Investing in Assam State, India

Posted by Written by Archana Rao Reading Time: 8 minutes

We profile the investment climate of Assam, the largest state in India’s Northeast region, and an emerging semiconductor manufacturing base.

Assam, the largest state in India’s northeast region, spans 78,438 square kilometers and has a population of approximately 35.8 million. Often lauded for its natural beauty, the state’s geography is shaped by the Brahmaputra River, also known as ‘Lohit’.

Despite its picturesque landscapes and rich biodiversity, Assam’s economic progress has been rather limited. Efforts to boost economic growth and improve the state’s image have included organizing trade expositions and implementing industrial promotion policies, supported by initiatives from the federal government. 

It is hoped that with the state will be able to attract more investment following the Tata Group’s commitment to set up an INR 270 billion semiconductor assembly and test facility at Jagiroad in central Assam’s Morigaon district.

Given its geographic position, extensive international borders, and proximity to the Association of Southeast Asian Nations (ASEAN), Assam has the potential to become the hub of economic activity in the  northeast region as well as trade with neighboring Bangladesh, Bhutan, and Nepal (BBN).


Infrastructure development is a focal point for the state, and major projects include the construction of bridges over the Brahmaputra and infrastructure upgrades to facilitate connectivity and trade.

The state’s proximity to some of the SAARC (South Asian Association for Regional Cooperation) countries, such as Bangladesh, Bhutan, and Nepal, offers further investment potential, bolstered by the presence of industrial estates and growth centers here.

A series of development initiatives worth INR 116 billion (US$138.9 million) in Assam have been announced in 2024. The said projects, funded jointly by the state and central governments, encompass various infrastructure enhancements.

Key projects unveiled include:

  • Kamakhya Temple corridor (INR 4.98 billion/US$59.68 million),
  • Asix-lane road connecting the new airport terminal in Guwahati (INR 3.58 billion/US$42.94 million),
  • The upgrade of Nehru Stadium to FIFA standards (INR 8.31 billion/US$99.59), and
  • Construction of a new sports complex in Chandrapur (INR 3 billion/US$35.9 million).

The central government has also initiated the second phase of the ‘Asom Mala’ roads project, aimed at improving and constructing 43 roads and 38 concrete bridges, with a total investment of INR 34.44 billion (US$412.9 million).

A four-lane roadway from Biswanath Chariali to Gohpur (INR 14.51 billion/US$173.8 million) and from Dolabari to Jamuguri (INR 5.92 billion/US$70.91 million) was inaugurated earlier this year.

Major industries

Assam has attracted investments in diverse sectors like tourism, telecom, and pharmaceuticals, amid efforts to diversify its industrial landscape.

Name of the park

Destination (District)


Project cost

Plastic Park


Deptt. of Chemicals & Petrochemicals, Ministry of Chemicals & Fertilizers, Govt. of India

INR 93.65 million (US$1.12 million) ;

Means of Finance: 
Department of Chemical & Petrochemicals, Govt. of India: INR 40 million (US$480,000)
Industries & Commerce Department, Govt. of Assam: INR 53.65 million (US$640,000) 


Mega Food Park


Ministry of Food Processing Industry

INR 75.98 million (US$910,167.72)

Bamboo Technology Park


Ministry of Commerce & Industry

INR 62.28 million


Jute Park


Ministry of Textile


INR 49.57 million


Tea Park


State Government

INR 35.32 million (US$423,494.64)

Data Source: Assam Government

Key industries in Assam include tea production, which accounts for a significant portion of global tea output, and the oil and natural gas sector. The service sector, particularly tourism, has also emerged as a growing contributor to the state’s GDP and employment.

Renewable energy

Assam has made significant strides towards its green energy objectives by inaugurating two solar power projects in Nagaon, generating a total of 25 MW of power. This initiative underscores the state’s commitment to environmental sustainability. With a target of producing 1,000 MW of electricity over the next three years, Assam aims to emerge as a hub for renewable energy.

Recent research conducted by the International Forum for Environment, Sustainability, and Technology (iFOREST) sheds light on Assam’s renewable energy (RE) generation capabilities and emphasizes the need for policy improvements and institutional strengthening to facilitate widespread RE expansion.

The research, presented in reports titled ”Assam Renewable Energy Potential Reassessment: Focus of Solar, Wind, and Biomass”, ”Enabling Renewable Energy Growth in Assam”, and ”Impact of ISTS Waiver on Economics of Solar Power Procurement in Assam”, was unveiled during a multi-stakeholder dialogue held on March 27, 2024.

