sikkim - ibef · sikkim shares its border with the state of west bengal and the neighbouring...

SIKKIMApril 2010

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Investment climate of a state

• Skilled and cost-effective labour• Labour market flexibility• Labour relations• Availability of raw materials and natural

resources

• Tax incentives and exemptions• Investment subsidies and other incentives• Availability of finance at cost-effective terms• Incentives for foreign direct investment (FDI)• Profitability of the industry

• Procedures for entry and exit of firms• Industrial regulation, labour

regulation, other government regulations• Certainty about rules and regulations• Security, law and order situation

• Condition of physical infrastructure such as power, water, roads, etc.

• Information infrastructure such as telecom, IT, etc.

• Social infrastructure such as educational and medical facilities

Resources/Inputs

Incentives to industry Physical and social infrastructure

Regulatory framework

Investment climate of a state is determined by a mix of factors

SIKKIM April 2010

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SIKKIM April 2010

Contents

Advantage Sikkim

State economy and socio-economic profile

Infrastructure status

State policies and incentives

Business opportunities

Doing business in Sikkim

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Sikkim – State profile• Covering an area of 7,096 sq km, Sikkim is the least-

populated and third-smallest state after Goa and Delhi. Sikkim shares its border with the state of West Bengal and the neighbouring countries of Nepal, Bhutan and Tibet.

• Gangtok is Sikkim’s capital city. The state has four administrative districts - North, East, West and South. Gyalshing, Namchi, Mangan, Jorethang, Singtam, Rangpo, Pakyong,Rhenock, Meli, Chungthang and Soreng are the key cities and towns in the state.

• Sikkim has 28 mountain peaks, 84 glaciers, 227 lakes, five hot springs, and eight mountain passes – making it an ideal tourist location. The Teesta and Rangeet are the two major rivers with nearly hundred tributaries.

• Sikkim has 15 soil series and eight sub-groups, making it a fertile land for cultivating rice, maize, wheat, millet, barley, pulses, soy bean, coriander, cardamom and various fruits.

• Nepali, Bhutia, Lepcha, Limboo, Magar, Rai, Gurung, Sherpa, Tamang, Newari, Sunuwar (Mukhia) are the commonly spoken languages. Hindi, English and Tamil are also widely spoken.

Sikkim April 2010ADVANTAGE SIKKIM

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Natural resources

Policy and fiscal incentives

Sikkim is naturally endowed with rich flora and fauna. Itsclimate and topographical conditions support industries suchas agriculture, horticulture, food processing, tourism and non-timber forest produce.

The state follows the North East Industrial InvestmentPromotion Policy, 2007, which provides several incentivesand concessions for investment in the state.

Advantage Sikkim … (1/2)

The state provides excellent institutional support throughvarious central and state government agencies viz., NorthEast Council, Ministry of Development of North EasternRegion, Commerce and Industries Department.

Institutional support


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Facilitating infrastructure Sikkim is well connected by roads. Telecommunication connectivity compares with the national standards. Optical-fibre connectivity is being developed. Rail and air connectivity are also being developed in the state.

Advantage Sikkim … (2/2)

Sikkim has a high literacy rate; with the establishment of Sikkim Manipal University and the Sikkim University, the quality and quantity of employable graduates has improved in the state.

Rich labour pool

Stable political environmentThe state has a stable political set up with a single-party government. The State Government is committed towards creating a progressive business environment.


