Fabrication Workshop Project Report

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A PROJECT REPORT
ON
FABRICATION WORKSHP FOR

SPECIALIZED JOB WORKS
AT VISAKHAPATNAM
Prepared By
S.A. AZAD
B.Sc. Tech ( Chem Tech ) , DFM, DNIIT
Ex. Sr. Manager HPCL ( Project Planning)

For
Mr Christopher J. Titus, Calicut
Phone : 0091 495 3272228, Cell - 09349881286
________________________________________________________________________
Research Centre: Hira Nagar, Akola Road, Khamgaon ( M.S.) 444303-India
Phone / Fax : 91-7263 259052

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Ph : 0712 2565152 , Email :smbprojcts@yahoo.co.in
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A PROJECT REPORT
ON

AT VISAKHAPATNAM
Disclaimer :
All efforts have been made for reasonable accuracy of information
presented in the following report. However, it is clarified that all the
information is based on the desk research and not the field research.
Therefore we disclaim any responsibility for and consequences, financial or
otherwise which may result of the owner action based on the information
contained in this report. If, the owner feels that he can pursue the project
further on the basis of this desk research, it is strongly recommended that,
the owner commission us for a Detailed Techno-Commercial Feasibility &
Detailed Engg. Report which will include a comprehensive field research,
market projections and the details of designing, engineering and cost
estimation to enable the owner to decide investment decision-making and
bigger financial commitments. The owner may please email, fax or write to
us for such a consultancy work and a Price _ Quotation to undertake such
an assignment.
Date : Sept. 14, 2009
Place : Absolute Technologies Research Center,

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Khamgaon 444 303 ( M.S.) India
A PROJECT REPORT
ON

AT VISAKHAPATNAM
INDEX
CHAPTER
PAGE NO.
1.0 INTRODUCTION
2.0 TECHNICAL & SAFETY ASPECTS
3.0 WORKSHOP FACILITIES
31
4.0 COST ESTIMATE
33
5.0 FINANCIAL ANALYSIS
37
6.0 HOW TO SET UP AN ENTERPRISE
39

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1.0 INTRODUCTION
1.1. BACKGROUND :
Visakhapatnam in Andhra Pradesh is a mega industrial city on the
Indian Eastern Coast. It boasts of a very huge industrial economy
sustained by continuous corporate growth in the public and private
sectors. The city has grown from a sleeping coastal town to a major
metropolitan city on the East Coast with appx. More than 20 Lakhs
population, largely supported by big public sector units like Visakh
Steel Plant,
Visakhapatnam Port Trust, HPCL, Hindustan Zinc Ltd.,
BHPV, Hindustan Shipyard and several private sector enterprises.

M/s ONGC, a Navratna Oil major corporation is also engaged in the
nearby Bay of Bengal ( Krishna Godavari Basin ) in Oil & Gas
Exploration and Processing venture. Also some of the exploration
blocks have been offered to the private sector big wigs like Reliance
Petroleum. As a result the area offers an extremely good business
potential for a full fledged fabrication workshop specializing in TIG &
MIG welding and 6G type of fabrication on job work basis which are
often outsourced by the Operation & maintenance departments of
these major corporations.
Also, the whole year round maintenance activities in these companies
engage thousands of small and medium contractors who in turn need
the job work infrastructure. Thus a continuous growth is observed in

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this kind of business on a long and sustained basis in and around this
mega industrial township.
In view of this background, it is proposed to put up a reasonably good
fabrication workshop in the proximity of this city on a 2.5 acre of land.
The
land with N/A certification will be purchased outright for the
proposed project.
1.2
ACTIVITIES :
Fabrication and Welding involving most modern
equipment and tools, employing highly skilled manpower for the job
work of Stainless Steel Pipes, vessels, structural materials, spools and
other
process
equipments
normally
used
in
Oil
&
Gas
and
Petrochemical industries.
In the proposed fabrication workshop, most important activity will be
specialized welding of job works, mostly ordered from premier public
sector corporations like ONGC and others . As M/s ONGC is engaged in
various Oil & Gas Exploration and Processing activities particularly its
off shore exploration venture in Krishna Godavari basin, the proposed
fabrication workshop is expecting a reasonably good work load from
M/s ONGC at Viskhapatnam, specially for repair welding of pipes and
long length fabrication of pipe spools made of Stainless Steel and
Inconel Alloys.