Recent findings reveal that Assam possesses a much higher RE generation potential than previously estimated by central government agencies. This potential is deemed sufficient to support a low-carbon trajectory to meet the state’s increasing electricity demand. The research also underscores the necessity of tightening policies and enhancing institutional capabilities to overcome current barriers to growth.

Research analysis indicates a need for accelerated RE capacity expansion. Assam’s electricity demand is anticipated to double by 2030, requiring nearly 3,000 MW of RE capacity by 2026–27 and 5,000 MW by 2031–32 to fulfill renewable energy obligations (RPOs) and ensure energy security.

The Ministry of New and Renewable Energy (MNRE) officially estimates Assam’s RE potential at 14.4 GW. Assam’s solar policy, formulated in 2017, aims to harness Assam’s solar potential through state and central resources, aligning with Sustainable Development Goals. It also encourages the deployment of grid-connected solar power plants on the rooftops of various establishments, promoting eco-friendly electricity generation and reducing dependence on fossil fuels.

Additionally, plans to introduce rooftop solar power plants across districts in the state aim to attract investment and decrease reliance on traditional energy sources. Assam’s RE efforts also include establishing floating solar power plants in wetlands.

Tea industry

The global recognition of Assam tea can be attributed to its distinctive flavor profile. The region’s terroir, characterized by low elevation, high temperatures, and abundant rainfall, imparts a bold and malty character to the tea leaves. Assam currently produces nearly 700 million kg of tea annually, representing about half of India’s total tea production. Assam also generates annual foreign exchange earnings estimated at around INR 30 billion (US$359.5 million).

There are approximately 800,000 workers in the tea industry. In recent years, both the area under tea cultivation and tea production in Assam have increased, and the price of Assam tea has shown an upward trend.

Currently, Assam is developing a new policy for its 200-year-old tea industry. In October 2022, a proposed draft of ‘Tea Policy’ was discussed with representatives from tea industry bodies, auctioneers, buyers, and other stakeholders.

It has been reported that the state plans to provide assistance for the replacement of old machinery and the installation of new machinery, offering 25 percent of the actual cost of plants and machinery, up to a maximum of INR 5 million. Furthermore, incentives of 30 percent of the actual cost, capped at INR 5 million, are proposed for setting up new blending, packaging units, value addition units, and expanding existing instant tea units or replacing or adding existing units.

Silk industry

Assam ranks third among Indian states in silk production, cultivating three main types of silk: eri, muga, and mulberry. The sericulture industry in Assam offers diverse employment opportunities, blending agriculture and industry. These opportunities include roles like host plant cultivator, cooperative rearer, silkworm seed producer, farmer-rearer, reeler, twister, weaver, hand spinner of silk waste, trader, and producer of value-added silk products, all contributing to rural development.

Muga silk, the first Geographical Indication (GI) registered product of Assam, holds significant demand in the global silk market. As of 2020, Assam accounted for 82.29 percent of India’s muga silk production.

Although Assam’s overall silk production represents only a fraction of India’s total output, it dominates the production of eri silk nationally. While eri, muga, and mulberry silk have been integral to Assam’s rural economy for a considerable time, the cultivation of tasar silk is a relatively recent addition to Assam’s silk industry.

Crude oil and natural gas

Assam has robust crude oil production, accounting for 4.2 million tonnes, constituting a significant 14.3 percent share of the country’s total crude oil production. Royalty contributions from crude oil production for the period 2019–20 to 2022–23 amounted to INR 19,291.17 crore (US$230.9 million), while royalties from natural gas totaled INR 1,851.12 crore (US$ 22-2 million).

Several development initiatives have been announced aimed at enhancing Assam’s position in the energy sector. These initiatives include the Numaligarh Refinery Expansion Project, the North East Gas Grid, the Paradip-Numaligarh Crude Pipeline, the establishment of Ethanol Plants, and the launch of NRL’s Commercial Ethanol Plant.

In 2023, Vedanta Ltd’s Cairn Oil & Gas, India’s largest private oil and gas exploration and production company, started test production from its Hazarigaon field in Assam, becoming the first company in the country’s northeast to commence gas flow from a Discovered Small Field (DSF) block.

Nick Walker, CEO of Cairn Oil & Gas, expressed confidence in Assam’s potential to unlock hydrocarbon reserves and support India’s vision of self-reliance in oil and gas with government support, infrastructure, and fast-tracked approvals for exploration activities.

Cairn Oil & Gas holds 7,650 sq km in Assam Arakan Basin with 12 Open Acreage Licensing Policy (OALP) and 3 DSF blocks, boasting a significant resource potential of up to 1 billion barrels of oil equivalent.

