Industrial Entrepreneurs Memorandum (IEM): Who Must File, and How to Do It on NSWS

Guidance by StartupFlora · Last updated: October 2026

If you are reading about the Industrial Entrepreneurs Memorandum, there are two things most guides on this topic currently get wrong, and both will waste your time.

The first is the portal. IEM filings moved from the DPIIT G2B portal to the National Single Window System (NSWS) in October 2025, and old G2B login credentials do not carry across. Pages still telling you to log in at the G2B portal are sending you somewhere that no longer accepts the application.

The second is the threshold. Many pages still quote ₹10 crore for manufacturing and ₹5 crore for services. Those figures are long out of date. IEM applies to industrial undertakings that sit above the MSME ceiling, and that ceiling was revised on 1 April 2025 to ₹125 crore of investment and ₹500 crore of turnover.

This guide covers what an IEM actually is, who has to file it and who does not, the difference between Part A and Part B, what each form asks for, the fee, and the amendment process when your project changes.

Industrial Entrepreneurs Memorandum: Quick Details

What Is an Industrial Entrepreneurs Memorandum?

An Industrial Entrepreneurs Memorandum is a declaration filed with DPIIT by an industrial undertaking that intends to manufacture in India and is exempt from industrial licensing.

The logic behind it goes back to the Industries (Development and Regulation) Act, 1951. Under that Act, setting up an industrial undertaking originally required a licence. Successive rounds of liberalisation delicensed most sectors, but the government still wanted a record of who was investing in what and where. The IEM is that record.

So an IEM is not permission. It is an acknowledgement. You file the memorandum, and the system issues an acknowledgement with a number. There is no departmental discretion to refuse it if your sector is delicensed and the form is complete.

What it is not

It is not a factory licence, a pollution consent, a GST registration or a building approval. Those are separate and still required. An IEM acknowledgement tells the central government that your industrial undertaking exists and what it intends to produce. It does nothing about the state and local approvals that let you actually operate.

Who Must File an IEM, and Who Should Not

This is where most applicants go wrong, so it is worth being precise.

The threshold, as it now stands

The revised MSME classification took effect on 1 April 2025:

An undertaking that exceeds ₹125 crore of investment and/or ₹500 crore of turnover falls outside the MSME definition. That is the population IEM is meant for. Below it, your registration is Udyam, and filing an IEM instead is simply the wrong form.

Why the old figures persist. The ₹10 crore and ₹5 crore numbers circulating online date from an earlier small-scale industry definition. They have been superseded more than once. If a consultant quotes them to you in 2026, they are working from stale material.

Sectors still under compulsory licensing

A short list of industries remains reserved for compulsory industrial licensing and cannot use the IEM route. These broadly cover defence equipment, certain hazardous chemicals, industrial explosives, and tobacco products. If your product sits in one of these, you need a licence, and an IEM acknowledgement will not substitute for it. Confirm your product classification with DPIIT before assuming the delicensed route applies.

IEM Part A vs Part B

These are two separate filings at two different stages of the same project, and confusing them is the most common filing error.

Part B is not a second Part A. It is a report of the actual position: the date commercial production started, the capacity actually achieved, the investment actually made and the employment actually created. Filing it with your original projections repeated back is the error the department is specifically looking for.

Many units file Part A, start production, and never file Part B. That leaves the record incomplete, which matters when you later apply for incentives, state subsidies or any approval where DPIIT records are checked.

What IEM Part A Asks For

Sector Details

The industrial sector, the applicable NIC code and a clear description of the item or items you propose to manufacture. Get the NIC code right, because it carries through to other registrations.

Capacity Planned

Proposed annual production capacity for each item, stated in the appropriate unit of measure. This is a projection, and Part B later records what you actually achieved against it.

Investment Figure

Proposed investment in plant and machinery or equipment. This is the figure that determines whether you belong in the IEM population at all, so it should reconcile with your project financials.

Employment Estimate

Expected direct employment the unit will generate once operational, along with projected annual turnover. Both are estimates at this stage and are revisited in Part B.

GST and Location

GST registration details for the manufacturing location, plus the full address of the proposed unit. The GST detail ties your IEM record to a verifiable business identity.