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2.0 TECHNICAL & SAFETY ASPECTS

In the proposed fabrication workshop, most important activity will be
specialized welding of job works,
mostly ordered from a premier
public sector corporation ONGC. As the company is engaged in various

Oil & Gas Exploration and Processing activities particularly its off shore
exploration venture in Krishna Godavari basin, the promoters of this
fabrication workshop are expecting a reasonably good work load from
M/s ONGC.
As such, welding of vessels, pipes and other structural
materials, being an important part of the workshop loading, the same

has been described in detail as follows :
2.1
WELDING PROCESS : Welding is a fabrication or sculptural
process that joins materials, usually metals or thermoplastics, by

causing coalescence. This is often done by melting the work pieces and
adding a filler material to form a pool of molten material (the weld
pool) that cools to become a strong joint, with pressure sometimes
used in conjunction with heat, or by itself, to produce the weld. This is
in contrast with soldering and brazing, which involve melting a lowermelting-point material between the work pieces to form a bond
between them, without melting the work pieces.
. Contd

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Gas metal arc welding

Many different energy sources can be used for welding, including a gas
flame, an electric arc, a laser, an electron beam, friction, and
ultrasound. While often an industrial process, welding can be done in
many different environments, including open air, under water and in
outer
space.
Regardless
of
location,
however, welding
remains
dangerous, and precautions must be taken to avoid burns, electric

shock, eye damage, poisonous fumes, and overexposure to ultraviolet
light.
2.2 TYPES OF WELDING : Following types of welding are carried out
depending on the type of job and the metals involved.
2.2.1. ARC WELDING : Arc welding uses a welding power supply to
create an electric arc between an electrode and the base
material to melt the metals at the welding point. They can use
either direct (DC) or alternating (AC) current, and consumable
or non-consumable electrodes. The welding region is sometimes

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protected by some type of inert or semi-inert gas, known as a
shielding gas, and/or an evaporating filler material. The process
of arc welding is widely used because of its low capital and
running costs
Name
Characteristics
Applications
Atomic hydrogen
welding
Two metal electrodes in hydrogen

atmosphere
Historical
Bare metal arc

welding
Consummable electrode, no flux or

shielding gas
Historical
Carbon arc welding
Carbon electrode, historical
Copper, repair
(limited)
Electrogas welding
Continuous consumable electrode, vertical

positioning, steel only
Storage tanks,
shipbuilding
Electroslag welding
Continuous consumable electrode, vertical

positioning, steel only
Storage tanks,
shipbuilding
Flux cored arc

welding
Continuous consumable electrode filled

with flux
Industry,
construction
Gas metal arc

welding
Continuous consumable electrode and

shielding gas
Industry

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Gas tungsten arc

welding
Non-consumable electrode, slow, high

quality welds
Aerospace
Plasma arc welding
Non-consumable electrode, constricted arc
Tubing,
instrumentation
Shielded metal arc

welding
Consumable electrode covered in flux, steel Construction,

only
outdoors
Stud arc welding
Welds studs to base material with heat and

pressure
Construction,
shipbuilding
Submerged arc
welding
Automatic, arc submerged in granular flux
Ship industry
1. Also known as metal inert gas (MIG) welding or metal active gas (MAG) welding
2. Also known as tungsten inert gas (TIG) welding
3. Also known as manual metal arc (MMA) welding or stick welding
2.2.2 Oxyfuel gas welding
Name
Characteristics
Applications
Air acetylene
welding
Chemical welding process, not popular
Limited
Oxyacetylene
welding
Combustion of acetylene with oxygen

produces high-temperature flame,
inexpensive equipment
Maintenance, repair
Oxyhydrogen
Combustion of hydrogen with oxygen
Limited

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welding
produces flame
Pressure gas welding
Gas flames heat surfaces and pressure

produces the weld
Pipe, railroad rails

(limited)
2.2.3 Resistance welding

Name
Characteristics
Applications
Flash welding
Pressure-controlled
resistance welding
Projection welding
Resistance seam
welding
Two wheel-shaped electrodes roll along

work-pieces, applying pressure and current
Resistance spot
welding
Two pointed electrodes apply pressure and

current to two or more thin work-pieces
Upset welding
Butt joint surfaces heated and brought

together by force
Automobile industry

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2.2.4 Other welding
Name
Characteristics
Solid State Friction

Welding
Thin heat affected zone, need sufficient

pressure
Electron beam
welding
Deep penetration, fast, high equipment cost
Electroslag welding
Welds thick workpieces quickly, vertical

position, steel only
Applications
Aerospace industry,
railway, land
transport
Heavy plate
fabrication,
construction
Flow welding
Induction welding
Laser beam welding
Deep penetration, fast, high equipment cost Automotive industry
Combines LBW with GMAW in the same

welding head, able to bridge gaps up to
Laser-hybrid welding
2mm (between plates), previously not
possible with LBW alone.
Automotive,
Shipbuilding,
Steelwork industries
Percussion welding
Thermite welding
Railway tracks.