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Sikkim in figures … (1/2)

Parameter Sikkim All-states Source

Economy

GSDP as a percentage of all states’ GSDP 0.06 100.0 CMIE, 2005-06

Average GSDP growth rate (%) 13.9 7.5 CMIE, 1999-2000 to 2007-08

Per capita GSDP (US$) 986.8 998.1 CMIE, 2007-08

Physical Infrastructure

Installed power capacity (MW) 46.1 98,996.4 Central Electricity Authority,as of March 2009

GSM cellular subscribers (No) 4,068,599* 367,328,179 Cellular Operators Association of India, as of November 2009

Broadband subscribers (No) 14,202* 4,981,976 As of October 2008

National Highway length (km) 62.0 70,548.0 Ministry of Road Transport & Highways, 2007-08

Social Indicators

Literacy rate (%)** 68.8 65.38 Sikkim Economic Survey, 2006-07

Birth Rate 18.1 23.1 National Health Profile, 2008

*Figures for the Northeast comprising Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura **Census 2001


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Parameter Sikkim All-states Source

Ease of doing business

Outstanding investments (US$ billion)

4.8 1,709.7 CMIE, as of December 2008

Industrial Infrastructure

PPP projects (No) 24 460 www.pppindiadatabase.com

Parameter Sikkim Government

Policy support

Sectors with specific policies IT Policy, Tourism, Industrial development

Availability of labour Adequate skilled labour available

Sikkim in figures … (2/2)

PPP: public private partnership


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Key industries in Sikkim with policy thrust and factor advantages

Medium High

Low

Medium

High

Industry attractiveness matrix

Sericulture Handloom

Food processing

Tour ism

IT

*Factor advantages include benefits due to geographical location and availability of factors such as talent pool, natural resources and capital

Bamboo

Agriculture and Horticulture

Hydro-power

Minerals


Factor advantage

Polic

y th

rust

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SIKKIM April 2010

Contents

Advantage Sikkim






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Socio-economic snapshot of Sikkim

Parameters Sikkim

Capital Gangtok

Geographical area (sq km) 7,096

Administrative districts (No) 4

Population density (persons per sq km) 76

Total population (million) 0.54

Male population (million) 0.28

Female population (million) 0.25

Population growth rate 1991-2001 (%) 33.06

Sex ratio (females per 1,000 males) 986

Literacy rate (%) 68.80

Male (%) 76.00

Female (%) 60.40

Source: Economic Survey, 2006–07

Sikkim April 2010

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE

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Sikkim’s GSDP

Sikkim’s GSDP (US$ million)

Source: CMIE

• At current prices, the total Gross State Domestic Product (GSDP) of Sikkim was about US$ 585.2 million in 2007-08.

• The state’s GDP grew at a CAGR of 13.9 per cent between 1999-2000 and 2007-08.

• Sikkim was among the states that recorded high GSDP growth rates between 1999-2000 and 2007-08. 206.7

221.5

238.2

263.8

311.3

357.1

412.8

458.3

585.2

0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

CAGR 13.9%

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Sikkim’s NSDP

Sikkim’s NSDP (US$ million)

Source: CMIE

• At current prices, the Net State Domestic Product (NSDP) of Sikkim was about US$ 494.9 million in 2007-08.

• Sikkim’s NSDP grew at a CAGR of 13.7 per cent between 1999-2000 and 2007-08.

186.9

200.5

223.0

263.3

302.3

347.2

386.5

494.9

0.0 100.0 200.0 300.0 400.0 500.0 600.0

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

CAGR13.7%

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Sikkim’s economy is driven by the secondary and tertiary sectors

CAGR

• The secondary sector has been the fastest growing sector, at a CAGR of 13 per cent between 1999-2000 and 2007-08. It is driven by construction and hydroelectric power generation.

• At over 69 per cent, the tertiary sector is the largest contributor to Sikkim’s economy. It grew at a CAGR of 10.6 per cent and is driven by trade, hotels, real estate, transport and communications.

• The primary sector’s share in the GSDP has been consistent at 25.3 per cent, driven mainly by agriculture. It recorded a CAGR of 10.4 per cent between 1999-2000 to 2007-08.

Percentage distribution of GSDP

Source: CMIE

Sikkim April 2010


10.4%

13.0%

10.6%25.3 25.9

5.4 4.6

69.3 69.5

0%

20%

40%

60%

80%

100%

2007-08 1999-00Primary Secondary Tertiary

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Per capita GSDP

• In 2007-08, the state’s per capita GSDP was US$ 986.8.

