgaonRaja / Malkapur / Motala
/ Nandura / Jalgaon Jamod / Sangrampur
/ Khamgaon / Mehkar
/ Sindakhed –Raja / Lonar
Yavatmal
Yavatmal / Babhulgaon / Kalamb / Kelapur
/ Ralegaon / Ghatanji / Wani / Maregaon
/ Pusad / Mahagaon / Umarkhed / Darwaha
/ Ner / Digras / Arni / Zari-Jamdi
NAGPUR
Nagpur
Nagpur City Nagpur (R) / Kamptee / Hingana / Katol
/ Narkhed / Savner / Kalmeshwar / Ramtek
/ Parseoni / Mauda / Umred / Bhiwapur / Kuhi
Bhandara
Bhandara / Pauni / Tumsar / Mohadi
/ Sakoli / Lakhandur / Lakhani
Gondia
Gondia / Goregaon / Tirora
/ Arjuni- Morgaon / Deori / Sadakarjuni
/ Amgaon / Salekasa
Wardha Wardha / Deoli / Seloo / Arvi / Karanja
/ Ashti / Hinganghat / Samudrapur
Chandrapur
Chandrapur / Gondpipri / Mul / Warora
/ Chimur / Bhadravati / Brahmapuri
/ Sindewahi / Nagbhid / Rajura / Korpana
/ Sawali / Pobhurna / Ballarpur / Jiwati
Gadchiroli
There are no industrial development zones that belong to any of the Groups
124
Major Taxes Imposed on Foreign Companies in India (State tax: <2> Gujarat State) (Attached Sheet 6-2-3)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate *1 rupee= approx. 2 yen Special Economic Zone (SEZ)
MSMEs (Micro, Small and Medium-sized Enterprises) Companies involved in
development of SEZ
Companies
located in
SEZ
Indirect T
ax
VAT
(Value Added
Tax)
Sales within the state
State G
overn
men
t
Basic tax rate 12.5%＋different tax rates are set for each goods (0% ~ 38%) *Export goods :100% exemption from tax *Purchases of parts and raw materials by 100% EOUs (Export Oriented Unit):100% exemption from tax *Purchases of export goods, purchases of parts and raw material thereof : Fully refunded *Resell products: Only the value added (premium) is subject to tax
100% exemption from tax
Entry Tax Goods delivered into the state from
other states for use, consumption or
sales
Limited to 7 items, different tax rates are set for each item (6% ~ 21.6%)
1)Automobile, motorcycle, etc: 12%; 2)Cement: 8%; 3)Marble, granite stone: 12%; 4)Kota stone: 6%;
5)Naphtha: 16%; 6)Light oil: 8%; 7)High speed diesel oil: 21.6% 100% exemption from tax
Octroi (*1)
Goods delivered into the state for
use, consumption or sales for the
local government or the special
areas.
Different tax rates are set for each good (4% ~ 8%)
(Octroi was abolished in November 2015) 100% exemption from tax
Stamp
Duty Agreements, etc
• Contract amount less than 100 million rupees: 0.25 rupees for each 100 rupees in contract (Upper limit is 100,000 rupees)
• Contract amount 100 million rupees and over: 0.5 rupees for each 100 rupees in contract (Upper limit is 300,000 rupees)
• Transfer and mortgage of land
• Loan agreements and credit agreement
: 100% exemption from tax
Electricity
Duty Electric power used 20% of the total amount paid Same as on the left
Others －
• Contract work tax, Luxury tax: 100% exemption from tax
(7 years)
• Entertainment tax: 50% exemption(7 years)
Oth
er preferen
tial measu
res
Preferential
loans
Loans 1) In and out of the GIDC development area • Inside the zone: 10% of the loan interest from Financial institution / bank is subsidized (up to 1.5 million rupees) • Outside the zone: 15% of the loan interest from Financial institution / bank is subsidized (up to 2.5 million rupees)
Same as on the left
Interest rate subsidy
1) In and out of the DIDC development area • Inside the area: 5% of the loan interest is subsidized (up to 2.5 million rupees annually) (5 years) • Outside the area: 7% of the loan interest is subsidized (up to 3 million rupees annually) (5 years)
2) Target industries: • Newly established micro, small and medium-sized enterprises in the service sector: 5% of loan interest is subsidized
(Limited to loans to purchase equipment to be used within the state) (Up to 2.5 million rupees annually) (5 years)
• Manufacturers: Loans for investment of up to 1 billion rupees, (Micro, Small and Medium-sized Enterprises) 7% of the loan interest is subsidized (Up to 2.5 million rupees annually) (5
years) (Large enterprises) 2% of the loan interest is subsidized (up to 5 million rupees annually) (5 years)
Same as on the left
Equipment
investment
subsidy
Infrastructure development
subsidy
• New GIDC (*2)development area: manufacturers inside the area: 50% of expenses incurred on core
infrastructure development is subsidized. (up to 200 million rupees) Same as on the left
Environment measure subsidy
(Targets only Micro, Small and
Medium sized manufacturers)
1) Costs related to environmental measures • Installation of cleaner production technology: 35% of the cost is subsidized (Large projects: 10%) (up to 3.5 million rupees) • Environmental management projects: 25% of the cost is subsidized (Large projects 10%) (up to 3.5 million rupees)
2) Costs related to environmental activities • Installation of environmental systems: 50％ of the cost, or 1 million rupees, whichever is lesser, is subsidized.(once for one
company) • Purchases of systems related to occupational safety and health (joint use by a minimum of 10 companies):
35% of the cost is subsidized (Up to 3.5 million rupees / 1 Group) • Waste water recovery equipment cost taking advantage of Zero Liquid Discharge (ZLD) certified by GPCB (*3) (Recovery
ratio at least 50%): 35% of the cost , or 3.5 million rupees, whichever is lesser, is subsidized. • Installation of online continuous exhaust gas monitoring systems or drainage water quality monitoring systems:
25% of the cost or 500,000 rupees, whichever is lesser, is subsidized. • Industrial building with floor area of 2,000 m2 that has acquired green rating (IGBC*4, LEED*5, GRIHA*6):
50% of consultation fees or 250,000 rupees, whichever is lesser, is subsidized. 3) Costs related to environmental audits
• Periodical environmental audits (with the exception ofxcept for those required by the state, acts & rules, or court order): 75% of the audit fee or 50,000 rupees per audit, whichever is lesser, is subsidized.
Same as on the left
Various registration fees • Purchase of land by companies involved in development of SEZ in the GIDC promotional areas, or original land purchaser:
100% exemption from tax (Limited to the manufacturing industry)
• Transfer of land, Loan agreements: 100% exemption
from tax
*1 Introduced to the 4 states: Maharashtra, Gujarat, Punjab, Jmmu-Kashmir *2 GIDC (Gujarat Industrial Development Corporation) *3 GPCB (Gujarat Pollution Control Board) *4 IGBC (Indian Green Building Council) *5 LEED (Leadership in Energy and Environmental Design) *6 GRIHA (Green Rating for Integrated Habitat Assessment)
125
(Attached Sheet 6-1-4)
Major Taxes Imposed on Foreign Companies in India (State Tax: <3> Rajasthan State)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate *1 rupee= approx. 2 yen
Special Economic Zone (SEZ)
Companies involved in development of SEZ
Companies located in SEZ
Indirect T
ax
CST (Central
Sales Tax) Sales to other states
Cen
tral
Govern
men
t
2% (As usual)
*Neemrana Industrial Area: Tax discount to 0.25% (Sale of lots begun in 2007, tax discounts are continued as of 2015)
*Ghiloth Industrial area: Tax discount to 0.25% (Sale of lots begun in April 2015)
100% exemption from
tax Same as on the left
State VAT (Value
Added Tax)
Sales within the
state State G
overn
men
t
Basic tax rate 12.5%＋Different tax rates is set for each goods (1% ~ 65%)
*Exported goods : 100% exemption from tax
*Purchases of parts and raw materials by 100% EOUs (Export Oriented Unit) : 100% exemption from tax
*Purchases of exported products, purchase of parts and raw materials thereof: Fully refunded
*Resale products: Only the value added (premium) is subject to tax
100% exemption from
tax Same as on the left
Entry Tax
Goods delivered into the
state from other states for
use, consumption or sales
Different tax rates are set for each good. (0.25% ~ 65%)
*Capital goods: 50% tax discount by 50% (limited to the electronic system design and manufacturing industry) (Note 1)
100% exemption from
tax Same as on the left
Stamp Duty Agreements, etc. 10%
*Land purchase and rent: 50% tax discount (Note 2)
100% exemption from tax
(only within RIICO*3 SEZ)) Same as on the left
Electricity Duty Electric power used 40 paisa per 1 unit (kWh) (1 paisa = 100 rupees)
*50% tax discount (7 years) (Note 2) (As usual)
50% exemption from
tax (7 years)
Oth
er incen
tive m
easures
Management fund subsidy
• The total amount of VAT and CST is offset by a fixed rate for 10 years (first 4 years: 75%; 3 years thereafter: 60%, final 3
years: 50%)
(Limited to the electronic system design and manufacturing industry) (Note 1)
• 30% of the total amount of VAT and CST paid is refunded (7 years) (Note 2)
*Until 2013: 25% of wages is offset against VAT (limited to half of the VAT paid)
－ －
Employment incentive
• Wages are offset against VAT and CST. Upper limit: 10% of the total amount of VAT and CST paid. (10 years)
(Limited to the electronic system design and manufacturing industry) (Note 1)
• A subsidy is offered. Upper limit: 20% of the total amount of VAT and CST paid. (7 years) (Note 2)
－ －
Land acquisition subsidy
*Neemrana Industrial Area: (Land acquisition: 99-year lease)
[Policies as of 2015]
• Lot sales price: 3,000 rupees /m2
• No subsidy (due to the occupancy rate which is over 80%)
[Policies as of 2014]
• Lot sales price: 3,000 rupees /m2
• 2% discount upon payment in full in advance
• For lots 20,000 m2 or larger in area size, 10% of the amount paid is refunded
when the initial investment amount is 500 million rupees or more .
[Policies as of 2012]
• Lot sales price : 2,000 rupees /m2
• For lots 10,000 m2 or larger in area size, 10% of the land price is refunded,
thereafter an additional 0.2% is refunded for each 1,000 m2 with the limit of 25%.
• For lots 20,000 m2 or larger in area size, 10% of the amount paid is refunded
when the initial investment amount is 500 million rupees or more .
[Policies as of 2006]
• Lot sales price: 970 rupees / m2
• For lots 20,000 m2 or larger in area size, 10% of the amount paid is refunded
when the initial investment amount is 500 million rupees or more .
*Ghiloth Industrial Area: (Land
acquisition: 99-year lease)
[Policies as of 2015]
• Lot sales price: 3,500 rupees /m2
• A certain ratio of the total amount
paid for the land is refunded.