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2.2.5 References
Cary, Howard B. and Scott C. Helzer (2005). Modern Welding Technology. Upper
Saddle River, New Jersey: Pearson Education. ISBN 0-13-113029-3.
Lincoln Electric (1994). The Procedure Handbook of Arc Welding. Cleveland:
Lincoln Electric. ISBN 99949-25-82-2.
2.3 Gas tungsten arc welding
The Belgian artist Hubert Minnebo during the TIG welding of a

monumental bronze sculpture
Gas tungsten arc welding (GTAW), also known as tungsten inert
gas (TIG) welding, is an arc welding process that uses a nonconsumable tungsten electrode to produce the weld. The weld area is
protected from atmospheric contamination by a shielding gas (usually
an inert gas such as argon), and a filler metal is normally used, though
some welds, known as autogenous welds, do not require it. A
constant-current welding power supply produces energy which is
conducted across the arc through a column of highly ionized gas and
metal vapors known as a plasma.
GTAW is most commonly used to weld thin sections of stainless steel
and light metals such as aluminum, magnesium, and copper alloys.
The process grants the operator greater control over the weld than
competing procedures such as shielded metal arc welding and gas
metal arc welding, allowing for stronger, higher quality welds.
However, GTAW is comparatively more complex and difficult to master,
and furthermore, it is significantly slower than most other welding
techniques. A related process, plasma arc welding, uses a slightly

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different welding torch to create a more focused welding arc and as a
result is often automated.[1]
This process was perfected in 1941, and became known as heliarc or
tungsten inert gas welding, because it utilized a tungsten electrode
and helium as a shielding gas. Initially, the electrode overheated
quickly, and in spite of tungsten's high melting temperature, particles
of tungsten were transferred to the weld. To address this problem, the
polarity of the electrode was changed from positive to negative, but
this made it unsuitable for welding many non-ferrous materials.
Finally, the development of alternating current units made it possible
to stabilize the arc and produce high quality aluminum and magnesium
welds.[3]
Linde Air Products developed water-cooled torches that helped to
prevent overheating when welding with high currents. [4] Additionally,
during the 1950s, as the process continued to gain popularity, some
users turned to carbon dioxide as an alternative to the more expensive
welding atmospheres consisting of argon and helium. However, this
proved unacceptable for welding aluminum and magnesium because it
reduced weld quality, and as a result, it is rarely used with GTAW
today.
In 1953, a new process based on GTAW was developed, called plasma
arc welding. It affords greater control and improves weld quality by
using a nozzle to focus the electric arc, but is largely limited to
automated systems, whereas GTAW remains primarily a manual, handheld method.[5] Development within the GTAW process has continued
as well, and today a number of variations exist. Among the most
popular are the pulsed-current, manual programmed, hot-wire, dabber,
and increased penetration GTAW methods.[6]
2.3.1.Operation
GTAW weld area
Manual gas tungsten arc welding is often considered the most difficult
of all the welding processes commonly used in industry. Because the
welder must maintain a short arc length, great care and skill are
required to prevent contact between the electrode and the work-piece.
Unlike most other welding processes, GTAW normally requires two
hands, since most applications require that the welder manually feed a

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filler metal into the weld area with one hand while manipulating the
welding torch in the other. However, some welds combining thin
materials (known as autogenous or fusion welds) can be accomplished
without filler metal; most notably edge, corner, and butt joints.
To strike the welding arc, a high frequency generator provides a path
for the welding current through the shielding gas, allowing the arc to
be struck when the separation between the electrode and the workpiece is approximately 1.53 mm (0.060.12 in). Bringing the two into
contact in a "touch start" ("scratch start") also serves to strike an arc.
This technique can cause contamination of the weld and electrode.
Once the arc is struck, the welder moves the torch in a small circle to
create a welding pool, the size of which depends on the size of the
electrode and the amount of current. While maintaining a constant
separation between the electrode and the work-piece, the operator
then moves the torch back slightly and tilts it backward about 1015
degrees from vertical. Filler metal is added manually to the front end
of the weld pool as it is needed.[7]
Welders often develop a technique of rapidly alternating between
moving the torch forward (to advance the weld pool) and adding filler
metal. The filler rod is withdrawn from the weld pool each time the
electrode advances, but it is never removed from the gas shield to
prevent oxidation of its surface and contamination of the weld. Filler
rods composed of metals with low melting temperature, such as
aluminum, require that the operator maintain some distance from the
arc while staying inside the gas shield. If held too close to the arc, the
filler rod can melt before it makes contact with the weld puddle. As the
weld nears completion, the arc current is often gradually reduced to
allow the weld crater to solidify and prevent the formation of crater
cracks at the end of the weld.[8][9]
2.3.2 Operation Modes
GTAW can use a positive direct current, negative direct current or an
alternating current, depending on the power supply set up. A negative
direct current from the electrode causes a stream of electrons to
collide with the surface, generating large amounts of heat at the weld
region. This creates a deep, narrow weld. In the opposite process
where the electrode is connected to the positive power supply
terminal, positively charged ions flow from the tip of the electrode