• The per capita GSDP increased at a CAGR of 11.9 per cent between 1999-2000 and 2007-08. It has more than doubled during this period.

• Trade, tourism, transportation and agriculture have been the key drivers of the increase in per capita GSDP.

Source: CMIE

Per capita GSDP

(US$

)

402.2 416.4 431.5475.4

553.0626.6

714.1782.1

986.8

0.0

200.0

400.0

600.0

800.0

1000.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

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Key industries in Sikkim

• The Commerce and Industries Department of Sikkim is involved in promotion of trade and industry in the state.

• The Sikkim Industrial Development & Investment Corporation Limited (SIDICO) is the state-level institution engaged in promoting, financing and developing the tiny and small scale industries (SSI) sector in the state.

• Eco-tourism, handicrafts and handlooms, silk reeling and processing, precision engineering, electronics, IT, medicinal plants, floriculture, tea, spices, honey and biotechnology are thrust areas identified by the state.

• Being a potentially eco-fragile location, the people of Sikkim support promotion of pollution-free industries.

Key industries in Sikkim

Tourism

Agriculture

Agro-processing

Handlooms and handicrafts

Hydroelectric power

Tea

Minerals

Sericulture

Horticulture

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Rice, maize, oil-seeds, orange, tea and spices are the key agricultural products

Crop Annual production (tonnes)

Rice 22,230

Maize 65,740

Buck wheat 5,350

Pulses 5,790

Oil-seeds 7,610

Cardamom large 2,745

Mandarin orange 17,910

Tea* 167

• Agriculture and allied sectors contributed 25.2 per cent to the GSDP of Sikkim.

• Sikkim enjoys a monopoly in the production of large cardamom production, contributing 85 per cent of the total produce in the country.

• Sikkim aims to make the state’s farming fully organic by 2015. Organic farming demonstrations have been made in over 3,000 hectares (ha) of land and bio-fertilisers have been introduced in 5,340 ha. A bio-fertiliser manufacturing unit has also been set up.

• The Sikkim AGRISNET is an Internet-based agriculture information centre to promote scientific agricultural methods and convert research into practice in the agricultural sector.

Source: Sikkim AgrisnetProduction as of 2008-09*As of 2006

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Advantage Sikkim






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Roads, railways and airports

• Sikkim has a total road length of 2,873 km with a road density of 41 km per100 sq km. The state is connected to West Bengal and rest of India through National Highway (NH) - 31A.

• The state Public Works Department (PWD) and the Border Roads Organisation (BRO) maintain the roads. The Sikkim Nationalised Transport (SNT) operates 87 busses and 92 trucks across the state, carrying 60 per cent of the state’s total freight and covering 43 routes.

• Rail connectivity is being created between Rangpooand Siliguri in West Bengal. Airport construction is underway in Pakyong; currently, helicopter services are available from Bagdogra (West Bengal) to Gangtok.

Road type Length (Km) Road type Length

(Km)

National Highways (NH) 62 District roads 1,795

State Highways 184 Border roads (including NH) 894

Sources: Economic Survey 2006-07, Government of Sikkim; Ministry of Road Transport & Highways, 2007-08

Source: Public Works Roads and Bridges Department, Government of Sikkim

Sikkim April 2010

INFRASTRUCTURE STATUS

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Power• As of March 2009, Sikkim had a total installed power generation capacity of 46.1 MW, which comprised 5

MW of diesel power and 41.1 MW of hydroelectric power.

• Sikkim has approved 30 new hydro electric power plants (HEP), which are at various stages of construction and would have an installed capacity of 5,352.7 MW when complete.

• About 24 HEPs are being set up under Public Private Partnership (PPP) mode.

• Sikkim has a peak hydroelectric capacity of 8,000 MW with a firm base of 3,000 MW, providing a huge potential for development.

