Factory License in India: Who Needs One and How to Get It Right

The threshold is based on worker count and power usage, not turnover or company size — a small unit running on power with just 10 workers is already covered. This surprises a lot of first-time manufacturers who assume the Factories Act only applies to large industrial operations.

Before the factory licence itself, most states require you to first secure building plan approval and a NOC from the local fire department, since the licensing authority checks that your premises meets structural and fire-safety norms as part of the review. Trying to apply for the factory licence before these are in place is the most common cause of rejection we see.

Expect to submit site and building plans, proof of ownership or lease of the premises, details of machinery and manufacturing process, worker welfare arrangements (drinking water, sanitation, first aid), and safety measures relevant to your specific process. Inspectors do conduct a physical site visit before approval in most states, so having these arrangements actually in place — not just on paper — matters.

Factory licences are typically renewed annually (some states now offer multi-year renewal), and the factory is subject to periodic inspection throughout the year, not just at renewal time. Non-compliance — inadequate safety measures, unreported changes to machinery or process, expired registration — can result in penalties or, in serious cases, a stop-work order.

Alongside building plan approval and the fire NOC, most manufacturing units also need Consent to Establish (CTE) and later Consent to Operate (CTO) from their State Pollution Control Board — a separate approval track under the Water Act and Air Act that many first-time applicants don't realise is running on its own timeline, independent of the factory licence process itself. Missing this creates a real bottleneck, since several states' factory licensing checklists expect proof of pollution board consent as a supporting document.

The practical fix is starting your CTE filing early and in parallel with your factory licence application, rather than treating it as a follow-up step — by the time you're ready to apply for the factory licence, you want CTE already in hand, not just started.

The Factories Act sets the national floor, but each state administers its own rules, portal, and fee schedule under that framework — so a factory licence process in Maharashtra, Telangana, or Madhya Pradesh follows the same core structure (building approval, fire NOC, pollution consent, then the licence application itself) but differs in the specific portal used, processing fee slabs, and how strictly multi-year renewal has been rolled out. If you're setting up in a state for the first time, checking that state's specific current process — rather than assuming your experience from a previous state carries over exactly — avoids submitting the wrong document format or missing a state-specific requirement.