High Priority Sectors

Bihar, fundamentally an agrarian economy, has a large agricultural and animal production base offering abundant supply of raw material to be processed for human consumption. Despite these natural advantages, the level of food processing is very low and there is scope to improve the food processing levels to meet the increasing requirements of the state‘s growing population, while at the same time offering a sustainable consumption market. Further, the rising income and changing life style in the cities as well as rural Bihar is changing the consumption demand towards processed food. Therefore, the state offers a substantial opportunity for the food processing industry and is expected to play a leading role in the industrialization drive of this state.

FOOD PROCESSING (खाद्य प्रसंस्करण)

Some of the strategic advantages in this sector across key product offerings are listed below.

Key Agro Produces Our Strategic Advantage
Food-grains (Cereals and pulses) and oilseeds
  1. The production level of cereals in the state has grown annually at 5.65% in the last 5 years i.e. 2010-11 to 2014-15.Total cereal production of the state was 143.21 lakh tonnes in 2014-15which is one of the largest in the country.
  2. Some of the major products of the state are-Rice: 82.41 lakh tonnes; Wheat: 35.70 lakh tonnes; Maize: 24.78 lakh tonnesPulses:4.28 lakh tonnes; and Oilseeds: 1.27 lakh tonnes.1
  3. Bihar has the highest maize productivity amongst all the Indianstates.
Fruits (Mango,Guava, Litchi And Banana)&Vegetable (Potato, Cabbage, Cauliflower, Okra)2
  1. Bihar ranks first among all the Indian states in terms of vegetable production. The Totalvegetableproductioninthestatewas144.99lakhtonnesin2014-15.
  2. Some of the major vegetables produced in the state are Potato: 63.46 lakh tonnes; Onion: 12.47 lakh tonnes; Cauliflower: 10.03 lakh tonnes; and Tomato: 10.46 lakh tonnes. Other vegetables such as cabbage, okra, carrot, and pea are also grown in the state which can be used for commercial processing.
  3. Some of the major fruits produced in the state are-Banana: 15.27 lakh tonnes;Mango:12.72 lakh tonnes;Guava:3.7lakhtonnes;andLitchi: 1.98lakh tonnes.
  4. The state is well known- in India and in international markets - for its litchi produce, which presents a potential opportunity to set up units for litchi pulp, juice, pulp slab, nectar, jam, jelly, etc.
  1. Makhana/GorgonNutisanexclusiveofferingofthestateandhasastrongpotential to be placed in the wellness food category and can fetch premium pricing if marketed, appropriately.
  2. Makhana/ Gorgon Nut is quite nutritive and compares well with fish/ mutton in terms of protein content. In China, raw Makhana seed powder is considered to be an essential ingredient of baby food.
Animal Products(Milk, Meat, Fish, Eggs, Honey)
  1. The total livestock population in the state is 329.38 lakh and it is expected togrow significantly3.
  2. Approximately 52% of the total livestock population is that of milch animals, with a cow population of 122.31lakh, goat population of 121.53 lakh and buffalo population of 75.67lakh.
  3. Milk is one of the most important food product of the state with an average production of 79.172 lakh tonnes/ day, and this presents a sizeable processing opportunity
  4. Large population of buffalo, goat and poultry presents a significantly large opportunity for meat processing
  5. The state has a total water area of 10, 71, 000 hectares or 26, 77, 000 acres. This includes ponds (95,000 hectares), oxbow lake (9,000 hectares), reservoirs (26,000 hectares) and wetland (9.41 lakh hectares). The total river length in the state is approximately 3,200 km. The huge water wealth of the state presents gainful opportunity for fresh fish processing facilities/units. In 2014-15, the average fish production in the State from various water bodies was 5 lakh tonnes/annum.
  6. Bihar is the 4th largest producer of honey in the country and produces approximately 6,500 tonnes per annum. Honey is becoming an important ingredient in today‘s world and is placed in the wellness food category. This product has the potential to be the first choice amongst the 1st generation entrepreneurs due to low investment requirement and higher revenue potential.