37.9 37.9 37.0 37.0

46.1 44.1 44.1 46.1

-5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Installed state and private capacity (MW)

Source: Central Electricity Authority

Sikkim April 2010


(MW

)

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Telecom operators in Sikkim

• BSNL

• Reliance Communications

• Bharti Airtel

• Tata Indicom

• Vodafone Essar

Telecom infrastructure

• Sikkim is among the states with the highest tele-density in the country.

• The state had more than 49,000 landline phone connections and 15,000 plus mobile connections in 2004.

• Virtual Private Network (VPN) and 3G-services have been introduced in Sikkim by state-run telecom company, Bharat Sanchar Nigam Limited (BSNL).

• Forty “Community Information Centres” have been constructed across the state. They provide Internet-based interface for implementing various government programmes and schemes.

• Postal services are available through India Post and other private courier services.

Source: North Eastern Development Finance Corporation Limited (NeDFI)

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Urban infrastructure … (1/2)

Water supply

• The Sikkim Water Security & Public Health Engineering (WS&PHE) department provides water supply to Gangtok, eight urban towns and 55 notified rural towns.

• WS&PHE supplies 130 litres per capita per day (lpcd) in Gangtok, 90 lpcd in urban towns, and 70 lpcd in the notified rural towns.

• Gangtok has a requirement of 27 million litres per day and the WS&PHE has a storage and distribution capacity of 45.45 million litres.

Sewerage

• Gangtok is the only town in Sikkim to have a full-fledged sewerage system. The sewerage system caters to nearly 50 per cent of the town, and expansion works are underway to cover the whole population.

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• Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the rehabilitation of sewerage systems of Gangtok is being undertaken at a cost of US$ 5.3 million.

• Under the Basic Services to Urban Poor (BSUP) programme, three projects have been approved by the Government of India, at a cost of US$ 7.4 million, for improvement in sanitation and sewerage and poverty alleviation of the urban poor.

• With a funding of US$ 4.4 million under the Integrated Housing and Slum Development Programme (IHSDP), housing facilities are being built for the urban poor.

Urban infrastructure … (2/2)

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PPP projects• Sikkim has 24 active PPP projects of value US$ 3.8 billion, all for hydro electric power generation.

Key projects Project cost (US$ million)Bermelee Khola HEP 4.7Bhasmey hydro-power plant 32.1Chujachen hydro-power plant 98.8Dikchu hydro-power plant 110.7Hee Khola HEP 5.3Infrastructure for evacuation of power from IPPs 22.1Jorathang Loop power project 59.8Kalez Khola HEP 10.6Kissim Khola HEP 3.3Linza HEP 155.0Panan hydro-power project 199.3Rangit-IV hydro-power plant 89.7Ringyang hydro-power plant 2.0Rongnichu storage hydro-power plant 94.8Rorathang power plant 33.2Talem HEP 151.5Taramchu hydro-power plant 36.1Teesta - VI power plant 664.3Teesta -1 hydro-power plant 267.3Teesta -III hydro-power project 1306.5Upper Rimbi HEP 13.1Source: pppindiadatabase.comIPP: independent power producers

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Education sector• Sikkim has a literacy rate of 68.8 per cent as per

Census 2001. It has increased to 74.3 per cent in 2005.

• The Sikkim Manipal University (SMU) – a partnership between the Government of Sikkim and the Manipal University – provides technical, healthcare and science education. It is rated as one of the top universities in the country.

• Distance education is available for students through SMU and Indira Gandhi National Open University (IGNOU).

Sources: HRD Ministry of Sikkim, Economic Survey, 2006-07

No of educational institutions

Universities 4

Colleges 12

Polytechnics, ITI and teacher training institutes 6

Religious schools 89

Senior secondary schools 42

Secondary schools 92

Upper primary schools 150

Primary schools 327

Lower primary schools 154

Primary education statistics

Enrollment ratio (1998-99)6-10 years11-14 years

91.0%86.0%

Drop out ratio (I-V class, 1997-98)GirlsBoys

45.2%45.0%

Pupil-teacher ratio, secondary education* 18:1

*As of 2004-05Sources: HRD Ministry of Sikkim, Economic Survey, 2006-07

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Health infrastructure

• Sikkim has an impressive health infrastructure, one of the best in the country.