(10%: 3 years after the initiation of
manufacturing activities:, 15% after 5
years) － －
*Note 1: ESDM (Electronics System Design and Manufacturing) policy. Note 2: Rajasthan State Investment Promotion Scheme 2014
*Note 3: RIICO (Rajasthan State Industrial Development & Investment Corporation Limited)
126
(Attached Sheet 6-1-5)
Major Taxes Imposed On Foreign Companies Advanced Into India (State Tax: <4> Uttar Pradesh State)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate
Special Economic Zone (SEZ)
Companies involved in
development of SEZ
Companies located in
SEZ
Indirect T
ax
State VAT (Value
Added Tax) Sales within the state
State G
overn
men
t
Basic tax rate 12.5%＋Different tax rates are set for each good.(1% ~ 32.5%)
*Export goods :100% exemption from tax
*Purchases of parts and raw materials by 100% EOUs (Export Oriented Unit):100% exemption from tax
*Purchases of export products and parts and raw materials thereof: Fully refunded.
*Resell products: Only the value added (premium) is subject to tax
100% exemption from tax Same as on the left
Entry Tax
Goods delivered into the state
from other states for use,
consumption or sales
Different tax rates are set for each goods. (0% to 5%) 100% exemption from tax Same as on the left
Stamp Duty Agreements, etc.
8%
*Purchases or lease of land, warehouse, buildings for own use from the Central or the State Government or government related entities are
entitled to tax exemption or reduction as below.
• Companies established in eastern and central part of the state and Bundelkhand district: 100% exemption from tax
• Companies related to IT and biotechnology: 100% exemption from tax
• Purchases of land by private companies (except for public-private partnership aiming for infrastructure development: 100% exemption
from tax
• Companies other than the above: 75% exemption from tax
*Purchases of land from a private company are entitled to exemption or reduction as below.
• Companies established in eastern and central part of the state and Bundelkhand district: 100% exemption from tax
• Companies related to IT and biotechnology : 100% exemption from tax
• Purchases of land by private companies (except for public-private partnership aiming for infrastructure development: 100% exemption
from tax
• Companies other than the above: 50% exemption from tax
*Private companies involved in the development of the Specified Industrial Zones (*Note 1): 25% refund (A Company must complete 50%
or more of the development within three years from the date of purchase.)
100% exemption from tax
(Only once at the beginning)
Same as on the left
Electricity Duty Electric power used
5% of the total amount paid
*Newly established industrial companies: 100% exemption from tax (10 years)
*Pioneer industry: 100% exemption from tax (15 years)
*Self-consumed amount of power that was generated by in-house power generation equipment: 100% exemption from tax
100% exemption from tax
(10 years) Same as on the left
Oth
er preferen
tial measu
res
Preferential loans
No interest loan
*Poorvanchal, Madhyanchal, Bundelkhand districts
• Newly established industrial companies, food processing industry, etc (Fixed capital investment amount 50 million rupees or more):
the total amount of VAT and CST paid, or 10% of the annual sales amount, whichever is lesser, is refunded (Up to 10 years)
* Districts other than the above
• Newly established industrial companies (Fixed capital investment amount 125 million rupees or more):
The total amount of VAT and CST paid, or 10% of the annual sales amount, whichever is less, is refunded. (Up to 10 years)
－ －
Loan interest subsidy
1) Equipment acquisition
*Poorvanchal, Madhyanchal and Bundelkhand districts
• Newly established industrial companies: 5% of the interest (Up to 5 million rupees) (Up to 5 years)
• Newly established textile industry, such as spinning or clothing: 5% of the interest is refunded (Up to 10 million rupees) (Up to 5 years)
*Districts other than the above
• Newly established textile industry, such as spinning or clothing: 5% of the interest is refunded (Up to 5 million rupees) (Up to 5 years)
2) Infrastructure development
*Poorvanchal, Madhyanchal and Bundelkhand districts
• Development of in-house infrastructures by newly established industrial companies (Roads, water supply and sewerage systems, etc.):
5% of the interest is refunded (Up to 10 million rupees) (Up to 5 years)
3) Others
• Experiment equipments for research, quality improvement, etc: 5% of the interest is refunded (10 million rupees) (Up to 5 years)
Same as on the left Same as on the left
Same as on the left Same as on the left
Same as on the left Same as on the left
Mandi fees (Fees for distribution and export of agricultural products)
• Newly established food processing industry (Only when 50 million rupees or more has been invested in 5 years)
Raw material purchase cost :100% exemption from tax (5 years) Same as on the left Same as on the left
Various registration fees － 100% exemption from tax
(Only once in the beginning) Same as on the left
*Note 1: Biotechnology Park, IT Park, Pharmaceutical Park, daily, etc
127
Major Taxes Imposed On Foreign Companies Advanced Into India (State Tax: <5>Tamil Nadu State) (Attached Sheet 6-1-6 <1>)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate *1 rupee= approx. 2 yen
Special Economic Zone (SEZ)
Companies involved in development of SEZ
Companies located in SEZ
Indirect T
ax
VAT (Value Added
Tax) Sales within the state
State G
overn
men
t
Basic tax rate 12.5%＋Different tax rates are set for each good.(1% ~ 4%)
*Export goods :100% exemption from tax
*Purchases of parts and raw material by 100% EOUs (Export Oriented Unit): 100% exemption from tax
*Purchases of export products and parts and raw materials thereof : Fully refunded
*Resell products: Only the value added (premium) is subject to tax
100% exemption from tax Same as on the left
Entry Tax Goods delivered into the state
from other states for use,
consumption or sales Different tax rates are set for each goods. (4% to 30%) 100% exemption from tax Same as on the left
Stamp Duty Agreements, etc.
8%
*Purchase and lease of land (Only land in the A and B zones specified by the state and the SIPCOT (Note 1) Industrial Zone):
• Normally: 50% reduction
• Ultra Mega Projects: 100% exemption from tax
100% exemption from tax
(Limited on land deals) Same as on the left
Electricity Duty Electric power used
10 paisa per 1 unit (kWh) (1 paisa = 100 rupees)
*Manufactures that are newly established or expanded its businesses (Only in the A and B zones specified by the state)
• Electric power purchased from TANGEDCO (Note 2) and generated in-house:
100% exemption from tax (It is applied between 2 and 5 years depending on the fixed asset investment amount and the number of direct employees)
(As usual) Same as on the left
Oth
er incen
tive m
easures (*
No
te 4)
Business investment subsidy
1) Subsidies for zones specified by the state
• A and B zones
Manufactures that are newly established or expanded its businesses:
Subsidy amount is ranging between 3 million and 22.5 million rupees (in accordance with the fixed asset investment amount and the number of
direct employees).
*In the SIPCOT Industrial Zones: 150% of the subsidy granted to the A and B zones as stated above
*However, outside of SIPCOT Industrial Zones in the B zone: 110% of the subsidy granted to the A and B zones as stated above
*Outside SIPCOT Industrial Zones in the C zone: 125% of the subsidy granted to A and B zones as stated above
• B and C zones
In the event where the number of employment doubled against the scheduled number of employment:
(a)10% of the total amount of VAT and CST paid is subsidized (EFA<*Note 3>Within the limit of the investment amount)
(b)Provision of loans to investors: (Within the limit of EFA investment amount)
2) Subsidy in accordance with the project size
• Mega size: A total amount of VAT and CST on net sales (Up to 70% during business expansion period)
• Super mega size:
(a) A total amount of VAT and CST on net sales (Up to 90% during business expansion period) is refunded.
(b)VAT on capital goods is fully refunded (Within the limit of the total amount stated above)
• Ultra mega size:
(a) A total amount of VAT and CST on net sales (Up to 80% during business expansion period) is refunded.
(b)VAT on capital goods and contractor costs: 100% refunded (With the limit of the total amount stated above)
(c)VAT on procurement: 100% refunded (For the period as long as the VAT and CST on the total sales is refunded or soft loan period)
Same as on the left
Equipment investment subsidy • Installation of waste water treatment plants (ETP: Effluent Treatment Plant): 3 million rupees or 25% of the cost, whichever is lesser, is
subsidized.
• Installation of hazardous waste material storage and treatment facility (HWTSDF): same as above
Same as on the left
Preferential loans Soft loan
In accordance with the project size
• Mega size: Up to 80% of EFA investment amount (70% during business expansion period) (10 years)
• Super mega size (A): Up to 90% of EFA investment amount (80% during business expansion period)
(For 12 years＋a 6 year-extension is granted if the business expansion has not completed)
• Super mega size (B): Up to 100% of EFA investment amount (80% during business expansion period)
(For 14 years＋a 7 year-extension is granted if the business expansion has not completed)
• Ultra mega size: Within the limit of EFA investment amount (80% during business expansion period)
(For 16 years or when the accumulated amount of VAT and CST on the total products manufactured reaches the EFA
investment amount, whichever is earlier.)
Same as on the left
Various registration fees － 100% exemption from tax
(Limited to land deals) Same as on the left
*Note 1: SIPCOT (The State Industries Promotion Corporation of Tamil Nadu Limited *Note 2: TANGEDCO (Tamil Nadu Generation and Distribution Corporation Limited *Note 3: EFA (Eligible Fixed Asset)；An asset that necessarily takes a substantial period of time to get ready for its intended use or sale, including land, buildings, factories, manufacturing machinery, power generators, electric equipment, etc *Note 4: Details of preferential measures in the southern part of the state are omitted from this listing.
128
(Attached Sheet 6-1-6 <2> )
District and Project Classification Under the "Tamil Nadu Industrial Policy 2014"
Zone Number of
districts Name of district
A 3 Chennai, Tiruvallur, Kancheepuram
B 20 Other an Zone A and Zone C
C 9 Southern districts:
Madurai, Theni, Dindigul, Sivagangai, Ramanathapuram, Virudhunagar, Tirunelveli, Thoothukudi, Kanniyakumari
2) Project Sizes
Project size Investment Employment conditions
Number of employees Employment period
Mega Project A 500 million ~ 1.5 billion rupees 300
3 years B 3.5 billion ~ 10 billion rupees 200
Super mega project
A-A 15 billion ~ 30 billion rupees 400 5 years
A-B 10 billion rupees ~ 20 billion rupees 300
B-A 30 billion rupees ~ 50 billion rupees 600 6 years
B-B 20 billion rupees ~ 40 billion rupees 500
Ultra mega project A 50 billion rupees or more 700
7 years B 40 billion rupees or more 600
129
Major Taxes Imposed on Foreign Companies in India (State Tax: <6> Karnataka State) (Attached Sheet 6-1-7 <1>)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate *1 rupee= approx. 2 yen
Special Economic Zone (SEZ)
Companies involved in development of
SEZ Companies located in SEZ
Indirect T
ax
VAT (Value Added Tax) Sales within the state
State G
overn
men
t
Basic tax rate 13.5%＋Different tax rates are set for each good.(1% ~ 20%)
*Exported goods :100% exemption from tax
*Purchases of parts and raw materials by 100% EOUs (Export Oriented Unit): 100% exemption from tax
*Purchases of export products and parts and raw materials thereof : Fully refunded
*Resell products: Only the value added (premium) is subject to tax
100% exemption from tax Same as on the left
Entry Tax
Goods delivered into
the state from other
states for use,
consumption or sales
• Equipment and capital goods: 100% exemption from tax
*Large enterprises (3 years), Mega enterprises (3 years), Ultra mega enterprises (5 years), Super mega enterprises (5 years)
• Raw materials, input capital, parts, consumables (excluding petroleum products): 100% exemption from tax
*Large enterprises (5 years), *Mega enterprises (6 years), Ultra mega enterprises (7 years), Super mega enterprises (8 years)
*However, Ultra mega enterprises and Super mega enterprises in the Manufacturing Industry (*Note 1): 9 years
100% exemption from tax Same as on the left
Stamp Duty Agreements, etc.