Priority sectors in the food processing sector

The food processing units discussed below shall be considered under the priority sectors for the purpose of availing the incentives under this policy.

Sectors Investment Opportunities
Food-grain (Cereal and pulses) and oil seed processing
  1. Maizeprocessingunitswithinstalledcapacityofmorethan100TPD,including units for manufacturing starch and cattle and/or poultry feed
  2. Any other cereal processing/flour/starch/dough mixes, breakfast food manufacturing unit with installed capacity more than 100TPD.
  3. Pulses processing unit
  4. Modern unit for oilseeds processing or extraction from raw materials obtained locally; like Vanaspati oil manufacturing from rice bran and vegetables like soya- bean, safflower/sunflower, mustard, ground nut, etc. as well as fats and oils extracted from bovine/sheep/goat/fish/marine animals, etc. Unit for solvent extraction for edible oils with or without integrated refining facility.
Note:Processing units purely for sorting, cleaning, and packaging that do not generate any substantial value addition shall not be considered under the priority sector.
Fruits &Vegetable (F&V) Processing
  1. All kinds of F&V processing units (including units for manufacturing dehydrated and Frozen F&V items using IQF/Blast Freezer/Spiral Freezer, etc.)
  2. Dehydration and powdering of vegetables like onions, mushrooms, etc.
  3. Unit for processing litchi (e.g. units for manufacturing litchi pulp, juice, pulp slabs, jam, jelly, beverage, nectar, candies, powder, etc.)
  4. Unit for processing local variety of mangoes into pulp, juice, pulp slabs, jam, jelly, beverage, nectar, candies, powder, etc. (units using mango pulp imported from other states or countries shall not be considered under the priority sector.)
  5. Unit for banana processing (e.g. banana chips, pulp, powder, baby food, jam, jelly, banana flower vegetables, banana trunk vegetables & pickles,etc.)
  6. Unit for makhana processing (e.g. unit for producing makhana pops, making flavoured and/or roasted makhana snacks, RTC kheer, baby foodetc.)
Milk Processing and Dairy Product Manufacturing
  1. Milkprocessingunitswithinstalledcapacitiesofmorethan50thousandslitersper day
  2. Units for manufacturing pasteurized milk, milk powder , ice cream powder, condensed milk, infant food, milk cream, butter, butter milk, lassi, yogurt, cheese, ghee, khoya, ice-cream, kulfi, flavored milk and other dairy products.
  3. Units that manufacture products out of milk powder imported from other states or countries shall not be considered under the priority sector. Only products manufactured from milk procured or milk powder manufactured by another unit within the state shall be considered under the priority sector.
Note: For consideration under the priority sector, procurement of milk by the units shall not be carried out in areas where dairy co-operatives formed by COMFED are already in operation.
Honey Processing Natural honey processing unit.
Meat, Poultry and Fish Processing
  1. Meat,poultryandfishprocessingunits(e.g.fresh,chilled,andfrozenfish;fish fillets and pieces; fish cured or smoked and fish meal fit for human consumption; fresh and chilled meat of bovine animals such as sheep or goat; meat & edible offal of poultry meat; dried eggs; etc.)
  2. Modern slaughter house &abattoir
Spice and herbs Processing
  1. Modern processing unit for spices (for e.g. extracts essence & concentrates of spices,Powder and paste manufacturing etc.)
  2. Unit for extraction of food flavors, colors, oleoresins,etc.
  3. Health and wellness food supplements made from herbs
Tea Processing Modern tea processing units
Other edible preparation
  1. Modern unit for manufacturing of biscuits/ cookies, etc.
  2. Modern bakery unit (e.g. bread, pastries and cakes manufacturing)
  3. Modern unit for manufacturing ice-cream
  4. Modern unit for manufacturing chocolate & non-chocolate based confectionery items
  5. Unit for manufacturing of frozen or non-frozen and packaged ready to eat (RTE) meals and snacks, ready to cook (RTC) food, powdered energy concentrate, instant drink concentrate, etc.
Sugarcane Processing
  1. Manufacture of sugar
  2. Manufacture of sugar
  1. Fruit ripening chambers
  2. Controlled atmosphere (CA)/modified atmosphere (MA) chambers, coldrooms/ deep freezers/ pre-cooling chambers
  3. Multiple cold storage facilities/infrastructure including pre-cooling chambers, ripening chambers, CA/MA chambers, cold rooms, deep freezers, bulk chillers, etc. including cold chain logistic arrangements
  4. Modern grain silos
General/ Business Development Services
  1. Research &development facilities, quality control laboratories/ testinglaboratories,training / incubation centres/skill development centres, etc. related to the food processing sector
  2. Food machinery manufacturing
  3. Irradiation unit