• The state fares better than the national average in almost all health indicators.

• Health tourism is being promoted in the state to utilise its medical infrastructure and boost the economy.

Source: NeFDI, 2005

Health indicators

Population-to-bed ratio, 2004-05 530

Birth rate* 18.1

Infant mortality rate**, 2005 30.0

Total fertility rate, 2005-06 2.0

Health infrastructure

• Sub-centres: 147• Primary health centres: 24• Community health centres: 4• Tuberculosis centres: 5• Referral hospitals: 2• Grant in institutions: 29• Blood banks: 3• Leprosy, mental illness and AIDS treatment hospital: 1

Sources: NeDFI, Economic Survey, 2006-07*Per thousand persons**Per thousand live births

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Cultural infrastructure

• There are three ethnic communities in Sikkim: Lepcha, Bhutia and Nepali. Buddhism and Hinduism are the two main religions followed in the state. It has nearly 200 monasteries, of which the most well known Buddhist circuits are the Pemayangste, Tashiding, Rumtek, Enchey, Phensang, Ralong, Phodang and Tolung.

• Important festivals in the state are Bumchu, Dasain, Losar, Losoong, Maghe Sankranti, Namsoong, Pang-Labhsol, Saga Dawa, Sakewa, Sonam Lochar, Tamu Lochar, Tendong Lho Ram Faat, Tihar, TrungkarTeschu.

• Sikkim, though a small state has the steepest rise in altitude over the shortest distance; its temperature varies from tropical and temperate in the Southern districts to alpine and tundra in theNorthern peaks. Sikkim has lush forests, lakes, hot-springs, glaciers and mountain peaks. Trekking, river-rafting, mountain biking, mountaineering, yak riding and bird watching are the popular adventure sports in Sikkim.

• The state is richly endowed with rare and exotic flora and fauna, which includes 4,500 different flowering plants, 550 types of orchids, 36 varieties of rhodendrons, 28 bamboo species, over144 mammals, 552 species of birds and 600 different butterflies – making it a nature lover’s paradise.

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Industrial Infrastructure

• Sikkim has identified Rangpo-Gangtok, Melli-Jorethang, Jorethang-Rishi and Ranipool-Gangtok as industrial corridors with provision for giving the land to the investors on a lease basis.

• The strategically important, Nathula Pass, has been opened to provide trade links with Tibet and China; this has given a fillip to trade and manufacturing in the region.

• Sikkim is a leading Northeastern state in hydro electric power development with PPPs with 24 different projects identified.

• The State Government has invited “Expression of Interest” (EOI) from interested parties to invest in PPP projects in the tourism sector.

• Sikkim has identified agro-based industries, horticulture and floriculture, minor forest-based industries, animal husbandry and dairy products, tourism-related industries, ITincluding knowledge-based industries, precision oriented high value low volume products, hydro-power, tea, education and hospitality as thrust sectors.

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Major projects in the infrastructure sector

Infrastructure type Investments (US$ million)

Power and energy 4,513.06

Services 205.34

Manufacturing 55.79

Total 4,774.18

• As of December 2008, over US$ 4.8 billion in investments have been made towards improving Sikkim’s industrial infrastructure.

• Over 90 per cent of the investments in infrastructure have been made in the area of power (both generation and distribution).

• A total investment of US$ 130.4 million is planned in the hospitality sector.

