IEM Part A versus Part B
| Item | Part A | Part B |
|---|---|---|
| Purpose | Intent to establish a unit, substantially expand or manufacture a new article | Report that commercial production has started |
| When to file | Before or at the time of setting up the unit | After commercial production begins |
| Fee | ₹1,000 | Nil |
| Key details | Location, proposed investment, products, employment, capacity | Actual date of commencement and actual investment, matched with Part A |
| Outcome | Acknowledgement of Part A | Acknowledgement of Part B |
Key Takeaways
- IEM applies to industrial undertakings that are exempt from industrial licensing and are generally larger scale units, while small units register on Udyam instead.
- Part A declares the intention to establish the unit, or to carry out substantial expansion or manufacture a new article, and Part B reports commencement of commercial production.
- The IEM is a self-certification. DPIIT does not appraise the project before issuing the acknowledgement, and the filing does not exempt the entrepreneur from other statutory approvals.
- The Part A fee is ₹1,000 and there is no fee for Part B.
- IEM filing now happens on the National Single Window System, and credentials from the older G2B portal do not carry over, so existing holders may need a fresh NSWS account.
- Common errors include treating IEM as a one-time filing, never filing Part B after production begins, and showing an investment figure in Part B that does not match Part A.
What an IEM is
- Under the Industries (Development and Regulation) Act, 1951, only a short list of industries needs an industrial licence. Every other industrial undertaking is exempt from licensing, but the Government still wants to know about new large units and major expansions. The Industrial Entrepreneurs Memorandum is how those exempt units inform DPIIT.
- For a de-licensed sector the IEM replaces the industrial licence for practical purposes, but it is an information filing, not a permission. The entrepreneur still needs environmental, factory, state and local approvals separately.
Who needs to file an IEM
- A new industrial undertaking that is exempt from industrial licensing and falls outside the micro, small and medium category
- An existing exempt unit planning substantial expansion
- A unit proposing to manufacture a new article that is not covered by its existing registration
- An MSME that has graduated into a large scale industry
- Not required for micro, small and medium enterprises, which register on the Udyam portal, and not the right form for industries that actually need an industrial licence
Documents usually needed
- Certificate of incorporation, MOA and AOA, or partnership deed of the entity
- PAN and GST details of the entity
- Details of the proposed or existing location and the investment plan
- List of products or articles to be manufactured, with relevant industry codes
- Authorisation for the person filing, such as a board resolution or authority letter
- For Part B, the Part A acknowledgement and proof of the commencement date
How to file an IEM on NSWS
- Create or log in to your account on the National Single Window System at nsws.gov.in.
- Open Central Approvals and select Industrial Entrepreneur Memorandum.
- Choose IEM Part A, fill in the online form and upload the documents.
- Pay the ₹1,000 fee online and submit to receive the Part A acknowledgement.
- After production starts, select the earlier Part A filing, choose File Part B and submit the commencement details at no cost.
- File an amendment on the same portal if details such as investment or product line change, keeping the changes consistent with the original intent.
Why IEM matters in practice
- The IEM acknowledgement is commonly asked for when applying for state industrial incentives, certain tenders, bank project finance and approvals from other departments. Skipping Part B can create problems later, because the record will show that the unit never reported commencement. Keep copies of both acknowledgements with your project file.
Frequently Asked Questions
What is an Industrial Entrepreneurs Memorandum?
It is a self-declaration filed with DPIIT by industrial undertakings that are exempt from industrial licensing to inform the Government about their setup or expansion.
Who must file an IEM?
Exempt industrial undertakings outside the MSME category that are setting up a new unit, carrying out substantial expansion or manufacturing a new article must file it, while MSMEs register on Udyam.
What is the IEM filing fee?
The fee for Part A is ₹1,000, and there is no fee for Part B.
Is an IEM the same as an industrial licence?
No, an IEM is a self-declaration for exempt industries, while an industrial licence is a permission needed only for the small list of industries that remain licensed.
Does IEM approval replace other clearances?
No, filing an IEM does not exempt the entrepreneur from environmental, factory, state or other statutory approvals.
Where is the IEM filed now?
It is filed online on the National Single Window System, and older G2B portal credentials do not carry over to NSWS.
Setting up a manufacturing unit?
Getting IEM, GST, factory, environmental and state approvals in the right sequence saves months. Book a free consultation with Growthora and we will handle your IEM Part A and Part B filings and the related approvals.
Next step
Apply this to your business.
Confirm whether this applies to your legal structure, industry classification, and credit history - in under 30 minutes with an advisor.