6%
*Loans for rental agreements: 75 ~ 100% exemption from tax
• Land registrations
• Financing agreements
• Credit agreements
: 100% exemption from tax
• Lease contracts
• Sublease contracts
• Financing agreements
• Credit agreements
• Industrial land deals
: Reduction of tax by 50%
(First time only)
Electricity Duty Electric power used
5% of the total amount paid ( *However, Only the manufacturing industry (*Note 1) is entitled to 100% exemption from tax in the following
period
1) HKZ-1 zone: Ultra mega enterprises (10 years), Super mega enterprises (9 or 10 years)
2) HKZ-2 zone: Ultra mega enterprises (9 years), Super mega enterprises (9 or 10 years)
3) Zones other than the above: Ultra mega enterprises, Super mega enterprises (7 ~ 9 years)
100% exemption from tax Same as on the left
Others －
• Labor welfare tax on construction costs (1%)
: 100% exemption from tax Same as on the left
Oth
er incen
tive m
easures
Equipment investment
subsidy
Renewable energy
equipment VAT imposed on renewable energy equipment acquisition: 50% reimbursement Same as on the left
Wastewater
treatment plants － Construction of facility: 50% subsidized
(Only once) (Up to 10 million rupees) －
Preferential loans No interest loans
100% of a total amount of VAT and CST paid.
*However, the maximum amounts and the period of loans entitled are listed below.
1) HKZ-1 zone:
• Large enterprises: up to 60-75% of Fixed asset (9 or 10 years)
• Mega enterprises: up to 75-90% of Fixed asset (10 or 11 years)
• Ultra mega enterprises: p to 85-95% of Fixed asset (11 or 12 years)
*However, the specified manufacturing industry: up to 95-100% of Fixed asset (13 or 14 years)
• Super mega enterprises: Up to 95-100% of Fixed asset (13 or 14 years)
*However, the specified manufacturing industry: Up to 100% of Fixed asset (15 or 16 years)
1) HKZ-2 zone:
• Large enterprises: Up to 60-75% of Fixed asset (9 or 10 years)
• Mega enterprises: Up to 75-90% of Fixed asset (10 or 11 years)
• Ultra mega enterprises: Up to 85-95% of Fixed asset (11 or 12 years)
*However, the specified manufacturing industry: Up to 95-100% of Fixed asset (13 or 14 years)
• Super mega enterprises: Up to 95-100% of Fixed asset (13 or 14 years)
*However, the specified manufacturing industry: Up to 100% of Fixed asset (15 or 16 years)
1) Zones other than the above:
• Large enterprises: Up to 40-65% of Fixed asset (7 or 9 years)
• Mega enterprises: Up to 50-80% of Fixed asset (8 or 10 years)
• Ultra mega enterprises: Up to 60-85% of Fixed asset (9 or 11 years)
*However, the specified manufacturing industry: 75-90% of Fixed asset (11 or 13 years)
• Super mega enterprises: Up to 75-95% of Fixed asset (11 or 13 years)
*However, the specified manufacturing industry: 80-100% of Fixed asset (12 or 14 years)
Same as on the left
Various registration fees －
• Land registrations
• Financing agreements
• Credit agreements
: 100% exemption from tax (First time only)
• Lease contracts
• Sublease contracts
• Financing agreements
• Credit agreements
• Industrial land deals
: 50% tax reduction (First time only)
*Note 1: The Manufacturing Industry includes manufacture of aerospace, automobile, machine tools (Except steel and cement industries)
130
(Attached Sheet 6-1-7 <2> )
List of Zones under Karnataka State Industrial Policy "Karnataka Industrial Policy 2014" (1/2)
No. District
Number of
counties
(taluk)
Hyderabad-Karnataka region Other than Hyderabad-Karnataka region
HKZ-1 HKZ-2 OHKZ-1 OHKZ-2 OHKZ-3 OHKZ-4
1 Bellary 7 H B Haili / Hadagalli / Kudligi Bellary / Hospet / Sandur
/ Siraguppa
2 Bidar 5 Bhalki / Huninabad
/ Basava Kalyana / Aurad Bidar
3 Gulbarga 7 Gulbarga / Afzalpur / Aland
/ Jewargi Sedam / Chittapur / Chincholi
4 Yadgir 3 Yadgir / Shahapur / Shorapur
5 Koppal 4 Kushtagi / Yelburga Koppal / Gangavathi
6 Raichur 5 Sindhanur / Manvi
/ Lingasugur / Devadurga Raichur
7 B'Iorc (U) 4 Anekal / B’lore (N) / B’lore
(S) / B’lore (E)
8 B’lore (R) 4 Devanahalli / D’balIapura / Hoskote / Nelamangala
9 Ramanagara 4 Magadi / Chaimapauana
/ Kanakapura Ramanagara
10 Chitradurga 6 Holalkere Hiriyur / Molkalmuru /
Chitradurga / Hosadurga Challakere
11 Davanagere 6 Channagiri / Jagalur / HPHaIIi Honnali Davanagere / Harihar
12 Chikkaballapura 6 Gudibande / Bagepalli Chintamani / C’ballapura Gowribidanur / Siddlaghatta
13 Kolar 5 Mulbagal / Srinivasapura Kolar / Bangarpet / Malur
14 Shimoga 7 Soraba Hosanagara Shimoga / Bhadravathi / Sagar / Shikaripura
/ Thirthahalli
15 Tumkur 10 Madhugiri / Koratagere
/ Gubbi / Sira / Pavagada
Tumkur / Turuvekere / Tiptur / Chikkanaya kanahalli /
Kunigal
16 Chmarajanagar 4 Yelandur / Gundlupet Chamarajanagar / Kollegal
17 Chickmagalur 7 Kadur / Mudigere / Tarikere Cliclinagaloru / Shringeri
/ Koppa / N R Pura
18 Dakshina Kannada 5 Bantwal Mangalore / Puttur / Sulya
/ Beithangadi
19 Hassan 8 Arakalgud / Belur Arasikere / C R Patna
/ H N Pura / Alur Hassan / Sakleshpura
20 Kodagu 3 Virajpet Madikeri / Somwarpet
21 Mandya 7 Malavalli Srirangapatna
/ Nagamangala / K R Pet / Pandavapura
Mandya / Maddur
22 Mysore 7 Periyapatna / H D Kote Hunsur / TNPura / K R Nagara Mysore / Nanjangud
23 Udupi 4 Udupi / Kundapura / Karkala
24 Bagalkote 6 Bilagi / Badami Bagalkote / Mudhol
/ Jamkhandi / Hunagund
25 Belgaum 10 Bailhongal / Soundathi / Chikkodi / Raibag
Belgaum / Athani / Hukkeri / Gokak / Khanapur /
Ramdurg
26 Bijapur 5 Muddebihal / B Bagewadi Sindgi / Indi / Bijapur
27 Dharwad 5 Navaigund Dharwad / Hubli / Kaighatagi
/ Kundaghol
131
(Attached Sheet 6-1-7 <3>)
List of Zones under Karnataka State Industrial Policy "Karnataka Industrial Policy 2014" (2/2)
No. District Number of
Counties
Counties in Hyderabad-Karnataka region Counties in regions other than Hyderabad-Karnataka regions
HKZ-1 HKZ-2 OHKZ-1 OHKZ-2 OHKZ-3 OHKZ-4
28 Gadag 5 Nargund / Ron Mundargi Gadag / Shirahatti
29 Haveri 7 Hirekerur / Hanagal Savanur / Shiggaon / Haven Ranebcnnur / Byadagi
30 Utiara Kannada 11 Honnavar / Sirsi / Mundagod
/ Yellapura / Siddapura Karwar / Haliyal / Supa
/ Bhatkal / Ankola / Kumta
Classification of enterprises under the "Karnataka Industrial Policy 2014"
Enterprise size Fixed Capital Investment Direct Employment
Larger enterprises 100 million ~ 2.5 billion rupees 20 ~ 200 people
Mega enterprises 2.5 billion rupees ~ 5 billion rupees 200 ~ 400 people
Ultra Mega enterprises 5 billion rupees ~ 10 billion rupees 400 ~ 800 people
Super mega enterprises 10 billion rupees or more 800 people or more
132
Major Taxes Imposed on Foreign Companies in China (1 / 2) (Attached Sheet 6-1-8 <1>)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Normal Tax Rate Foreign-invested enterprises (Foreign-based companies)
Businesses promoted in National
investment promotion initiatives
(National key industries and projects)
Important district (SEZ)
(Shanghai Pudong New Area, Costal
Economic Open Area, Midwest regions)
Direct T
ax
Corporate Income Tax
(Central: 60%, State
40%)
Income
Com
mon (C
entral G
overn
men
t
• S
tate
Govern
men
t)
25%
* Until 2008:
• Normally 33%
• Foreign companies and some trading companies:
16%
(Since 2009, the imbalance of the policies on local and
foreign capital has been corrected in phases).
*From 2009:
• Dividend income, interests, rent, royalties of
non-resident companies: 20%
(However, it has been reduced to 10% based on the
ordinance implemented.)
Same as on the left
*Until 2008
• Normally 20%
• High-tech companies: 2-year exemption 3-year disount
(Abolished)
[A tax holiday was enjoyed in which tax was exempt n 1st and
2nd year and reduced by 50% in 3rd, 4th and 5th year.]
• Tax on re-investment of dividends is refunded (Abolished)
*From 2009
• Introduction of Tax Sparing credit (TSC)
[When a country grants tax incentives, the residence country
may give a credit for the tax otherwise supposed to be paid.]
