Entrepreneurship is the lifeline of Andaman & Nicobar Islands, with its thousands of registered small-scale, village and handicrafts units. The distribution of resources in different areas, gives each of them a unique competence. While South Andaman has potential for coconut and rubber by-products based industries, banana-based products and wooden & cane Furniture have more scope in North Andaman. Little Andaman and Neil Island have an upcoming vegetable/fruit preservation industry. Similarly, Nicobar Islands have immense scope for coconut oil extraction, desiccated coconut production, coconut shell handicrafts etc.


Agriculture and allied activities


Travel and Tourism

Bamboo and Wood Industry


Food Processing and Fish Processing

MSME Schemes:
1. Loan to Tiny Cottage and SSI Industries at reduced rate of Interest:
A composite loan up to a maximum of Rs.5.00 Lakhs is made available to tiny cottage and SSI Units @7% of the interest on term loan and @10% on working capital per annum for purchase and erection of plant and machinery, construction of factory, sheds, wells, tanks and other civil works, purchase of raw materials and for land development. The promoter’s contribution shall be subject to a maximum of 15% of the project cost.
2. Built up Sheds and developed plots in the Industrial Estate:
There is one Industrial Estate at Garacharma and three more industrial estates, one each at Dollygunj (S/Andaman), Bakultala (M/Andaman) and Campbell Bay (G/Nicobar) are being developed. A total of 33 hectares of land is covered under these estates wherein more than 150 sheds will be built in the next few years. Also an Industrial Estate exclusively for coir products is planned in S/Andaman. The entrepreneurs are being charged nominal rents for the sheds and the plots.
3. Subsidy on installation of D.G. Set, land development and installation of water harvesting equipments:
All Small Scale Industries and Small Scale Service & Business Enterprises registered with Directorate of Industries, A&N Administration are eligible for 50% subsidy of the cost of the D.G. sets and 50% of the expenditure on the development of land subject to a maximum of Rs.1.00 Lakhs in each case and 50% of the cost of in-house water harvesting equipments subject to a maximum of Rs.50,000/-.
4. Interest free loan for procurement of D.G. set/in-house water harvesting equipments:
All SSI units registered with the Directorate of Industries are eligible for a loan up to 90% of the actual cost of the D.G. Set and in-house water harvesting equipments subject to a maximum of Rs. 2.75 Lakhs for the purchase of D.G.set and Rs.1.00 Lakhs for in-house water harvesting equipments. Entrepreneur is however required to contribute 10% of the total cost of the equipments as margin money.
5. Mainland Island Transport Subsidy Scheme:
90% of the freight charges are reimbursed to the eligible small scale industries for transporting raw materials from mainland port to the location of the Units and for transporting finished goods from the location of the units to the mainland ports. The units which are eligible under the Central Transport Subsidy Scheme of Govt. of India are not eligible under this scheme.
6. Inter Island Transport Subsidy Scheme:
90% of the freight charges are reimbursed to the eligible small scale industries for transporting raw material from any inter island port/jetty of A&N Islands to the location of the unit and for transporting finished goods from the location of the units to the Inter Island port/jetty.
7. Island Capital Investment Subsidy Scheme:
Capital investment subsidy of 25% subject to maximum of Rs.25 Lakhs is being given to the small scale industrial units and the small scale service and business enterprises which are registered with the Directorate of Industries/Department of Industrial Policy and Promotion, Ministry of Industry, GOI. Only such units which are set up after 1.4.1995 are eligible for subsidy under the scheme. Units which go in for provides their production capacity is increased by 25% are also eligible for subsidy.
8. Interest free loan for promoters contribution for Industrial Units marketing its products on Mainland:
All Small scale units registered with the Directorate of Industries are eligible for interest free loan upto 10% of the project cost towards promoters margin subject to maximum of Rs. 50,000/- provided they market at least 30% of their products in mainland. The promoters own contribution shall be 5% of the project cost.
9. Interest subsidy to PMRY beneficiaries:
The PMRY beneficiaries are eligible for an interest subsidy of 7% subject to the condition that the payment of principal as well as interest installments to the Banks are regular and timely.
10. Financial Assistance and Awards to Crafts Persons for Development of Innovative design:
In order to encourage craftsmen to develop new designs in handicrafts, the department implements a scheme awards as a measure of recognition of the expertise. Besides, best craftsmen are also awarded prize money and certificates every year.
11. Credit Guarantee Scheme: It has been the experience that the local entrepreneurs face problems of providing collateral security to obtain loans from Nationalised Banks/Financial Institutions. The Administration has guarantee to the Banks/Financial Institutions to cover bad debts upto Rs. 10 Lakhs per unit.

FISCAL INCENTIVES: There is no sales tax in this UT and the industries avail this concession. Octroi is exempted for the SSI Units on plant and machinery/equipments used for industrial purposes.

SAI ANDAMAN NICOBAR MOTIVATION AND EDUCATIONAL TRUST: Their objective is to promote existing and new entrepreneurs, sponsor, conduct Skills Development Programmes, Welfare Programmes, and Awareness Programmes or assist all types of activities considered to be the social and moral responsibilities of the trust to public at large without giving importance to any caste, class, creed and religion.

Department of Industries, A&N provides Mainland Training to the entrepreneurs. The entrepreneur will be given exposure in the new industrial culture by organizing exposure tours to industrially developed areas in Main Land. The entrepreneurs who are desirous of acquiring advanced skills in some selective trades will be deputed for advance training in institutions in the Mainland.

In Summary – Andaman & Nicobar Islands and Entrepreneurship:

The relative isolation of the islands from the Indian mainland, its scattered landscape, challenging communication system, heavy reliance on government departments for supply of inputs and smaller base of local market are the main impediments that the economy of the union Territory of Andaman & Nicobar Islands is struggling with. However, its extensive marine resources, high literacy rate, conducive work environment and strategic location point to the state’s immense potential for achieving higher growth. In achieving this goal, the government, various industries headed by the banking sector, and private entrepreneurial initiatives must work in harmony.

To know more about how Andaman & Nicobar Islands is building a vibrant entrepreneurship ecosystem, click here.

Data Sources for Andaman & Nicobar Islands

Note: Policy details provided here are for the purpose of information only. Please verify the latest information from the relevant Government or MSME website of the state. Other data and information is curated from various websites and public documents. In case you have any corrections, additions, or suggestions, please share the same with us, and we’ll be happy to incorporate them here.