Investment opportunities

In February, the Assam government inked Memoranda of Understanding (MoUs) with seven different investors, totaling an investment commitment of INR 20 billion (US$239.5 million) and targeting the creation of 6,500 jobs. In order to tailor incentives for major investors, the state government modified the Industrial and Investment Policy of Assam,2019, in 2023.

Industrial Exemption Schemes

The Assam Industries (Tax Exemption) Scheme, 2015

The Assam Industries (Tax Reimbursement for Eligible Units) Scheme, 2017

The Assam Industries (Pipeline Units) Order, 2005

The Assam Industries (Tax Exemption) Scheme, 2009

The Assam Industries (Tax Reimbursement for Eligible Units) (Amendment) Scheme, 2020

The Assam Tax Reimbursement for eligible Tourism units Scheme, 2018

The Assam Industries (Tax Remission) Scheme, 2005

The Assam Industries (Tax Reimbursement for Eligible Units) (Amendment) Scheme,2019

Assam Industries (SGST Reimbursement for Eligible Units) Scheme, 2021

Through the 2023 modification of the Industrial and Investment Policy (IIPA) 2019, Assam has secured investments of INR 133.64 billion (US$1.6 billion) and 17,800 jobs in the last 14 months. The Assam cabinet has accepted 21 applications under the Industrial and Investment Policy of Assam (IIPA), 2019, and 14 MoUs have already been inked with companies such as PepsiCo India, Star Cement, Jericho Chemicals, and others.

Emerging semiconductor hub

The Assam Electronics (Semi-Conductor, etc.) Policy, 2023, acknowledges the potential of the semiconductor industry in reshaping Assam’s industrial landscape and positioning the state as a key contender in semiconductor manufacturing.

Some of the specific eligibility criteria outlined for semiconductor-related ventures, include:

  • Compound Semi-Conductors,
  • Silicon Photonics Sensors Fab,
  • Semiconductor Assembly, Testing, Marking, and Packaging facilities.

The incentives provided by the policy play a vital role in attracting investments. An additional 40 percent of capital expenditure assistance by the state government, such as water supply provisions, SGST reimbursement, payoff assistance, land-related benefits, stamp duty reimbursement, and incentives on power supply.

There are also customized incentives for large investments, that can be tapped under IIPA 2019 policy. 

In March 2024, the prime minister laid the foundation stone for Tata Group’s INR 27,000-crore (US$ 3,237.89) indigenous ‘Semiconductor Assembly and Test Facility’ in Jagiroad. The facility is expected to commence partial operations by 2025 and be capable of producing 48 million chips daily.

Despite Assam’s significantly lower state-level GDP compared to states like Gujarat, Uttar Pradesh, and Orissa, it was chosen for its proactive semiconductor policy, which rivals those of more economically advanced states. Assam’s prioritization of semiconductors is expected to set a precedent for smaller states with lower GDP in India.

The Assam region boasts ample high-quality water resources suitable for semiconductor operations, along with a pollution-free environment conducive to the expat workers needed for the initial phases of semiconductor projects. This strategic combination of resources and support underscores Assam’s potential to emerge as a leading hub for semiconductor manufacturing in India.


Northeast India’s entry point is the State of Assam, also referred to as the “land of the red river and blue hills.” The Patkai and Naga Hill Ranges and the Eastern Himalayan foothills are the state’s geographical boundaries. Eastwardly, Arunachal Pradesh borders the state, and northwards, Bhutan. Mizoram, Nagaland, and Manipur are located to the south. To the west are Bangladesh and West Bengal, and to the south-west is Meghalaya. Assam has 32 administrative districts.

Districts of Assam













Dima Hasao






Kamrup Metropolitan

Karbi Anglong











South Salmara-Mankachar



West Karbi Anglong


Assam’s primary focus is on strategic interventions to bolster growth. Infrastructure development, highlighted by major projects like bridge construction and road upgrades, aims to enhance connectivity and facilitate trade, positioning Assam as an attractive investment destination. Additionally, the state’s industrial landscape is diversifying, with investments in sectors such as tourism, telecom, and pharmaceuticals. Initiatives to promote renewable energy underscore Assam’s commitment to sustainability and energy security. Moreover, the state’s tea and silk industries continue to thrive. With ongoing efforts to attract investment and promote industrial growth, Assam is poised to realize its economic potential and emerge as a key player in India’s economic landscape.

(US$ 1= INR 83.42)

About Us

India Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Delhi, Mumbai, and Bengaluru in India. Readers may write to for support on doing business in India. For a complimentary subscription to India Briefing’s content products, please click here.

Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Dubai (UAE), Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Bangladesh, Italy, Germany, the United States, and Australia.