• Stock dividends, profits, etc to
domestic resident companies:
100% exemption from tax
• Income gained through projects
for environmental protection,
energy conservation, water
conservation, public
infrastructure: 100% exemption
from tax or discount
• High-tech companies: 15%
• Small companies with low
margin: 20%
[Foreign investment in the
Midwest districts (inland)]
• National key industries:
15%
Ind
irect Tax
Distrib
utio
n tax
(VA
T)
Value-added tax
(Central: 75%,
State: 25%)
Sales of goods
processing, import, and
repair services within
the country,
Co
mm
on
• Livelihood goods : 13%, Others: 17%
• Export goods: 100% exemption from tax
*From 2009
• Fixed assets related to the production of goods,
other than real estate:
Discount on value-added tax on procurement cost
• Duty-free imported materials to be used for export
products: Refund of Export Value Added Tax
• Products stipulated by the Country (Production equipment):
100% exemption from tax.
• Imports of promotional products and equipment for high-tech
products: Tax is reduced within the limit of the total investment
amount.
*Until 2008
• Value added tax on the purchase of imported equipment in the
national key industry: 100% exemption from tax (Abolished in
principle)
• Refund of value added tax on the purchase of domestic
equipment (abolished)
• Imported equipment and parts for
own use: Taxation is resumed.
* Until 2008: 100% exemption from
tax
[Foreign investment in the
Midwest districts (inland)]
• Imported equipment and
parts for own use: Taxation
is resumed.
*From 2008, 100%
exemption from tax
Consumption
tax
Luxury goods
Environment polluting product (oil
products)
Cen
tral
Details are omitted － － －
Business tax Service, construction, and
entertainment industries
State
Details are omitted － － －
Tariff Import / Export goods
Cen
tral
Ad valorem: Average 9.8%
*Goods imported from Japan: A most-favored-nation
tax rate is applied.
*Bilateral, FTA signatory countries: A preferential tax
rate is applied
Same as on the left • Equipment, parts, etc imported
for own use: 100% exemption from
tax
[Foreign investment in the
Midwest districts (inland)]
• Imported equipment:
100% exemption from tax
Reso
urces
tax
Urban township
land use tax Land area
Com
mon
0.6 Yuan to 3 Yuan per square meter Same as on the left
*Until 2007: 100% exemption from tax － －
Oth
er incen
tive m
easures
Export subsidy
(1) To promote exports, two major policies are conducted.
• Export tax discount: Direct tax and indirect tax discounts within the country and export tax discount
• Refund of export tax: All or part of direct tax and indirect tax within the country is refunded
*From 2005, a revision to the amount of tax to be refunded (refunds are cut or abandoned for industries that degrade the environment or energy -intensive industries, while the amount of
refund is increased on high-tech industries.)
Financial aids
(1) To promote export, the following loan policies are conducted.
• Export seller loan: For funds necessary for procurement or production of mechanical, electrical or high-tech products.
(2) Others - Financing policies are also in place for the purpose of infrastructure development.
• Mid-west regions: Foreign government loans, international financial institution loans
• Special Economic Zones: Low interest rate development loans (An increase in fiscal revenue must be used in the development district)
• High-Tech Zones: Preferential loans offered by China for science projects by high-tech companies
(Note) In recent years, in order to terminate the "Bringing-in" strategy to invite foreign capital, the country has changed its direction to the "Go Global" strategy to actively promote investment to and advance into foreign countries by reducing or abolishing
preferential measures for foreign capital in the country.
133
(Attached Sheet 6-1-8<2>)
Major Taxes Imposed on Foreign Companies in China (2/2)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Special Economic Zone (SEZ)
Special Economic Zone (SEZ) Economy and technology development
zones
High-tech industries development
zones Free trade zones (Jurisdiction of customs)
Direct T
ax
Corporate Income Tax
(Central: 60%, State 40%) Income
Co
mm
on
Cen
tral
Govern
men
t
• S
tate
Go
vern
men
t)
• High-tech companies: 2-year
exemption 3-year reduction (Abolished)
A tax holiday was enjoyed in which tax
was exemption in the 1st and 2nd year
and 50% reduced in the 3rd, 4th and 5th
year
Normal tax rate
*Until 2008
Foreign companies in promoted
businesses located in inland area: 15%
tax for 3 years
[High-tech certified companies]
• 15% (applicable whether inside or
outside the zones, or domestic or
foreign capital)
Tax rate differs depending on the zone
*Until 2007:
• Processing- export- production-type foreign
capitals: 15% tax
(Phased out)
Ind
irect Tax
Distrib
utio
n tax
(VA
T)
Value-added tax
(Central: 75%, State:
25%)
Domestic sales of
goods, processing,
import, repair services
Co
mm
on
• Imported facilities and parts for own
use: taxation is resumed.
*Until 2008: 100% exemption from tax
• Imported facilities and parts for own
use: taxation is resumed.
• Export goods: In principle, 100%
exemption from tax
－
• Import and export, transit trade, processing trade,
logistics and warehousing, product exhibition
businesses: Bonded (Payment pending)
Consumption tax Environment polluting products
(oil products)
Cen
tral
－ － － －
Business tax Service, construction, and
entertainment industries
State
－ － － －
Tariff Import / Export goods
Cen
tral
• Imported facilities and parts for own
use: 100% exemption from tax
• Tariff on import/export cargoes:
reduction of tax
• Imported facilities and parts for own
use: 100% exemption from tax
• Export goods: In principle, 100%
exemption from tax
• Imported facilities to be used in
manufacturing activities in a project
promoted by the national government::
100% exemption from tax
• Import and export, transit trade, processing trade,
logistics and warehousing, product exhibition
businesses: Bonded (Payment pending)
• Imported facilities and parts for own use: 100%
exemption from tax
• Sales to companies within bonded areas: taxes
are refunded, as such activities are considered
exports.
Resources
tax
Urban township
land use tax Land area
Co
mm
on
Other preferential measures
Remarks
(1)In China, development zones are classified into 4 levels, i.e., state, provincial, municipal, and county levels.
• At the state level, there are 9 kinds of zones, i.e., "Special Economic Zone (SEZ)" "Economic and Technological Development Zone", Coastal Economic Open Zone", "High-Tech
Industrial Development Zone ", "Pudong New Area ", and "Free Trade Zone", "Free Trade Zone Logistics Park", "Import Processing Zone" and "Bonded Port Zone".
• Free Trade Zone Logistics Parks that are not listed above are entitled to refund of value added tax when goods are delivered into the zone. Import Processing Zones are not required
Deposit Ledger, entitled to refund of value added tax when goods are delivered into the zone and 24-hour online custom clearance.
(2) Incentives for 2008 and later have been focused on investment to the national key industries such as high-tech industry, moving from investment to the certain zones such as
important regions or development zones.
134
Major Taxes Imposed on Foreign Companies in Thailand (1/2) (Attached Sheet 6-1-9 <1>)
Categ
ory
Tax Items subject to tax
Ju
risdictio
n
Normal Tax Rate *1 baht = approx. 3 yen BOI (Board of Investment of Thailand) promotional businesses and projects
Direct T
ax
Corporate Income
Taxes
Income
Cen
tral Go
vern
men
t
In principle, 30%
*As a temporary legislation, tax reduction measures are implemented as below.
• 0% (300,000 bahts and below)
• 15% (more than 300,000 ~ 1 million bahts and below)
• 20% (more than 1 million bahts)
*Reduction measures are in place under bilateral tax treaties
• Dividend 10%
• Interest 15% (10% of the payment to financial institution)
• Loyalty 15%
[Promoted businesses (7 categories and 107 business activities): Group A1, A2, A3, A4, B1, B2]
(See Attached Sheet 6-2-3 from <3> to <6> )
(1) Business activities in Group A1:
• 100% exemption from tax with no limits (8 years)
(2)Business activities in Group A2:
• 100% exemption from tax but limited to investment amount (excluding land cost and working
capital) (8 years)
(3)Business activities in Group A3:
• 100% exemption from tax but limited to investment amount (excluding land cost and working
capital) (5 years)
(4)Business activities in Group A4:
• 100% exemption from tax but limited to investment amount (excluding land cost and working
capital) (3 years)
*Dividends: 100% exemption from tax
Ind
irect Tax
Excise Tax Sales of specified goods
Either volume-based or ad valorem, whichever is higher, is applied.
*Taxes are imposed on small automobiles, petroleum, petroleum products, alcohol,
tobacco, etc
Same as on the left
VAT (Value Added
Tax)
Sales of goods,
provision of services
and imports
10%
* As a temporary legislation, tax reduction measures are implemented as below.
*Export goods and international logistic, etc: 100% exemption from tax
*Although there are no provisions in place by BOI, virtually the measure as same as the tariff
incentives is provided under the guarantee of BOI (The same applies to export goods)
Tariff Import / Export goods
Either volume-based or ad valorem, whichever is higher, is applied.
*Both tariff and VAT are imposed on imported goods (For specified industries, up to
10% tariff is imposed on imported goods).
*For export goods, rice, iron scrap, rawhide, rubber, wood, raw silk, fish power, etc are
subject to tsxation. VAT rate is 0%
*Some of the tariffs have been abolished under the Economic Partnership Agreement
(EPA) and the Japan-ASEAN Comprehensive Economic Partnership Agreement.
(EPA agreement countries: New Zealand, Peru, Japan, India and Australia)
[Promotional businesses (7 categories, 107 business activities): Group A1, A2, A3, A4, B1, B2]
• Businesses other than those in Group B2:
Imports of machinery 100% exemption from tax
• Businesses in all the Groups:
Imports of raw materials and materials intended to export: 100% exemption from tax (1 years)
(Can be extended where necessary)
Stamp Duty Agreements, etc. 1 baht per 1,000 bahts in agreement (Normally 0.1 ~ 1%) Same as on the left
Land and Building Tax Lands and buildings that
are not own residence
State G
overn
men
t
12.5% annually Same as on the left
Land development Tax Lands 0.25% ~ 0.95% annually Same as on the left
Signboard tax Signboards put up
outside the buildings Depending on the language displayed and the size Same as on the left
Other preferential measures
• Twice the amount of transportation costs, electricity bills and water bills is tax deductible.
• 125% of invested capital spent on infrastructure installation and construction is tax deductible
• Ownership of lands is granted to foreigners.
• Foreigner work permits are granted
• Permission of foreign currency remittances is granted
Remarks
*Until 2014, the country was divided into three zones as part of the regional dispersion policy, and incentives
related to corporate income taxes and imports and exports had been developed for each zone.
*In 2015, the regional dispersion policy was abolished (zone system), and policies shifted toward incentives in
accordance with the importance of businesses or projects.
*However, BOI's investment promotion zones include "20 prefectures which are among the lowest in national
income per capita ", "Special Economic Zone (SEZ) ", "BOI's promoted science and technology zone".