  1. The above list of units/ enterprises is only indicative and the State Government may suitably revise the list under the priority sector from time to time.

  2. Units/ enterprises set up for the purpose of packaging/ repackaging of food items imported from other states or countries shall not be considered under the priority sector.

  3. If a unit/ enterprise is setting up two or more kinds of facilities in an integrated manner/for captive use purpose, the facilities would be treated as a single project and combined cost of the facilities would be considered for grant calculation purposes. The classification of the units/ enterprises into priority or non- priority would be as per the nature of the main/mother facility, i.e. the core facility.

  4. In case a unit migrates from non-priority sector to priority sector through capacity expansion and/or facility addition etc., it would enjoy the incentives as per the priority sector for the portion that falls under the priority sector.

  5. Units for manufacturing any food item fit for human/ animal consumption which does not contain any grain, F&V or any processed/preserved items (like pulp concentrate, extract .) made from grain/F&V as its main ingredient would be considered under the non-priority sector.

  6. Unit established for processing of by-products of the main food processing facility will be considered for a grant under the non-priority sector if the end product resulting from the processing of the by-product is not a food product fit for human/ animal consumption (with any exceptions defined above). If the final product is fit for human/ animal consumption it would be categorized as per the above list.

LEATHER SECTOR (चमड़ा क्षेत्र)

Leather sector has a massive potential for employment, output growth and export. In India, the sector is one of the top foreign exchange earners. Bihar has a huge potential for investment in the leather sector. On account of large raw material base (in terms of hides and skins produced in the state), plenty of cheap as well as skilled and semi-skilled labour, and a huge domestic market for consumption, it offers both comparative and competitive advantage to a prospective investor in this sector.

The leather industry mainly includes units that are involved in production of finished or semi-finished leather and manufacturing of various kinds of leather goods. The state govt. has a clear focus to promote all the facilities in the value chain, from raw material processing to finished-goods manufacturing.

Our strategic advantages in this sector across factors of production are as follows:

Key Factors Our Strategic Advantage
Availability of Raw hides and skins
  1. Biharhasapproximately8%ofthecountry'stotalbovinepopulation.Accordingto thelivestockcensusof2012,thetotallivestockpopulationinBiharwas329.38lakh. Asperthecensus,thecowpopulationwas122.31lakhandthatofbuffalowasapprox. 75.67lakh.Thegoatpopulationstoodat121.53lakh.Biharaccountsfornearly12%of thecountry'stotalgoatpopulation,ranked3rdinthecountry.Thesefigureswill improvewhenanewcensuswouldtakeplacein2017.
  2. According to a recent survey conducted by the Central Leather Research Institute (CLRI), Chennai, Bihar annually produces 2.64 million bovine hides and 5.09 million bovine skins. The state is known for best quality goat skins, cow hides and buffalo‘s calf skins. Goat skins are smaller in size and the best material for the production of glazed kid‘s leather products, which are mostlyexported.
  3. According to a rough estimate, 3 trucks loaded with 7-8 thousand pieces of goat skins and 2-3 thousand pieces of cow hides are transported from Muzaffarpur to other destinations, daily. The leather units in the state export raw materials to Kolkata, Kanpur and Chennai, depriving Bihar of thebenefits.
Availability of Labour
  1. Leatherindustryisahighlylabourintensiveindustry.Thesmallscale,cottageand Artisan sectors account for over 75% of the total production from this industry and a majority of them belong to the unorganized sector. The main strength of these unorganized small cottage units has been the availability of the cheap labour, mostly from the weaker sections of the society. Women employment is predominant in leather industry with about 30% share.
  2. Bihar, on account of its large, growing population is one of the largest labour base in thecountry.
  3. At present, there are existing pockets in the state, in the districts of Patna, Gaya, Nalanda/ Biharsharif, Muzaffarpur, etc. where artisans are involved in the production of leather footwear. Thus, there is availability of skilled labour who can be readily employed in the leatherunits.
Availability of Domestic Market Almost all the goods produced by the leather sector are daily use items. Thus, the Consumption rate of these products is very high. The large population of Bihar comprising of growing middle class, in both urban and rural areas, creates a significant local demand for the products. A leather unit established in the immediate neighbourhood of such big markets would, therefore, enjoy both the advantage of scale and costcuttings.

