There is a document that most Assam MSME founders spend three weeks writing.
AIDC reviewers size it up within the first few pages.
A large share of factory applications stall at Stage 1. Not because the business idea was wrong. Not because the land was unavailable. Because the document was wrong.
A reviewer who has seen hundreds of projects knows it early.
That document is the Techno-Economic Feasibility Report. TEFR.
Planning to apply for land at an AIDC industrial estate? Planning to approach a bank for a term loan?
Either way, this is the one document that gates everything else. For the land-application process itself, see the Factory Setup Playbook.
A CA delivers a first draft in two weeks. AIDC rejects it within days. Three or four months of revision follow before it passes, costing a full construction season.
What AIDC actually does with a TEFR
A TEFR is not a business plan. It is not a pitch deck. It is a financial stress test.
It must answer one question across seven sections: can this project generate enough cash to repay its debt, cover its costs, and produce a profit?
Under conservative assumptions. With real market data. With risks documented honestly.
The same document does three jobs over a five-to-seven year window:
- AIDC uses it to decide whether to allocate industrial land.
- Banks use it to approve term loans.
- NEDFI and other development finance institutions use it to calculate subsidy eligibility.
The mistake most promoters make is treating the TEFR as paperwork. Something to produce quickly and submit.
AIDC treats it as a signal of whether the promoter has actually stress-tested their own project.
Three things stop a reviewer cold: inconsistent numbers, market demand asserted without data, or a capacity ramp set at 85% in Year 1. Once that happens, the application moves toward rejection.
The six failures that appear again and again
After reviewing hundreds of TEFR submissions, AIDC’s screening patterns point to the same six failure modes.
The most damaging: unrealistic capacity utilisation. Most submissions claim 80–90% factory capacity in Year 1. This is the fastest way to signal you have not spoken to a single customer.
No manufacturing unit goes from zero to near-full capacity without years of distribution work.
A Year 1 capacity claim of 80% or above is rejected at first review in most cases. The correct ramp: 50% in Year 1, 60 to 70% by Year 3, 80 to 90% only once break-even is achieved. Conservative projections are not a weakness. They signal you understand the market.
The other five failures are just as systematic:
- Weak promoter credentials, with no manufacturing track record.
- Market demand stated as opinion rather than sourced data.
- Selling prices projected above what competitors actually charge.
- Working capital requirements underestimated by 30–40%.
- DSCR calculations that fall below the 1.2x minimum threshold most banks and SIDBI-backed lenders require.
Each of these is fixable. None require a better business.
They require a better document: actual supplier quotations, real competitor pricing, a correctly modelled moratorium period. And a sensitivity analysis that shows the project can survive a bad year.
Our techno-economic feasibility guide walks through how to build each of these.
What the complete guide covers
We have published a detailed walkthrough of every section of a TEFR that passes AIDC scrutiny.
The full report walks through all seven TEFR sections: promoter credentials, market demand, manufacturing process, financial projections, DSCR and break-even, SWOT, and sensitivity analysis. It also includes a pre-submission checklist and guidance on what to ask a CA.
The guide includes sample tables: cost of project, means of finance, cash flow, and payback period. All clearly labelled as illustrative.
They show the structure your CA should be working to, before they deliver a draft.
It also covers two things most first-time applicants get wrong:
- The moratorium period. Principal repayment does not begin on Day 1 in Indian project finance.
- The working capital calculation. Most TEFR submissions underestimate this by 30–40%, which creates real cash crises even when the P&L looks healthy. Our factory setup playbook covers working capital financing separately from the term loan.
Promoters with a clear idea of what they need, DSCR targets, a utilisation ramp, a break-even threshold, tend to get their TEFR done in three weeks. Promoters who ask for “something that gets approved” tend to take three months, and two rejections.
Read the full guide before you hire anyone to write it
The most useful thing you can do before engaging a CA or consultant is understand what a passing TEFR looks like.
Not so you can write it yourself. So you can ask the right questions, review what you receive, and catch errors before they reach the AIDC desk.
The TEFR is not the last document you will submit. Banks re-appraise it. NEDFI appraises it independently. Government agencies use it for subsidy eligibility, for years after the factory opens. Getting the numbers right the first time costs far less than fixing them later.
The full guide is published in the Nitisagar reports section. It includes all sample tables, the pre-submission checklist, and a breakdown of the six most common rejection reasons.
Once your unit is operational, Claiming What’s Yours covers how the same financials feed your subsidy claims under IIPA 2019.
This analysis is based on publicly available AIDC land allotment guidelines, SIDBI project finance documentation, and standard Indian project finance practice. Specific DSCR thresholds, loan tenure terms, and subsidy calculations depend on individual project parameters and lender terms. Contact us for a project-specific assessment.