135
(Attached Sheet 6-1-9 <2> )
Major Taxes Imposed on Foreign Companies in Thailand (2/2)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Special Economic Zone (SEZ)
〔Industrial Estate〕controlled by the IEAT (Industrial Estate Authority Thailand)
Privately managed areas
Industrial Parks
/ Industrial Zones
/ Industrial Land
Ordinary zones Bonded zones
GIZ: General Industrial Zone IEAT Free Zone DFZ: Duty Free Zone
*Industries, service sectors and related businesses
thereof
*For domestic sales and exports
*Industries, service sectors specified by the government
and related businesses
*For exports (60% of total production output can be sold
domestically. However, normal tax rate is imposed on
domestic sales.)
*Former EPZ (Export Processing Zone)
*Jurisdiction of customs
*For exports
Direct T
ax
Corporate Income Taxes Income
Cen
tral Go
vern
men
t
(As usual) Same as on the left Same as on the left Same as BOI's incentives
Ind
irect Tax
Excise Tax
Sales of Special Goods
(Petroleum products and
others)
(As usual) 100% exemption from tax
*upon delivery of goods, normal tax rate is imposed. Same as on the left (As usual)
VAT (Value Added Tax)
Sales of goods.
provision of services
and imports
(As usual)
100% exemption from tax
*limited to materials for factory construction,
machinery, equipment, raw materials and parts for
manufacturing activities.
Same as on the left Same as on the left
Tariff
Imported / Exported
goods
(As usual)
100% exemption from tax
*limited to materials for factory construction,
machinery, equipment, raw materials and parts for
manufacturing activities.
Same as on the left Same as BOI's incentives
Stamp Duty Agreements, etc. (As usual) Same as on the left Same as on the left Same as on the left
Land and Building Tax Lands and buildings
other than own resident
State G
overn
men
t
(As usual) Same as on the left Same as on the left (As usual)
Land Development Tax Land (As usual) Same as on the left Same as on the left (As usual)
Signboard tax Signboards on
buildings (As usual) Same as on the left Same as on the left (As usual)
Other preferential measures
• Regardless of foreign capital ratio
• Permits regarding land acquisition,
construction, factory establishment, factory
business operation can be collectively
applied.
• Foreigner work permits are easily granted.
• Permission of foreign currency remittance
is granted.
• Ownership of land is granted to foreigners.
• Foreigner work permits are easily granted.
• Permission of foreign currency remittance is
granted.
• Exemption of BOI special fees
• For domestic sales, a preferential
tax rate is applied according to
the local procurement ratio.
• Smooth loading and unloading of
cargos is enabled.
Remarks
• Corporations certified a business sector or a project encouraged by BOI are entitled to enjoy both incentives provided by BOI and the
respective industrial estate.
• BOI's preferential measures
apply because construction,
sales and management in the
areas is conducted through
BOI’s investment promotion.
136
(Attached Sheet 6-1-9 <3>)
BOI (Board of Investment of Thailand) Promoted Businesses (7 categories, 107 business activities) 2015-2021 (1/4)
Classification
Group A Group B
A1 A2 A3 A4 B1 B2
Bu
sinesses
(Category 1)
Agriculture and
agricultural products
1.3 Economic forest
plantation (expect for
Eucalyptus)
1.8 Grading, packaging and storage
of plants, vegetables, fruits or
flowers (using advanced technology,
e.g., fruit ripeness sensor, ratio
frequency pest control, nuclear
magnetic resonance)
1.12 Manufacturing of active
ingredients from natural raw
materials
1.14.2 Manufacturing of rubber
products
1.16.1 Manufacturing of fuel from
agricultural products
1.16.2 Manufacturing of fuel from
agricultural products including
agricultural scrap or garbage or
waste (e.g., biomass to liquid
(BTL) , biogas from water waste
1.18 Manufacturing of medical food
or food supplements
1.1 Manufacturing of biological fertilizers, organic
fertilizers, nano-coated organo chemical
fertilizers, soil conditioners and bio-pesticides
1.2 Plant or animal breeding (only those that are
not eligible for biotechnology activity)
1.7 Deep sea fishery
1.8 Grading, packaging, storage of plants,
vegetables, fruits or flowers (using advanced
technology, e.g., color sorter, vapor heat treatment
to kill fruit fly eggs, seed coating)
1.9 Manufacturing of modified starch or search
made from plants that have special properties
1.10 Manufacturing of oil or fat from plants or
animals (except for soybean oil)
1.13 Tanneries or leather finishing
1.16.3 Manufacturing of biomass briquettes and
pellets
1.17 Manufacturing or preservation of food,
beverages, food additives or food ingredients
using modern technology (except for drinking
water, ice cream, candy, chocolate, gum, sugar,
carbonated soft drinks, alcoholic beverages,
caffeinated beverages and flour or starch made
from plants, bakery products, instant needles,
essence of chicken and bird's nest)
1.20 Trading centers for agricultural goods
1.5 Animal propagation or animal
husbandry
1.6 Slaughtering
1.11 Manufacturing of natural extracts or
products from natural extracts (except for
medicine, soap, shampoo, toothpaste and
cosmetics)
1.14.1 Manufacturing of primary processed
Rubber
1.15 Manufacturing of products from
agricultural by-products or agricultural
waste (except for those with
uncomplicated production processes, e.g.,
drying, dehydration)
1.4 Crop drying and silo
facilities
1.19 Cold storage or cold
storage transportation
Incen
tivel m
easure
Corporate Income
Taxes
100% exemption from tax
without limit
(8 years)
100% exemption but limited to
investment amount (excluding
land cost and working capital)
(8 years)
100% exemption from tax but limited to
investment amount (excluding land cost and
working capital)
(5 years)
100% exemption from tax but limited
to investment amount (excluding land
cost and working capital)
(3 years)
－ －
Imports of machinery 100% exemption from tax Same as on the left Same as on the left Same as on the left Same as on the left －
Imports of raw
materials and
materials intended for
export
100% exemption from tax
(1 year) (Can be extended
where necessary)
Same as on the left Same as on the left Same as on the left Same as on the left Same as on the left
137
(Attached Sheet 6-1-9 <4>)
BOI (Board of Investment) Promoted Businesses (7 categories, 107 business activities) 2015 - 2021 (2/4)
Classification
Group A Group B
A1 A2 A3 A4 B1 B2
Bu
sinesses
(Category 2)
Minerals,
Ceramics and
Basic Metals
2.3.1 Manufacturing of advanced or nano materials or
products produced from advanced or nano materials
with continue manufacturing process within the same
project
2.7 Manufacturing of up-stream steel, (i.e., Hot metal,
pig iron, sponge iron)
2.8 Manufacturing of intermediate steel (i.e., slab,
billet and bloom) (when there is a continuous
production process from manufacturing of up-stream
steel in the same project)
2.9.1 Manufacturing of down-stream high tensile
strength steel
2.9.2 Manufactuing of down-stream steel with
continuous production process from manufacturing of
upstream and intermediate steel within the same
project.
2.13.1 Ductile cast steel parts
2.3.2 Manufacturing of products produced
from advanced or nano materials
2.4.1 Manufacturing of special quality
glass products
2.9.7 Manufacturing of tin mill black plate
2.9.8 Manufacturing of cold-rolled
electrical steel sheet
2.10.1 Manufacturing of seamless steel
and semi-seamless steel pipes
2.11 Manufacturing of metal powder
(except for shot blasting)
2.13.2 Manufacturing of other cast steel
parts
2.14 Manufactureing of forged iron / steel
parts
2.8 Manufacturing of intermediate steel (i.e., slab, billet and
bloom) (Intermediate steel production only)
2.9.3 Manufacturing of long steel products for industrial use
including steel wire rods, wires, shafts and bars
2.9.5 Manufacturing of flat rolled steel products for industrial
use, i.e., hot or cold rolled stainless steel sheets, steel plates,
hot or cold rolled steel sheets and coated steel sheets
2.12 Manufacturing of ferro-alloy
2.15 Rolling, drawing, casting or forging of non-ferrous
metals
2.1 Prospecting of minerals
2.2 Potash mining and / or dressing
2.4.2 Manufacturing of glass products
2.4.3 Manufacturing of ceramic products
(except for earthen ware and ceramic
tiles)
2.9.4 Manufacturing of long steel
products for construction use, i.e., steel
wire rods, wires, shafts and bars
2.9.6 Manufacturing of flat rolled steel
products for construction use, i.e., hot or
cold rolled stainless steel sheets, steel
plates, hot or cold rolled steel sheets and
coated steel sheets
2.10.2 Other steel pipes
2.5 Manufacturing of
fire-resistant materials or
heat insulation (except for
aerated and light weight
bricks)
2.6 Manufacturing of
gypsum boards or gypsum
products
2.16 Coil center
(Category 3)
Light Industries
3.9 Creative product design
and development center
3.1.1.1 Manufacturing of technical fiber or functional
fiber
3.11.1 Manufacturing of high-risk or high technology
medical devices or medical devices that are
commercialized from public sector research or
collaborative public private sector research
3.1.2.1 Manufacturing of functional
yarn or functional fabric
3.1.3 Bleaching, dyeing and finishing or
printing and finishing or printing
3.11.2 Manufacturing of other medical
devices (except for medical devices made
of fabrics or fibers)
3.1.1.2 Manufacturing of recycled fiber
3.1.2.2 Manufacturing of other yarns or fabrics (*1)
3.1.4 Manufacturing of garments, clothing accessories, and
household textiles (*1)
3.2 Manufacturing of non-woven fabrics or hygienic
products made of non-woven fabrics
3.3 Manufacturing of bags or shoes or products made of
leather or artificial leather (*1)
3.6 Manufacturing of furniture or parts (*1)
3.7 Manufacturing of toys (*1)
3.8 Manufacturing of gems and jewelry or parts including
raw materials and prototypes
3.10.1 Manufacturing of lenses that are not medical devices,
sunglass lenses or cosmetic lenses, e.g. camera lenses
3.11.3 Manufacturing of medical devices made of fabrics or
fibers, e.g. gowns, drapes, caps, face masks, gauze and
cotton wool
3.1.1.3 Manufacture of other fibers
3.1.2.2 Manufacture of other yarn or
fabric (*2)
3.1.4 Manufacture of garments, clothing
accessories, and household textiles (*2)
3.3 Manufacture of bags or shoes or
products made of leather or artificial
leather (*2)
3.4 Manufacture of sports equipment or
parts
3.5 Manufacture of musical instrument
3.6 Manufacture of furniture or parts (*2)
3.7 Manufacture of toys (*2)
3.10.2 Manufacture of sunglass lenses,
cosmetic lenses, eyeglass frames and
parts
Incen
tive m
easures
Corporate Income
Taxes
100% exemption from
tax without limit
(8 years)
100% exemption from tax but limited to
investment amount (excluding land cost
working capital) (8 years)
100% exemption from tax but
limited to investment amount
(excluding land cotand working
capital) (5 years)
100% exemption from tax but limited to
investment amount (excluding land cost and
working capital) (3 years)
－ －
Imports of
machinery
100% exemption from
tax Same as on the left Same as on the left Same as on the left Same as on the left －
Imports of raw
materials and
materials intended to
export
100 exemption from
tax (1 years) (Can be
extended where necessary)
Same as on the left Same as on the left Same as on the left Same as on the left Same as on the left
*1: Projects that have invested 0.5% or more of the total sales amount gained during the initial three years in designing or product research and development
*2: Projects without an investment in designing or product research and development, or project that have invested less than 0.5% of the total sales amount gained during the initial three years.
