The Industrial Entrepreneur Memorandum (IEM) is a provision and a formal acknowledgment issued by the Department for Promotion of Industry and Internal Trade (DPIIT) for industrial undertakings. Its origin is rooted in the economic liberalization of India, serving as a mechanism to reduce the bureaucratic burden of mandatory industrial licensing under The Industries (Development and Regulation) Act, 1951. The IEM solved the problem of excessive control by requiring only an informational filing, primarily for statistical purposes and a limited post-facto check, rather than a pre-approval license.
The IEM is mandatory for large-scale industrial undertakings that are exempted from industrial licensing but exceed the investment and turnover limits set for Micro, Small, and Medium Enterprises (MSME). The process works in two parts, filed online via the G2B Portal. Part A is filed to declare the intent to establish a new industrial unit or effect a substantial expansion. Part B must be filed after the commencement of commercial production to report the actual investment and employment details.
The IEM system has undergone recent changes, effective from April 1, 2025, following a Gazette Notification S.O. 1364(E) dated March 21, 2025, by the Ministry of MSME. The eligibility criteria for IEM acknowledgment were significantly raised: enterprises must now have an investment in plant and machinery exceeding ₹125 crore or an annual turnover exceeding ₹500 crore. This replaced the previous limits of ₹50 crore and ₹250 crore, respectively. Additionally, in January 2024, the DPIIT issued a Standard Operating Procedure (SOP) for the amendment or cancellation of an IEM.