Priority sectors in the leather sector

The following kinds of facilities/ units would be considered as under the prioritysectors:

Sectors Investment Opportunities
Manufacturing of leather products
  1. Manufacturing of leather shoes, leather chappals, and other footwear items of leather
  2. Manufacturing of leather footwearcomponents
  3. Manufacturing of leather garments
  4. Leather forupholstery
  5. Manufacturingofleathergoods(fore.g.labels,tags,belts,bags,purseshand gloves & other accessories and fashion items)
  6. Manufacturing of upholstery for automobile (cars, etc.) &furniture
  7. Manufacturing of saddlery and harnessitems
Storage/ warehousing Modern warehouses for storage of raw hides and skins with or without temperature control/ refrigeration arrangements, finished and semi-finished leather and other leather goods
BusinessDevelopment Services R&D facilities, design studios/ facilities for prototyping, quality testing, labs, etc.

Note: The above list of units/ enterprises is only indicative and the State Government may suitably revise the list under the priority sector from time to time.

Apart from these, the GoB would strive for the promotion of rural technologies developed by CSIR-CLRI. Units using these technologies would be treated as a priority sector for incentivising purposes. Following is the list of important rural technologies developed by the CSIR-CLRI.

  1. Leather Mojari/Jooti footwear
  2. Leather Kolhapurifootwear
  3. General footwear(shoes)
  4. Leather footwear(sandals/chappals)
  5. Leather puppetsmanufacturing
  6. Leathergoods
  7. Leatherboard
  8. Collection of fallen carcasses and theirutilization

Note: The above list is only indicative and the State Government may take suitable decision with regard to inclusion of any other kind of technology in the list.

TEXTILE & APPAREL SECTOR (वस्त्र क्षेत्र)

The textile sector plays a key role in the Indian economy by way of significant contribution to GDP, manufacturing output, employment generation, and export earnings. The sector contributes 14% to industrial production, 4% to India‘s GDP and constitutes 13% of the country‘s export earnings. The textile sector is one of the largest source of employment generators in India; it employs over 4.5 crore people, directly.

Bihar has ample potential to house textile units and other value chain activities. Silk is the focus product in Bihar, for textile units. Bihar has been famous for the production of silk. Bhagalpur district of Bihar has been a centre of silk fabric manufacturing. Tassar silk of Bhagalpur is an exclusive product of Bihar which has the potential to fetch premium prices. Bihar had produced around 60 tonnes silk during 2014-15.

Jute is another fibre product produced in the state. Bihar produced around 1420 thousand tonnes of jute in 2014-15. A jute park is being establishing in Maranga, Purnea with an investment of INR 42.36 crore, by registered SPV M/s Punrasar Jute Park Ltd. Under PPP mode, the State Government has provided 44.30 acres' land as equity and INR 2 crore as a grant. In the jute park, at present, two units' M/s Tirupati Commodities Private Ltd. & M/s Punrasar Jute Park Training Centre have been established and are functional. They are producing jute yarn, jute twin, jute cloths and other jute products.

There are 14,000 power-looms in Bihar concentrated mainly in Bhagalpur, Gaya, and Banka districts. Their main products are staple chadar/bed sheets, furnishing clothes, etc. There is a training centre at Nathnagar (Bhagalpur), run by the Ministry of Textiles, where 120 power-loom weavers are trained each year.