Source: CMIE

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Major industrial projects being implemented

Promoter Project Investment(US$ million) Location

Infrastructure

North East Frontier Railway Railway line from Sivok to Rangpo 291.2 Sivok-Rangpo

Teestavalley Power Transmission Limited

Transmission line, Teesta region 152.2 Teesta, North Sikkim

SIDICO Sevoke-Gangtok-Nathula road project 133.8 Gangtok-Nathula

Airports Authority of India Airport project 67.2 Pakyong

Hyatt International Corporation Five-star hotel 43.6 Gangtok

CGH Earth Hotels 21.8 Gangtok

• Twenty four hydro-power plants are being set up at an investment of US$ 3.8 billion, under the PPP mode.

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Sector-specific policies … (1/4)

North East Industrial and Investment Promotion Policy (NEIIPP), 2007

Aim: To promote the Northeast as an attractive investment destination through several concessions and incentives.

Key features:

• Industries under this policy are eligible for incentives for a period of 10 years from the date of commencement of commercialproduction.

• All new units as well as existing units that undergo substantial expansion (minimum 25 per cent increase in fixed capital) and start production before 2017 would qualify for incentives.

• Incentives would be available for all existing industrial units and upcoming units anywhere in the Northeast.

• A high-level monitoring committee/advisory committee would oversee the implementation of the NEIIPP.

• NEIIPP would not be applicable to peripheral activities such as preservation while storage, cleaning, packing, re-packing, labelling or re-labelling, sorting, etc.

• The North East Industrial Development Finance Corporation (NeDFI) will act as the nodal agency for disbursal of subsidies.

• NEIIPP, 2007, replaced the North East Industrial Policy,1997.

• Sikkim Industrial Promotion and Incentive (Amendment) Act, 2007, follows the NEIIPP, 2007.

Sikkim April 2010

STATE POLICIES AND INCENTIVES

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NEIIPP, 2007 (continued)

Incentives and concessions:

• 100 per cent excise duty exemption on finished products made in the Northeast.

• 100 per cent income tax exemption for industrial units.

• Capital investment subsidy increased from 15 to 30 per cent for plant and machinery up to US$ 360,000 per unit. For units above US$ 360,000 and up to US$ 7.5 million, an empowered committee approves. For units above US$7.5 million, the Union Cabinet approves.

• Interest subsidy to be given at the rate of 3 per cent on working capital.

• 100 per cent reimbursement of insurance premium.


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Sikkim Tourism Policy, 2010

Aim: To build Sikkim as an attractive tourist location and promote the sector as an economic growth engine.

Key initiatives and objectives:

• Community based eco-tourism to be promoted with the use of participatory management techniques.

• Rural tourism, adventure/sports tourism, medical tourism, trekking, natural tourism, culture and heritage tourism, cave tourism,monsoon tourism, tea tourism, etc., to be promoted through PPP projects.

• State to build the infrastructure for connectivity required to access the tourist spots.

• To have a “State Capacity Building Institute” to train and equip locals to serve the tourism sector.

• To participate in international tourist fairs and promote the tourism potential of Sikkim.

• Single-window system for clearance of private investments in the tourism sector.

• To provide concessions in luxury tax, service tax, service charges, electricity and water charges, and financial assistance on the capital outlay.

• To provide legal support and regulations to protect the industry.


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IT Policy of Sikkim, 2006

Aim: To employ IT to provide better governance and generate employment.

Key initiatives and objectives:

• IT to be promoted as an employment generation vehicle for the state.

• To set up software technology parks to promote call centres and business process outsourcing operations out of Sikkim.

• To promote e-governance within the State Government and its schemes to deliver speedy services to the citizens.

• To map all natural resources and the cultural heritage of Sikkim to preserve and promote its unique identity.

• To connect all district headquarters and sub-division headquarters with high-speed optical fibre cable to provide seamless Internet connectivity across the state.

• Cyber laws, security and Intellectual Property Rights (IPR) to be implemented to protect and promote entrepreneurship and innovation in the IT industry .


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SIKKIM April 2010

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Advantage Sikkim






37

Floriculture

• Sikkim has 4,500 varieties of flowering plants, 550 orchids, 35 rhododendrons and nine tree ferns, presenting an avenue for investment in floriculture.

