Introduction
Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP) schemes offer a package of incentives like duty free imports on the lines of EOU Scheme, deemed exports benefits and tax holidays.

Permissions for setting up units under EHTP and STP schemes are granted through the automatic route or by the Government.

Automatic Route
The Directors of STPs in respect of STP proposals and the Designated Officers in respect of EHTP proposals accord automatic approval if -

• the items do not attract compulsory licensing;
• the location is in conformity with the prescribed parameters;
• the export obligation laid down in the respective EHTP scheme or STP scheme is fulfilled;
• the CIF value of the imported capital goods required for the project does not exceed Rs.100 million;
• foreign technology proposals envisaged, if any, do not involve lump sum know how fee exceeding US $ 2 million, 8 per cent royalty on export and 5 per cent royalty on domestic sales (all net of taxes) over a period of 5 years from the date of commencement of commercial production;
• the exports are to general currency/hard currency area;

• the unit is amenable to bonding by the Customs, and all the manufacturing operations are carried out in the same premises and the proposal does not envisage sending out of the bonded area any raw material or intermediate products for any other manufacturing or processing activity.

All proposals for FDI/NRI/OCB investments in EHTP/STP units are eligible for approval through automatic route except those falling under FIPB route.

Government Route
All proposals which do not meet any or all of the parameters for automatic approval need to be considered and approved by the Government. Government approval for FDI/NRI/OCB investment under EHTP/STP need to be obtained through FIPB in respect of proposals falling under the FIPB route.

Procedure for Approval for EHTP/STP
Application, in the form as prescribed by the Ministry of Information Technology, should be submitted to the Directors of STPs or the Designated Officers of EHTPs for automatic approval and to the S.I.A. for Government approval. The application should be submitted along with a crossed demand draft for Rs.1000/- drawn in favour of the "Pay & Accounts Officer, Department of Industrial Development, Ministry of Industry", payable at State Bank of India, Nirman Bhavan, New Delhi.

Procedure for Automatic Approval for EHTP/STP
Application, for setting up EHTP/STP units shall be in the prescribed form, should be submitted to the concerned Directors of STPs or the Designated Officers of EHTPs for automatic approval. Wherever, the proposals meet the criteria for automatic approval, as given above, the approval letters are issued within 2 weeks. All other proposals are forwarded to the Inter Ministerial Standing Committee for consideration.

Procedure for Government Approval for EHTP/STP
Application, in the prescribed form, should be submitted to the S.I.A. for Government approval. On consideration by the Inter Ministerial Standing Committee, a decision would be normally conveyed within 6 weeks.

Procedure for Foreign Direct Investment / NRI Investment
All proposals for FDI/NRI/OCB investment in EHTP/STP units are eligible for approval under Automatic Route subject to parameters as given above. For proposals not covered under Automatic Route, the applicant should seek approval of the FIPB as stated above.

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