How to File an IEM on NSWS

Create Profile

Register at nsws.gov.in and create a fresh user profile. Credentials from the old DPIIT G2B portal do not carry over, so even an existing IEM holder needs a new NSWS account.

Find Approval

Inside NSWS, go to Central Approvals and select Industrial Entrepreneur Memorandum. NSWS carries over 325 central approvals, so search rather than scroll through the list.

Complete Part A

Fill in sector, NIC code, item description, proposed capacity, investment, employment, turnover and GST details for the manufacturing location. Check the NIC code against your actual product before submitting.

Pay and Submit

Pay the ₹1,000 Part A fee online and submit. The acknowledgement is auto-generated under a self-declaration workflow, so there is no departmental approval step to wait on for a delicensed sector.

Save Acknowledgement

Download and store the IEM acknowledgement with its number. You will need it for state incentive applications, certain tenders, and any later amendment or Part B filing.

File Part B

Once commercial production actually begins, return to NSWS and file Part B with the real production start date, actual capacity, actual investment and actual employment. There is no fee for Part B.

Documents Required for IEM Filing

Entity Papers

Certificate of incorporation or partnership deed, PAN of the entity, and the authorisation or board resolution naming the person who will file and sign on the company's behalf.

GST Registration

GST registration certificate for the manufacturing location specifically, not merely the registered office, since NSWS ties the IEM record to the unit's own GST identity.

Project Details

A description of items to be manufactured with the matching NIC code, proposed capacity, and the investment figure for plant and machinery supported by your project cost workings.

Site Information

Full address of the proposed industrial unit including district and state, since IEM data feeds state-level industrial statistics and incentive eligibility.

Benefits of Filing an IEM

Formal Recognition

The acknowledgement is the central government's record that your industrial undertaking exists and what it produces. Several state incentive schemes and tender processes ask for it directly, and without it the application stalls at the eligibility stage.

Scheme Eligibility

State industrial policies and sector incentive schemes frequently reference IEM-acknowledged units. If you are mapping what your project qualifies for, our guides to industrial subsidies for food processing, textiles, EV and automotive and pharma and health set out what each sector can claim.

No Licence Needed

For a delicensed sector the IEM replaces an industrial licence entirely. There is no discretionary approval, no waiting on a committee and no scope for refusal on a complete filing, which is a meaningful difference from the pre-liberalisation regime.

Clean Record

A unit with both Part A and Part B on file has a complete central record of its investment and production. That matters at the point someone verifies your claims, whether a lending bank, a state incentive office or a procurement authority.

Planning Clarity

The filing forces you to fix your NIC code, capacity, investment figure and location before you build. Those are the same inputs your funding and approval applications will need, so doing the work once saves repeating it.

Mistakes to Avoid

Wrong Portal

Filing attempts still begin at the old DPIIT G2B portal because older guides point there. Since October 2025 the filing lives on NSWS, and G2B credentials do not transfer to it.

Wrong Threshold

Applicants below the MSME ceiling file an IEM when they should be registering on Udyam. The IEM population sits above ₹125 crore investment or ₹500 crore turnover, not above ₹10 crore.

Skipping Part B

Part A is filed, production starts, and Part B never happens. The record stays at intention stage, which creates problems whenever DPIIT data is checked against your actual operations.

Treating It as a Licence

An IEM acknowledgement is not a factory licence, pollution consent or building approval. Units that treat it as blanket permission to operate discover the gap at inspection, not before.

Costs and Fees

The statutory cost is negligible. What the filing actually consumes is accuracy: getting the NIC code, capacity and investment figure right the first time, because each later correction is an amendment that has to reconcile with your corporate records, GST registration and project documents.

Amending an IEM

Projects change. Capacity gets revised, items get added, addresses move. The route is the IEM Part-A Amendment Application on NSWS.

The practical advice here matters more than the procedure. Before filing an amendment, reconcile the revised details against your existing acknowledgement, your corporate records, your GST registration and your project documents. Amendments that do not match the surrounding paperwork create a record that contradicts itself, and that inconsistency surfaces later during incentive verification rather than at the time of filing.