• The existing industry is at a nascent stage and has potential to be developed and promoted towards an export-oriented business.

Sikkim April 2010

BUSINESS OPPORTUNITIES

38

Medicinal plants and bamboo

• The agro-climatic conditions in the state support a wide variety of exotic flora and fauna that have utility in the medicine sector.

• About 182 different medicinal and aromatic plants are cultivated under contract farming for the National Medicinal Plants Board, the Department of Ayurveda and the Ministry of Health and Family Welfare, Government of India.

• The state has identified medicinal plants and bamboo as one of the priority sectors for investment.

• Sikkim has 28 varieties of bamboo, offering potential for developing the handicrafts, construction, medicine, packaging, and food processing industries.

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Agriculture, horticulture and food processing

• Sikkim has a suitable climate for agricultural and horticultural products. It supports multiple crops, viz., rice, maize, millet, barley, urad, pea, soya bean, mustard, potato, sweet potato, tea, mandarin orange, banana, jackfruit, papaya, passion-fruit, litchi, broccoli, onion, egg-plant, carrot, tomato, radish, pumpkin, potato, sweet potato, turmeric, coriander, chilly, ginger, garlic and large cardamom.

• The surveyed arable land in Sikkim is 109,000 ha, of which only 9.5 per cent is used; this provides a vast untapped potential for development. The Sikkim Government is working on an ambitious plan to achieve 100 per cent organic farming by the year 2015.

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Hydro power

• It is estimated that Sikkim has a peak potential capacity of 8,000MW and a steady 3,000 MW hydro-electric power. The state has invited PPP projects in the sector and 24 projects are already being set up in the state.

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Tourism

• Sikkim has the perfect blend of natural wealth and topography, which ranges from tropical to temperate to alpine. The state is richly endowed with thick forests, flora and fauna, lakes, glaciers and mountain peaks, which makes it a tourist paradise.

• The number of foreign tourists increased by 9 per cent from 2005 to 2006; during the same period the domestic tourist population increased by 21 percent from 241,697 to 292,486.

• Creation of tourist complexes, eco-tourism, adventure tourism, ethnic-culture tourism, health farms, hotels, convention centres, tourist travel services, etc., are various avenues for investment in the tourism sector.

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IT sector

• Sikkim’s IT policy aims to increase the use of IT in the industrial and government sectors. With a high literacy rate, affordable cost, strong English-speaking population, improved telecommunications connectivity and favourable climate, Sikkim is well poised to serve the IT industry.

• The IT policy provides several incentives and concessions for investments in the IT sector.

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Sericulture

• Mulberry, muga, eri, oak-tussar and silk are cultivated in Sikkim. The Sericulture Department of Sikkim promotes exports of silk from Sikkim. The state is investing US$ 1.2 million in capacity building of farmers across 115 villages.

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Handloom and handicrafts

• Carpet weaving, blanket making, handloom, cane and bamboo, Thanka painting, Lepcha hats-making and Angora shawl-weaving are the various handlooms and handicraft activities practised in Sikkim.

• Sikkim’s handicrafts are being promoted in various national and international trade fairs and have found ready buyers.

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Tea

• Tea grown in the Temi region of South Sikkim is famous by its brand name “Temi” tea. The tea has its unique flavour and about 100 million tonnes of tea is produced, annually.

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Minerals and mining

• Sikkim has significant, untapped natural resource reserves of coal, lime stone, marble, quartzite, graphite, and garnet.

• Contour mapping and survey of minerals is being carried out by the Department of Mines, Minerals and Geology of the Government of Sikkim.

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Electronics and precision engineering

• Electronics and precision engineering has been identified as a thrust area by the Sikkim Government owing to the presence of state-run precision engineering industry.

• Sikkim Precision Industries Limited, Sikkim Jewels Limited and Sikkim Time Corporation are the state-run precision engineering facilities. The success of these industries and the boost it has provided to the economy has encouraged the Sikkim Government to support and promote similar industry.

