Sikkim, the 22nd state of the Indian Union, has a total population area of 7096 And a population of 4.6 lakh people. Over 75 percent of the land is covered with forests and around 80 percent of the population lives in villages it is ensconced in the Himalayan mountain ranges, with only 20 percent of the total area of the state being habitable.

Sikkim, has a natural and unpolluted beauty, with many exotic varieties of flora & fauna. The state is determined to keep its environment green and pollution free and therefore, the efforts towards industrialization should not damage the ecological balance and environment to generate unmanageable toxic industrial effluents.

Sikkim is one of the least industrially developed state in India, heavily dependent on Central Government grants, and needs to undertake an all-round development effort to be at per with the other states of the country. It is hence, necessary to identify the priorities and emphasize the significance of the twin objectives of speedy industrial development and generation of adequate employment opportunities. Keeping these objectives in mind, the industrial policy attempts to satisfy the aspirations of the people, through economic and industrial development of the state.


80 percent of the population lives in rural Sikkim and agriculture plays a dominant role in the state economy. With the total cultivable land of around 70,000 hectares. The rugged mountainous terrain, fragmentation of land erosion of the hilly tracts, geographical seclusion of Sikkim from mainland India, bottlenecks transportation, dependence on traditional methods of cultivation, etc, have contributed to the low productivity of agriculture crops and difficulties in undertaking large scale farming. Consequently, there has been very limited improvement in the methods of agriculture over the years.

The main crops produced are rice, wheat, maize, large cardamom and ginger, with potential for the commercialization of large cardamom, ginger, fruits, tea, medicinal herbs and exportable flowers. There are large areas of fallow land available, which can be converted into productive farm cash crops.

Sikkim produces 80 percent of India's large cardamom, which enjoys a high value, export market in Pakistan, Singapore and the Middle-East. The ginger is also of a good quality and has export prospects. The large cradamom and ginger can hence be converted into value added products. Fruits can be processed for value addition. Exotic flowers can be cultured for export. Honey and tea are other agro-based products that have high potentail.

There is a good market for the minor forest produce of the state. The varied altitude is ideal for the cultivation of a variety of herbs which can be used in the manufacture of medicines, cosmetics and aromatic products. The climate is ideal for the development of mulberry tees and hence, the establishment of a sericulture industry.

The absence of profitable marketing network and the lack of appropriate processing facilities for manufacturing quality finished products has resulted in most of the products being sold at uncompetitive prices to other state ar raw material, and their true potential has agro-based, food processing and forest based units.

There are good prospects for setting up dairy and animal husbandry units on a commercial basis. The milk production offers opportunities for developing processed food-products like cheese, butter, etc. The population being predominantly non-vegetarian, meat-processing and packaging units offer promise in the state.

The state has a good resource base of minerals like zinc, lead, copper, dolomite, coal, quartzite, graphite, talc etc. Commercial exploitation of some of these minerals is being carried out by the Sikkim Mining Corporation.

The traditional, cottage industries and specially handicrafts enjoy a good national and international market but more needs to be done on upgrading quality and design, as well as production and also improvement in the marketing network.

The abundant natural beauty of Sikkim offers a good potential to attract foreign and domestic tourists, and is conductive to the setting up of tourist spots, holiday resorts leisure camps of trekking and adventure sports activities. However, to develop and sustain the tourism industry, adequate travel and tourism related infrastructure needs to be created. Conference Tourism can also be promoted.

The state is dependent only on a network of roadways for transportation. At present, no air or water transport facilities are available. During the monsoon period transportation is hampered due to landslides etc. Therefore there is a urgent case for upgrading the road transportation network to and from Sikkim to other parts of India.

Accommodation facilities are at present only adequate for tourists and must therefore be enhanced. The overall power situation though comfortable must be suitable enhanced to induce power intensive industries to the state.

Human resources need to be developed with the ultimate objective of creating the necessary skills commensurate with the future industry and market requirements.

The current industrial scenario is not very encouraging, As on 31.03.1996. There were 1683 provisionally registered and 313 permanently registered private sector industrial units, most of which are in the tiny or small sector and promoted by first generation entrepreneurs. There are 14 State Public Sector Enterprises but no Central Government Public Sector units in the state.

Of the registered industrial units only 225 units are functioning while most of the other units are sick. Some of the State Public Sector Enterprises are also incurring continuous losses and have accumulated heavy debts over the years.



In view of the priorities attached by the government for speedy industrial development and generation of adequate employment opportunities through self-employment comprehensive industrial policy for Sikkim has been formulated which will be effective from 1.04.96 for five years.


The policy envisages



The objects set out in the industrial policy are challenging and require a well - defined strategy for implementations. The Government proposes to achieve these objectives by pursuing the following strategies:


With the announcement of the new industrial policy, it is expected that Sikkim will witness a rapid expansion of its industrial base which will not only increase employment opportunities but also herald further economic prosperity for the state as a whole.