Textile industry is a highly labour-intensive industry. Bihar is home of around one lakh weavers for whom manufacturing and dealing with fabric and garment is their livelihood. The presence of weaver's community is, therefore, an important asset base in terms of availability of skilled and semi-skilled workers for textile units. Apart from the regular weaver community, a large number of youths (especially, the female youth) in the state can be employed in the textile manufacturing units which can offer conducive employment opportunities such as sewing, stitching, cutting, and other tailoring requirements.

Priority sectors in the textile sector

The priority sectors for investment identified by the State Government in this sector are as follows:

Sectors Investment Opportunity
Fibre Production/ Spinning/ Weaving/ Knitting/ Processing
  1. Cotton/ jute/ silk / banana and other natural fibreproduction
  2. Production of man-made fibre andfilament
  3. YarnSpinning
  4. Power loom and knitting
  5. Yarn and fabric processing
Production of apparel and home textile
  1. Woven and knitted apparelmanufacturing
  2. Hosiery products manufacturing
  3. Saree
  4. Carpets and other home textiles
Manufacturing of Technical textile Production of items under following categories:
  1. Agrotech (agriculture, horticulture and forestry etc.)
  2. Buildtech (building and constructionetc.)
  3. Clothtech (technical components of shoes and clothingetc.)
  4. Geotech (geo-textiles and civil engineering etc.)
  5. Hometech (components of furniture, household textiles & floor coveringsetc.)
  6. Indutech (filtration, cleaning and other industrial usageetc.)
  7. Meditech (hygiene and medical etc.)
  8. Mobiltech (automobiles, shipping, railways and aerospaceetc.)
  9. Oekotech (environmental protectionetc.)
  10. Packtech (packagingetc.)
  11. Protech (personal and property protectionetc.)
  12. Sporttech (sport and leisureetc.)
Post Processing of Handlooms and Khadi Textile Products Post production facilities using the handloom and khadi cloth

Note: The above list of units/ enterprises is only indicative and the State Government may suitably revise the list under the priority sector from time to time.

HARDWARE MANUFACTURING (हार्डवेयर विनिर्माण क्षेत्र)

Globally, the IT & ITeS industry, along with the hardware manufacturing sector, is the largest and fastest growing industry in the world. It is expected to reach around USD 2.4 trillion by 2020. The demand in the Indian market is poised to reach more than USD 400 billion by 2020. The importance of IT/ITeS sector is not that of a standalone sector, rather as an integral part of other industries. It has a significant penetration in to all walks of life. It has been established now that the growth in IT/ITeS sector would spur further growth in the fields of agriculture, education, healthcare, energy, telecommunication, rural development, tourism, textile, etc. The sector is yet to take off and move in the desired direction with a pace that offers potential for many entrepreneurial ventures and start up units. The availability of educated youth and cheap labour in the state pose a clear advantage to the investment in this sector, in the state. The State Government's has also notified land for two IT Parks at Bihta (Patna) and Rajgir.

Priority sectors in the IT, ITeS, electrical and electronic hardware manufacturing sector

The priority sectors for investment identified by the State Government in this sector are as follows:

Sectors Investment Opportunity
IT & IT enabled Services
  1. IT products, Software andservices
  2. ITeS such as back office operation/ business process outsourcing (BPO)/ knowledge process outsourcing (KPO), call centres, digital content development / animationetc.
Electronic Hardware Manufacturing
  1. Computers
  2. Computer peripherals and other officeequipment
  3. Server and storagedevices
  4. Networking
  5. Automotiveelectronics
  6. MedicalElectronics
  7. IndustrialElectronics
Other Electronics Manufacturing
  1. Mobiles, DTH, televisions, radios and consumerelectronics.
Electrical Goods
  1. Motors, pumps, fans, consumer durables, UPSetc.

Note:The above list of units/ enterprises is only indicative and the State Government may suitably revise the list under the priority sector from time to time.