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Electronics and precision engineering – companies

Sikkim Time Corporation (SITCO)

SITCO was established in 1976 to assemble mechanical watches for Hindustan Machine Tools (H.M.T.). The company diversified into mechanical crown watches, semiconductors, digital and analog watches and speakers. SITCO currently employs 318 persons. It entered into an agreement with BPL, Bengaluru, to manufacture speakers for television and other applications.

Sikkim Jewels Limited (SJL)

SJL was established in 1972 to produce watch jewels, cup jewels and rotor magnets. The company has emerged as a leading player in this segment and has become a preferred supplier to H.M.T. Limited, Titan Industries Limited, Allwyn Watches Limited, Jaipur Meters and Electricals Limited, VXL India Limited and Andhra Pradesh Electricals and Equipment Corporation.

Sikkim Precision Industries Limited (SPIL)

SPIL was set up in 2001and employs over 100 persons. SPIL manufactures TO-202 package power devices and has an installed capacity of 10 million per annum.

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SIKKIM April 2010

Contents

Advantage Sikkim






50

Key approvals required

List of approvals and clearances required Department

Incorporation of company Registrar of companies

Registration, Industrial Entrepreneurs Memorandum, industrial licences

Commerce and Industries DepartmentPermission for land use

Allotment of land

Site environmental approvalSikkim Pollution Control Board No objection certificate and consent under Water and Pollution

Control ActRegistration under States Sales Tax Act and Central and State Excise Act Excise department Commercial taxes

Sanction of power

Energy and Power DepartmentPower feasibility

Power connection

Approval for construction activity and building plan Public Works Department

Water and sewerage clearanceWater Security & Public Health Engineering Department

Water connection

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DOING BUSINESS IN SIKKIM

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Cost parameter Cost estimate Source

Cost of land (per acre) US$ 50,000 to US$ 75,000 in Gangtok Property dealers

Hotel costs US$ 10 to US$ 50 per room per night State tourism website

Cost of office space (2,000 sq ft) US$ 75 to US$ 200 per month Property dealers

Cost of residential space (2,000 sq ft) US$ 50 to US$ 100 per month Property dealers

Labour cost (minimum wages) Unskilled: US$ 2.0 per daySkilled: US$ 2.5 per day

Ministry of Labour, Government of India

Cost of doing business in Sikkim

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Key agency Contact information

Commerce and Industries Department

Government of SikkimGangtok - 737101, Sikkim, IndiaPhone: 91-3592-202 670Website: sikkimindustries.gov.inE-mail: [email protected]

Energy and Power Department

Chief Engineer (III)Energy & Power DepartmentGangtokWebsite: www.sikkimpower.orgE-mail: [email protected]

Sikkim Industrial Development & Investment Corporation Limited (SIDICO)

Managing DirectorSIDICOBhanu Path, Gangtok- 737103, SikkimPhone: 91-3592-202 287, 202 637, 229 622 Fax: 91-3592-202 287E-mail: [email protected]

Directorate of handloom and handicrafts Director, D.H.H, GangtokEast SikkimPhone: 91-3592-203 126/202 926

Contact details

Sikkim April 2010


mailto:[email protected]�

53

Exchange rates

Year INR equivalent of one US$ 2000 46.6

2001 48.3

2002 48.0

2003 45.6

2004 43.7

2005 45.2

2006 45.0

2007 42.0

2008 40.2

2009 46.0

Annexure

Average for the year

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SIKKIM April 2010

India Brand Equity Foundation (“IBEF”) engagedICRA Management Consulting Services Limited (IMaCS) to prepare this presentation and the same has been prepared by IMaCS in consultation with IBEF.

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This presentation is for information purposes only. While due care has been taken during the compilation of this

presentation to ensure that the information is accurateto the best of IMaCS’s and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.

IMaCS and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.

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DISCLAIMER

sikkim - ibef · sikkim shares its border with the state of west bengal and the neighbouring...

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