138
BOI (Board of Investment) Promoted Businesses (7 categories, 107 business activities) 2015 - 2021 (3/4) (Attached Sheet 6-1-9 <5>)
Classification Group A Group B
A1 A2 A3 A4 B1 B2
Bu
sinesses
(Category 4)
Metal Products,
Machinery and
Transport Equipment
4.11.1 Manufacturing of airframe,
airframe components, major
components, e.g. engine, propeller,
and avionics equipment
4.5.1 Manufacturing of automation machinery and /
or automation equipment with engineering design
4.8.1 Manufacturing of vehicle parts using high
technology
4.8.2 Manufacturing of automobile safety and
energy-saving parts
4.8.3 Manufacturing of parts for hybrid, electric
vehicle (EV) and plug-in hybrid electric vehicles
(PHEV)
4.8.4 Manufacturing of rubber tires for vehicles
4.9 Building or repair of ships
4.10 Manufacturing of trains or electric
trains or equipment or parts (only rail system)
4.11.3 Repair of aerospace, components and equipment
4.13 Manufacturing of fuel cells
4.15.1 Manufacturing scientific equipment using high
technology
4.1.1 Manufacturing of products from metal or
alloy powder
4.1.2 Manufacturing of metal products or metal
parts
4.5.2 Manufacturing of machinery, equipment and
parts and / or repair of mould and die
4.7 Manufacturing of automobile engines (with
parts forming)
4.11.2 Manufacturing of other aircraft parts, and
aircraft interior (except for disposable and
reusable aircraft utilities and supplies
4.12 Manufacturing of motorcycles (except for less
than 248 cc engine displacement)(A project must
have forming process)
4.14.1 Fabrication industry or platform repair with
engineering design for petroleum industry
4.15.2 Manufacturing of other scientific equipment
4.1.3 Other metal products including other
metal parts (with continuous forming
process from pressing, pulling casting or
forging of non-ferrous metal within the
same project.)
4.3 Heat treatment
4.4 Manufacturinf of multi-purpose engines
and equipment (in a project which has
forming process of main engine parts)
4.5.3 Assembling of machinery and
machinery equipment
4.7 Manufacturinf of automobile engines
(Assembling of engines)
4.14.2 Fabrication industry or platform repair
for petroleum industry
4.1.3 Other metal products
including other metal parts (a Project must
have forming process, i.e. machining and
stamping, etc)
4.2 Surface treatment or anodized surface
treatment (except coating or coloring
treatment for decoration purpose)
4.4 Manufacturing of multi-purpose
engines and equipment (Assembling of
multipurpose engine or equipment)
4.6 Manufacture of general automobile
4.8.5 Manufacturing of other automobile
parts
4.12 Manufacturing of motorcycles
(except less than 248 cc engine
displacement) (without forming process)
(Category 5)
Electronics and
Electrical Appliances
Industry
5.6 Electronics design
5.7.1 Embedded software
5.3.1 Manufactuing of organics and printed electronics (OPE)
5.3.2.1 Manufacturing of emission, transmission and reception
devices
used in fiber-optic and wireless communication systems
5.3.3 Manufacturing of electronic control and measurement
instruments for
industrial / agricultural use
5.3.4 Manufacturing of security control equipment
5.4.1 Manufacture of parts for organics and printed electronics
(OPE)
5.4.2 Manufacturing of solar cell and / or raw materials for solar
cells
5.4.3.1 Manufacturing of parts for emission,
transmission and reception devices used
in fiber-optic and wireless communication
systems
5.4.4 Manufacturing of parts for electronic control and
measurement instruments for industrial / agricultural use,
medical / scientific devices and automotive industry
5.4.5 Manufacturing of parts for security control equipment
5.4.6.1 Manufactureingof advanced technology hard disk drives
and / or parts
5.4.7 Manufacturing of solid state drives and / or parts for solid
state drives
5.5.1 Manufacturrng of wafers
5.1.1 Manufacturing of advanced technology
electrical products
5.2.1.1 Manufacturing of power inverters for
industrial use
5.3.2.2 Manufacturing of other Telecommunication
products
5.4.3.2 Manufacturing of parts for other
telecommunication products
5.4.6.2 Manufacturing of hard disk drives and / or
parts for hard disk drives
5.4.8 Manufacturing of parts and / or equipment for
solar-powered products
5.4.9 Manufacturing of semiconductors and / or
parts for semiconductors
5.4.10 Manufacturing of equipment and / or parts
for photonic devices and / or for photonic
integrated systems
5.4.11 Manufacturing of flat panel displays
5.4.12 Manufacturing of flexible printed circuits
and / or multi-layer printed circuit boards and / or
parts
5.5.2 Manufacturing of material based on thin-film
technology
5.7.2 Development enterprise software and / or
digital content
5.1.2 Manufactureingof air
conditioners, refrigerators, freezers, washing
and drying machines
5.2.1.2 Manufacturinf of other power
inverters
5.2.2 Manufacturing of LED lamps
5.2.3 Manufacturing of compressors and / or
motors for electrical appliances
5.3.5 Manufacturing of audio visual products
5.3.6 Manufacturing of office electronics
5.4.6.3 Manufacturing of top covers, base
plates or peripherals for hard disk drives
5.4.13 Manufacturing of other memory
storage equipment
5.4.14 Manufacturing of printed circuit board
assembly (PCBA)
5.4.15 Manufacturing of electromagnetic
products
5.4.16 Manufacturing of passive components
5.4.17 Manufacturing of parts for audio
visual products
5.4.18 Manufacturing of parts for office
electronics
5.1.3 Manufacturing of other electrical
products
5.2.4 Manufacturing of wire harnesses
5.2.5 Manufacturing of parts and / or
equipment for other electrical products
5.3.7 Manufacturing of other electronic
products
5.4.19 Manufacturing of parts for other
electronic products
5.8 E-commerce
Incen
tive m
easures
Corporate Income
Taxes
100% exemption from tax
without limit
(8 years)
100% exemption from tax but limited to
investment amount (excluding land cost and
working capital)
(8 years)
100% exemption from tax but limited to
investment amount (excluding land and
working capital)
(5 years)
100% exemption from tax but
limited to investment amount
(excluding cost of land cost and
working capital)
(3 years)
－ －
Imports of
machinery 100% exemption from tax Same as on the left Same as on the left Same as on the left Same as on the left －
Imports of raw
materials and
materials intended to
export
100% exemption from tax
(1 year) (Can be extended
where necessary)
Same as on the left Same as on the left Same as on the left Same as on the left Same as on the left
139
(Attached Sheet 6-1-9 <6>)
BOI (Board of Investment) Promoted Businesses (7 categories, 107 business activities) 2015 - 2021 (4/4)
Classification
Group A Group B
A1 A2 A3 A4 B1 B2
Bu
sinesses
(Category 6)
Chemicals, paper
and plastic
6.2.1 Manufacturing of eco-friendly chemicals or
polymers or manufacturing of products from eco-friendly
chemicals or polymers that is incorporated within the
same project as the manufacturing of eco-friendly
chemicals or polymers 6.5 Manufacturing of specialty
polymers or specialty chemicals
6.9 Manufacturing of active pharmaceutical ingredients
6.11 Manufacturing of chemical fundamental fertilizers
6.12.1 Hygienic pulp or hygienic paper
6.2.2 Manufacturing of products from eco-friendly
polymers
6.4 Manufacturing of petrochemicals
6.7. Manufacturing of plastic packages with special
properties
6.12.2 Manufacturing of specialty pulp or specialty
paper
6.14.1 Production of digital printed matter
6.1 Manufacturing of industrial
chemicals
6.8 Manufacturing of plastic products
from recycled plastic
6.13 Manufacturing paper articles
6.3 Oil refinery
6.6 Manufacturing of plastic products
for industrial use
6.10 Manufacturing of pharmaceuticals
6.14.2 Production of printed matter
(Category 7)
Services and
public facilities
7.1.1.1 Production of electricity or
electricity and steam from garbage
or refuse derived fuel
7.8 Energy Service Companies
(ESCO)
7.9.2 Industrial areas or
technology industrial areas
7.10 Cloud services
7.11 Research and development
7.12 Biotechnology
7.13 Engineering design
7.14 Scientific laboratories
7.15 Calibration services
7.19 Vocational training centers
7.1.1.2 Production of electricity or electricity and steam
from renewable energy, such as solar energy, wind
energy, biomass or biogas
7.1.5 Commercial airports
7.3.1 Rail transport
7.3.3 Maritime transportation services
7.16 Product sterilization services
7.17 Recycling and reuse of unwanted materials required
sorting / separation process and additional processing for
recycling or recovery of valuable substances.)