Frequently Asked Questions

What is an Industrial Entrepreneurs Memorandum? It is a declaration filed with DPIIT by an industrial undertaking that intends to manufacture in India and is exempt from industrial licensing. It is an acknowledgement rather than a permission, issued under the Industries (Development and Regulation) Act, 1951.

Who needs to file an IEM? Industrial undertakings above the MSME ceiling, in delicensed sectors. Following the revised classification from 1 April 2025, that means enterprises exceeding ₹125 crore in plant and machinery investment and/or ₹500 crore in turnover. Below that, you register on Udyam instead.

Where do I file an IEM in 2026? On the National Single Window System at nsws.gov.in, under Central Approvals. IEM filing moved there from the DPIIT G2B portal in October 2025, and old G2B credentials do not work on NSWS.

What is the difference between IEM Part A and Part B? Part A is filed before production and records what you propose to do. Part B is filed after commercial production begins and records what actually happened, including the real start date, capacity, investment and employment.

What is the fee for IEM registration? ₹1,000 for Part A. Part B carries no fee.

Is IEM mandatory? For an industrial undertaking above the MSME threshold in a delicensed sector, yes, it is the prescribed filing. For an MSME, it is not applicable, and Udyam registration is the correct route.

Is an IEM the same as an industrial licence? No. An industrial licence is required for the small set of sectors still under compulsory licensing, such as defence equipment, certain hazardous chemicals, industrial explosives and tobacco. For everything else, the IEM replaces it.

Do I still need other registrations after filing an IEM? Yes. The IEM is a central record of your industrial undertaking. Factory licence, pollution control consent, fire safety clearance, GST registration and local approvals are all separate and still required.

Can an IEM be amended? Yes, through the IEM Part-A Amendment Application on NSWS. Reconcile the revised details with your existing acknowledgement, corporate records and GST registration before filing so the records do not contradict each other.

What happens if I never file Part B? Your record remains at intention stage with no evidence of actual production. This causes problems when DPIIT records are checked for state incentives, sector schemes or procurement eligibility.

Which NIC code should I use for the IEM? The code matching your actual manufactured product. Our NIC code finder will help you locate it, and getting it right matters because the same code carries into your other registrations.

Conclusion

An Industrial Entrepreneurs Memorandum is a record, not a permission, and it applies to industrial undertakings above the MSME ceiling in delicensed sectors. Part A declares what you intend to build and costs ₹1,000. Part B reports what you actually built and costs nothing.

The two things worth getting right are the portal and the threshold. The filing lives on NSWS, not the old G2B portal. And if your investment is under ₹125 crore and your turnover under ₹500 crore, you are an MSME and the IEM is simply the wrong form.

Quick Action Checklist

1. Check your investment and turnover against the revised MSME limits to confirm IEM applies to you at all.
2. Confirm your sector is delicensed and not on the compulsory licensing list.
3. Create a fresh NSWS account, since G2B credentials do not transfer.
4. Fix your NIC code before filing, because it carries into every later registration.
5. Diarise Part B for the date commercial production starts, since this is the step most units forget.

If You Are Close to the MSME Ceiling

This is worth thinking about before you file anything.

An enterprise sitting just under ₹125 crore of investment or ₹500 crore of turnover is an MSME, with access to Udyam-linked benefits including collateral-free credit guarantees, the 45-day payment protection and MSE purchase preference in government tenders. Cross the line and those fall away, replaced by the IEM route and whatever your sector's large-industry incentives offer.

That transition deserves planning rather than discovery. If your projections put you across the threshold within two or three years, model what you lose as well as what you gain, and time the expansion accordingly.

Before You Rely on This Page

Portals, thresholds and the compulsory licensing list change by notification. The NSWS migration is recent, the MSME classification was revised in April 2025, and sector lists are amended periodically.

Confirm the current position on nsws.gov.in and with DPIIT before filing, particularly whether your specific product sits in a delicensed sector. Where this page and the department disagree, the department is right.

Get Help From StartupFlora

For help confirming whether IEM or Udyam applies to your project, fixing the right NIC code, completing the NSWS filing, or mapping which state and sector incentives your industrial unit qualifies for, talk to the StartupFlora team.