7.18 Waste treatment or disposal
7.1.2 Production of tap water, industrial water or steam
7.1.3 Container yards or inland container depots for
inspection of export and imports goods and
7.1.4 Loading / unloading facilities for cargo ship
7.3.4 Air transportation services
7.4.2 International distribution centers – IDC
7.9.1.2 Gem and jewelry industrial zones
7.9.1.3 Logistics Parks
7.9.1.4 Industrial zone for motion picture production
7.9.1.5 Industrial estates or industrial areas for
environmental protection
7.17 Recycling and reuse of unwanted materials
(sorting / separation)
7.20 Thai motion picture production
7.21 Motion picture support services
7.22.3 Amusement parks
7.22.4 Cultural centers or arts and crafts centers
7.22.5 Open zoos
7.22.6 Aquariums
7.22.7 Race tracks
7.22.8 Cable cars
7.23.2 Convention halls
7.23.3 International exhibition centers
7.1.1.3 Production of electricity or
electricity and steam from other
energy sources
7.23.1 Hotels (located in one of the 20
special investment promotion
provinces)
7.2 Natural gas station
7.3.2 Pipeline transportation
7.4.1 Distribution centers
7.5 International headquarters – IHQ
7.6 International trading centers: ITC
7.9.1.1 Industrial areas or industrial
estates
7.22.1 Ferry services or tour boat
services or tour boat renting
7.22.2 Tour boat port services
7.23.4 Health rehabilitation centers
7.7 Trade and investment
support
offices: TISO
7.23.1 Hotels in other
provinces
Incen
tives m
easures
Corporate Income
Taxes
100% exemption from tax,
without limit
(8 years)
100% exemption from tax, but limited to
investment amount (excluding cost of land
and working capital)
(8 years)
100% exemption from tax, but limited to
investment amount (excluding cost of land
and working capital) from tax
(5 years)
100% exemption from tax but
limited to investment amount
(excluding cost of land and
working capital) (3 years)
－ －
Imports of
machinery 100% exemption from tax Same as on the left Same as on the left Same as on the left Same as on the left －
Imports of raw
material and
materials to be
exported
100% exemption (1 years)
(can be extended when
necessary)
Same as on the left Same as on the left Same as on the left Same as on the left Same as on the left
140
(Attached Sheet 6-1-10 <1>)
Major Taxes Imposed on Foreign Companies in Indonesia (1/2)
Cate
go
ry Tax Items subject to tax
Jurisd
iction Normal Tax Rate *1 rupiah = approx. 0.01 yen Foreign based companies
Direct T
ax
Corporate Tax Income
Cen
tral Go
vern
men
t
25%
*Small companies, annual sales of which is 50 billion rupiah and below: tax reduction by 50% up to 4.8
billion rupiah
*The Special Companies, annual sales of which is 4.8 billion rupiah: 1 % of the sales
*Stock exchange listing companies and when publicly traded 40% or more of the shares: 20%
*Dividends: Local companies 15%, Foreign-based companies 20%
*Under Bilateral tax treaty
• Dividend remittance: 10% (Investment ratio 25% or more), 15% (Investment ratio less than 25%)
• Taxes imposed by Indonesia can be deducted in Japan
[Investment in the Specific Sectors (5 pioneer Industries]
*5 industries: Basic metal, Basic organic chemistry, machinery,
communication equipment and renewable energy
• Upon investing 1 trillion rupiah or more: 100% exemption from tax (5
- 10 years) ＋50% exemption from tax (thereafter two years)
[Investment in the Specific Businesses, or businesses in Specific regions
(129 businesses)]
*66 Specific Businesses : oil refining, manufacture of copying machines
and consumer electrics, etc
*77 Businesses limited in Specific Regions: Production of rice,
soybeans, sugar, coal mining, etc.
• Up to 30% of investment amount: 5% deduction annually (6 years)
• Shorten depreciation period by half
• Dividend paid to foreign countries: reduced to 10%
• Deferral of losses: : Up to 10 years with conditions (Normally 5 years)
Ind
irect Tax
Excise Tax Liquor, tobacco A tax rate is set per unit (1 liter, 1 stick of tobacco) Same as on the left
LST
(Luxury-goods Sales Tax)
Supply and import of
luxury goods
(motorcycles,
vehicles, cameras,
air-conditioners,
microwaves, liquor,
jewelry,, etc)
10% ~ 200%
(Current tax rate : 10% ~ 75%) Same as on the left
VAT(Value Added Tax)
Sales of goods,
provision of services,
import, etc
10% (which can be increased or decreased between 5% ~ 15% based on Cabinet Order)
*Export goods: 100% exemption from tax
*Service provision to foreign-based companies: Normal tax rate or 100% exemption from tax
*Some of the goods (mineral products and daily necessities, etc) and services are tax-free.
*Imports and domestic supply of Strategy Goods (Capital goods, electricity costs( over 6600 W, except
houses) and water costs incurred for the manufacturing activities to produce taxable products.: 100%
exemption from tax
Same as on the left
Tariff Import / Export goods
• Import: Current highest tax rate 40% (0% ~ 150% of tariff assessment))
• Export: : volume-based or ad valorem
*Imports of machinery and raw materials upon initiation or expansion of business or investment:
100% exemption from tax (2 years) (4 years only when machinery is used which consists of 30%
domestic machinery.)
Same as on the left
Stamp Duty Agreements, etc. Either 3,000 or 6,000 rupiah (Fixed amounts) depend on the document Same as on the left
Land and building tax (PBB:
Pajak Bumi dan Bangunan) Lands and buildings
Transferred to S
tate from
Central
0.5%
*Tax-free allowance offered.
(taxable amount is 20% or 40% of the value determined by the government (NJOP): Up to 24 million
rupiah)
Same as on the left
Tax and building acquisition
tax (BPHTB: Ben
Pengalihan Hak atas Tanah
dan Bangunan)
Purchases of real
estates, transfer of
rights Fixed 5% Same as on the left
Remarks • Details of local taxes (Automobile tax, entertainment tax, advertisement tax, hotel tax, restaurant tax,
underground water tax, water use tax, etc) are omitted.
141
(Attached Sheet 6-1-10 < 2> )
Major Taxes Imposed on Foreign Companies in Indonesia (2/2)
Categ
ory
Tax Items subject to tax
Jurisd
iction
Major Special Economic Zone (SEZ)
Bonded Zones / KB:Kawasan Berikat FTZ: Free Trade Zones and Free Trade Ports Economic Integration Development Districts
(KAPET: Kawasan Pengembangan Ekonomi Terpadu)
*Export Processing Zones (where final products are
manufactured for export)
*Bonded warehouses• Bonded factories, etc
*Designation period: 70 years
Direct T
ax
Corporate Tax Income
Cen
tral Go
vern
men
t
• Prepaid income taxes on import of goods and
imported goods purchased in the country (Article
No.22): 100% exemption from tax
• Prepaid income taxes on import of goods and imported
goods purchased in the country (Article No.22): 100%
exemption from tax
• Dividend income: 50% exemption from tax
• Shortening of the depreciation period by half for
machinery and equipment
• Deferral of losses: maximum of 10 years (Normally 5
years)
Ind
irect Tax
Excise Tax Liquor, tobacco (As usual)
• Imported goods: 100% exemption from tax
• Between companies inside FTZs: 100% exemption from
tax
(As usual)
LST
(Luxury Goods Sales Tax)
Supply and import of
luxury goods
(motorcycles,
vehicles, cameras,
air-conditioners,
microwaves, liquor,
jewelry,, etc)
• Import and domestic purchase: 100% exemption from
tax
• Imported goods: 100% exemption from tax • Imports of capital goods, raw material, equipment, etc to
be used in manufacturing activities, imports of goods for
processing, or delivery thereof between the parties: 100%
exemption from tax
VAT
(Value Added Tax)
Sales of goods,
provision of services,
import, etc
• Import and domestic purchases: 100% exemption
from tax
• Imported goods: 100% exemption from tax
Same as above
Tariff
Imported / Exported
goods
• Import of raw materials and capitals, etc: 100%
exemption from tax
• Other import goods: 100% exemption from tax
• Domestic sales: exemption from tax with the limit of
50% of the previous year's sales performance
(Import procedures unnecessary, VAT is also subject
to 100% exemption from tax)
• Import tariff: 100% exemption from tax
• Delivery from bonded warehouses and special economic
zones: 100% exemption from tax
• Between companies inside FTZ: 100% exemption from
tax
• Imports of capital goods, raw material, equipment, etc to
be used for manufacturing activities
: 100% exemption from tax
Stamp Duty Agreements, etc. (As usual) Same as on the left Same as above
Land and building tax (PBB:
Pajak Bumi dan Bangunan) Land and buildings
Transfer to S
tate from
Central
(As usual) Same as on the left Same as on the left
Tax and building acquisition
tax (BPHTB:
Ben Pengalihan Hak atas
Tanah dan Bangunan)
Purchases of real
estates, transfer of
rights
(As usual) Same as on the left Same as on the left
Remarks
142
(References)
(1) State taxes in Maharashtra State
Maharashtra State SEZ / Maharashtra State website
http://www.sezindia.nic.in/writereaddata/statePolicies/maharashtrapolicy.pdf
MIDC (Maharashtra Industrial Development Corporation) website
http://www.midcindia.org/Lists/TenderDocumentsList/DispForm.aspx?ID=13283
Maharashtra Budget 2014-15 - Key indirect tax proposals/changes/KPMG
https://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/taxnewsflash/Doc
uments/india-june-11-2014no2.pdf#search='https%3A%2F%2Fwww.kpmg.com%2F...%2Fta
xnewsflash%2F...%2Findiajune1'
Stamp Duty (Ministry of Corporate Affairs of India / Every state)
http://www.mca.gov.in/MCA21/dca/efiling/eStamp_rate.pdf
(2) State taxes in Gujarat State
Gujarat State SEZ / Gujarat State website
http://www.sezindia.nic.in/writereaddata/statePolicies/gujaratsezact.pdf
The Gujarat Value Added Tax Amendment Act, 2006 / Tata Consultancy Services
Limited.
http://www.commercialtax.gujarat.gov.in/vatwebsite/Acts/actsMain.jsp?viewPageNo=1
Gujarat abolishes octroi in seven crucial cities / HT Media Ltd
http://www.livemint.com/Politics/ozJcnYcohaaQe6ViSH8qzM/Gujarat-abolishes-octroi-in-se
ven-crucial-cities.html
(3) State taxes in Rajasthan State
Rajasthan State SEZ / Rajasthan State website
http://www.google.co.jp/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8
&ved=0ahUKEwiDwp_9ya_JAhUBv5QKHaQdCksQFgglMAI&url=http%3A%2F%2Fbusi
ness.mapsofindia.com%2Fsez%2Findia%2Frajasthan-special-economic.html&usg=AFQjCN
FECfM31Abxksoh35E2L1pcWSBFeg
Taxation / Bureau of Investment Promotion Rajasthan
http://www.investrajasthan.com/taxation.cms
Electricity Duty in Rajasthan State/ Rajasthan State website
http://rajtax.gov.in/vatweb/download/act/ElectricityDuty.pdf
(4) State taxes in Uttar Pradesh State
Uttar Pradesh State SEZ / Uttar Pradesh State website
http://www.sezindia.nic.in/writereaddata/statePolicies/up_sez_policy_2007_part_a.pdf
The Uttar Pradesh Value Added Tax Act, 2008 / Uttar Pradesh Commercial Taxes
Department
143
http://comtax.up.nic.in/Vat_Act/UPVAT%20SCHEDULE%20Updated%20upto%20dt%2012
-03-2015.pdf
2009 Entry Tax – Alphabetical Rate Of Tax / ntnonline.net
http://ntnonline.net/entry_rate.pdf
(5) State taxes in Tamil Nadu State
Tamil Nadu State SEZ / Tamil Nadu State website
http://www.google.co.jp/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8
&ved=0ahUKEwjT587GyK_JAhUCKJQKHWr5DqQQFggrMAI&url=http%3A%2F%2Fw
ww.mahindraworldcity.com%2Fdocs%2Fchennai%2Fspecial_economic_zones.pdf&usg=AF
QjCNHj4Mstb0nocGyWh_8fziG9PLl-jw
(6) State tax in Karnataka State
Karnataka State SEZ / Karnataka State website
http://www.sezindia.nic.in/writereaddata/statePolicies/state%20policy%20of%20sez%20200
91.pdf
(7) Tax systems in India
Stamp Duty / Propertiesindia.com
http://www.propertiesindia.com/content-resources.php?id=17
Tax and Duty on Electricity bills in India
https://www.bijlibachao.com/electricity-bill/electricity-duty-and-tax-on-electricity-bills-in-in
dia.html
(8) Incentives of Neemrana / Ghiloth Industrial Zones
Information on the industrial zones dedicated to Japan-based companies in
Rajasthan State (Neemrana and Ghiloth) by JETRO dated April 2015
https://www.jetro.go.jp/jetro/overseas/in_newdelhi/rajasthan.html
Information on the Neemrana Industrial Zone in Rajasthan State, India, by JETRO
dated June 2014
https://www.jetro.go.jp/jetro/overseas/in_newdelhi/neemrana/neemrana_201406.pdf#search=
%27%E3%83%8B%E3%83%A0%E3%83%A9%E3%83%8A%E5%B7%A5%E6%A5 %A
D%E5%9B%A3%E5%9C%B0%27
(9) Policies of respective states of India
Maharashtra State : Foreign industries promotion policies 2013 / Maharashtra State
Industrial Development Corporation (MIDC)
http://www.jbic.go.jp/wp-content/uploads/page/2015/08/.../inv_India28.pd
144
Government of Maharashtra Industries, Energy and Labour Department
Government Resolution No.: PSI -2013 / (CR- 54 ) / IND-8: Package Scheme of Incentives –
2013 / Maharashtra State Government
http://foodprocessingindia.co.in / state_pdf/Maharashtra/
PackageSchemeofIncentives2013.pdf#search='Maharashtra+PSI+2013'
Gujarat State: Industrial Sectors Incentives 2013 / State Government
http://ic.gujarat.gov.in/?page_id=2523
Rajasthan State: Rajasthan State Investment Promotion Scheme 2014 / State
Government
http://investrajasthan.com/japanese-zone/policies/rips.pdf
http://investrajasthan.com/japanese-zone/incentives.php
Uttar Pradesh State: Core Industries Investment Policies 2012 / State Government
http://www.upkvib.gov.in/Indl_Policy_English_2012.pdf
Tamil Nadu State: Tamil Nadu Industrial Policy 2014 / State Government
http://ficci.com/SEdocument/.../TN_Industrial_Policy_2014
Karnataka State: Industrial Policy 2014-2019 / State Government
http://www.events.investkarnataka.gov.in/.../industrial-policy
http://www.kpmg.com/.../Karnataka-Industrial-Policy-2014
(10) Tax systems in China
Details of various incentive related to tax systems and foreign capitals / JETRO
https://www.jetro.go.jp/world/asia/cn/invest_04.html
https://www.jetro.go.jp/ext_images/jfile/country/cn/invest_03/pdfs/cn8B010_yuuguu_gyousy
u.pdf
China investment environment series / Japan Bank for International Cooperation
https://www.jbic.go.jp/wp-content/uploads/inv-report_ja/2013/10/12085/jbic_RIJ_2013003.p
df#search='%E4%B8%AD%E5%9B%BD+%E9%80%81%E9%87%91%E7%B5%84%E6%
88%BB%E3%81%97%E5%88%A9%E6%BD%A4%E4%BF%9D%E8%A8%BC%E9%87
%91%E5%88%B6%E5%BA%A6'
Accounting And Taxation For Businesses In China, Yoshio Kondo / published by
the Sososha, a publisher specialized in Chinese books
http://www.mmjp.or.jp/sososha/hon/kaikeizeimu.html
Taxation In China / Kondo Certified Accountant Office
http://homepage2.nifty.com/kondo-cpa/usefull/chinese/taxation/chinese_taxation.html
(11) Tax systems in Thailand
Incentives related to tax systems and foreign capitals / JETRO
https://www.jetro.go.jp/world/asia/th/invest_04.html
https://www.jetro.go.jp/world/asia/th/invest_03.html
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Overview of the tax administration and tax systems in Thailand (Zeidai journal
dated January 2015) / National Tax Agency
https://www.nta.go.jp/ntc/kenkyu/journal/saisin/270130_satou.pdf#search='%E3%82%BF%
E3%82%A4+%E7%A8%8E%E5%88%B6'
Japan-Thailand Economic Partnership Agreement (JTEPA) / Thailand government
Trade Center
http://japan.thaitrade.com/trade/jtapa.html
Thailand Tax booklet 2014 / PWC
https://www.pwc.com/th/e/publications/2014/thai-tax-booklet2014-jp-web.pdf#search='IEAT
+%E8%BC%B8%E5%87%BA%E5%85%8D%E9%99%A4+%E5%9 5%86%E5%93%81
Thai Business Economy handbook / Tokyo Development Consultant
http://133.242.142.95/app/webroot/handbook/
http://www.fact-link.com/handbook_index.php
Asia business information portal website "thai plus one" / Total Coordination of
Life
http://thai-plusone.asia/business/basic/
Basic knowledge of tax of Thailand/Tax accountant Xat
http://www.xat.jp/news/thai_tax25.html
Thailand: Information on BOI's new investment incentive system / Bank of
Tokyo-Mitsubishi UFJ
http://www.bk.mufg.jp/report/insasean/AW20150316.pdf#search='%E3%82%BF%E3%82%
A4+BOI'
Incentives Under The Investment Promotion Act / Thailand Board of Investment
http://www.boi.go.th/index.php?page=incentive&language=en
BOI's Investment Incentives / Organization for Small & Medium Enterprises and
Regional Innovation, JAPAN
http://www.smrj.go.jp/keiei/kokurepo/faq/asean/thailand/051833.html#ttl2
(12) Tax systems in Indonesia
Incentives related to tax systems and foreign capitals / JETRO
https://www.jetro.go.jp/world/asia/idn/invest_04.html
https://www.jetro.go.jp/world/asia/idn/invest_03.html
Investment environment in Indonesia dated April, 2012 / JBIC
http://www.jbic.go.jp/ja/information/investment/inv-indonesia201204
Indonesia Tax handbook 2014 and 2015 / PWC
https://www.pwc.com/id/en/our%20services/japanesebusinessdesk/indonesian-ptb-2014-japa
n.pdf#search='%E3%82%A4%E3%83%B3%E3%83%89%E3%83%8D%E3%82%B7%E3%
82%A2+%E7%A8%8E%E5%88%B6'
146
https://www.pwc.com/id/en/indonesian-pocket-tax-book/assets/indonesian_pocket_tax_book
_2015-jpn.pdf#search='%E3%82%A4%E3%83%B3%E3%83%89%E3%83%8D%E3%82%
B7%E3%82%A2+%E6%B6%88%E8%B2%BB%E7%A8%8E'
A Primer on Indonesian Added Value Tax / KPMG HADIBROTO
https://www.kpmg.com/ID/en/IssuesAndInsights/ArticlesPublications/Documents/A-Primer-
on-Indonesian-Added-Value-Tax.pdf#search='indonesia+VAT+electric+6600'
(13) Make in India web site
http://www.makeinindia.com/search?tag=smart%20city
(14)Number of Japanese companies with business operations in India by state
www.in.emb-japan.go.jp/Japanese/J_cos_list_j_2013_10.pdf
(15)Per capita GFP
http://www.imf.org/external/ns/cs.aspx?id=28
(16)Information on 20 cities
www.india-bizportal.com/jacomp/p21154/
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Chapter 7. Workshop for the promotion of JCM project with local stakeholders
Overview
This project was carried out with constant interaction with Indian side and input from Indian side
was incorporated based interviews and discussion during the team’s visit in November 2015 and
February 2016. A workshop was held on March 9, 2016 to share the final results of the study and
also to promote understating of JCM among Indian government officials and relevant stakeholders.
It was also aimed at getting inputs on the results of this study towards finalization.
The workshop received a wide participation from both Indian side and Japanese side. From Indian
side, nine local government officials from five different agencies attended the workshop together
with SKIL Infrastructure, a local partner of IEEJ. From Japanese side, the workshop received
participation of two consular officers and eleven Japanese business persons in Mumbai, from two
consultant firms, one construction company, two trading companies, and five manufacturing
companies.
During the workshop, IEEJ made presentations of; 1) Concept design of smart community; 2) the
emission reduction potential of smart community and introduction to JCM, and 3) the economic
impacts of the project, followed by remarks by SKIL Infrastructure and Mr. Subhashji Desai, the
Minister of Industry of Maharashtra. Towards the end, we had a free discussion involving all of the
participants.
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Workshop detail
Workshop title: “Feasibility Study of Smart City Development in Navi Mumbai”
Date: March 9, 2016, 13:00 to 16:05
Location: Hotel Oberoi, Mumbai, Maharashtra, India
Schedule Speakers
13:00-13:45
13:45-13:50
13:50-14:15
14:15-14:35
14:35-15:00
15:00-15:15
15:15-15:30
15:30-15:40
15:40-15:55
15:55-16:00
Networking lunch
Opening (Moderator : Y. Yamashita, IEEJ)
Presentation 1
“Proposals for the development of a Smart City in
Navi Mumbai special economic zone (NMSEZ) ”
Presentation 2
“Joint Crediting Mechanism and
CO2 Emissions Reduction Technology for NMSEZ”
Presentation 3
"Economic effects of the diffusion of energy saving
technologies"
Coffee Break
Speech by Mr. Subhashji Desai, the Minister of Industry of
Maharashtra
Comment from SKIL Infrastructure Ltd.
Discussion
Closing
N. Yamamoto
S. Watanabe
S.Suehiro
N. Gandhi
(See the appendix for presentation materials)
Main comments raised during discussion
Energy efficiency at smart community should focus not only technological solutions but
also behavioral solutions. For example, thermostat is adjusted at 28 degrees Celsius during
summer together with promotion of coolbiz (relaxed business dress code for summer time).
This type of behavior change should also be effective in India.
Mr. Subhashji Desai, the Minister of Industry of Maharashtra, stated that the government of
Maharashtra welcomes partnership with Japan. He also stated that the government of
Maharashtra is willing to support this project through various means such as streamlining of
administrative procedure regarding the establishment of SEZ.
Some of the participants were not aware of BEMS as a technology. As the project moves
forward, it is suggested that there needs to be better understanding of technologies among
the stakeholders.
As the advantage of this project, two points were emphasized. First, the land acquisition is
already completed, which is usually the largest challenge in city development in India.
Secondly, development in a greenfield is much easier than retrofitting existing city.
Business side showed a very positive response to JCM as they would welcome any such
149
scheme that promotes technology transfer to India and carbon footprint has become
increasingly important for the business.
Scenes at the workshop (Left: Minister Desai. Right: Overview of audience)