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instead, so the heating action of the electrons is mostly on the
electrode. This mode also helps to remove oxide layers from the
surface of the region to be welded, which is good for metals such as
Aluminium or Magnesium. A shallow, wide weld is produced from this
mode, with minimum heat input. Alternating current gives a
combination of negative and positive modes, giving a cleaning effect
and imparts a lot of heat as well.
2.3.3 Safety
Like other arc welding processes, GTAW can be dangerous if proper
precautions are not taken. The process produces intense ultraviolet
radiation, which can cause a form of sunburn and, in a few cases,
trigger the development of skin cancer. Flying sparks and droplets of
molten metal can cause severe burns and start a fire if flammable
material is nearby, though GTAW generally produces very few sparks
or metal droplets when performed properly.
It is essential that the welder wear suitable protective clothing,
including leather gloves, a closed shirt collar to protect the neck
(especially the throat), a protective long sleeve jacket and a suitable
welding helmet to prevent retinal damage or ultraviolet burns to the
cornea, often called arc eye. The shade of welding lens will depend
upon the amperage of the welding current. Due to the absence of
smoke in GTAW, the arc appears brighter than shielded metal arc
welding and more ultraviolet radiation is produced. Exposure of bare
skin near a GTAW arc for even a few seconds may cause a painful
sunburn. Additionally, the tungsten electrode is heated to a white hot
state like the filament of a lightbulb, adding greatly to the total
radiated light and heat energy. Transparent welding curtains, made of
a polyvinyl chloride plastic film, dyed in order to block UV radiation,
are often used to shield nearby personnel from exposure.
Welders are also often exposed to dangerous gases and particulate
matter. Shielding gases can displace oxygen and lead to asphyxiation,
and while smoke is not produced, the arc in GTAW produces very short
wavelength ultraviolet light, which causes surrounding air to break
down and form ozone. Metals will volatilize and heavy metals can be
taken into the lungs. Similarly, the heat can cause poisonous fumes to
form from cleaning and degreasing materials. For example chlorinated
products will break down producing poisonous phosgene. Cleaning

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operations using these agents should not be performed near the site of
welding, and proper ventilation is necessary to protect the welder.[10]
2.3.4 Applications
While the aerospace industry is one of the primary users of gas
tungsten arc welding, the process is used in a number of other areas.
Many industries use GTAW for welding thin workpieces, especially
nonferrous metals. It is used extensively in the manufacture of space
vehicles, and is also frequently employed to weld small-diameter, thinwall tubing such as those used in the bicycle industry. In addition,
GTAW is often used to make root or first pass welds for piping of
various sizes. In maintenance and repair work, the process is
commonly used to repair tools and dies, especially components made
of aluminum and magnesium. [11] Because the weld metal is not
transferred directly across the electric arc like most open arc welding
processes, a vast assortment of welding filler metal is available to the
welding engineer. In fact, no other welding process permits the
welding of so many alloys in so many product configurations. Filler
metal alloys, such as elemental aluminum and chromium, can be lost
through the electric arc from volatilization. This loss does not occur
with the GTAW process. Because the resulting welds have the same
chemical integrity as the original base metal or match the base metals
more closely, GTAW welds are highly resistant to corrosion and
cracking over long time periods, GTAW is the welding procedure of
choice for critical welding operations like sealing spent nuclear fuel
canisters before burial.[12]
2.3.5 Quality

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GTAW fillet weld
Engineers prefer GTAW welds because of its low-hydrogen properties

and the match of mechanical and chemical properties with the base
material. Maximum weld quality is assured by maintaining the
cleanliness of the operationall equipment and materials used must
be free from oil, moisture, dirt and other impurities, as these cause
weld porosity and consequently a decrease in weld strength and
quality. To remove oil and grease, alcohol or similar commercial
solvents may be used, while a stainless steel wire brush or chemical
process can remove oxides from the surfaces of metals like aluminum.
Rust on steels can be removed by first grit blasting the surface and
then using a wire brush to remove any embedded grit. These steps are
especially important when negative polarity direct current is used,
because such a power supply provides no cleaning during the welding
process, unlike positive polarity direct current or alternating current.[13]
To maintain a clean weld pool during welding, the shielding gas flow
should be sufficient and consistent so that the gas covers the weld and
blocks impurities in the atmosphere. GTA welding in windy or drafty
environments increases the amount of shielding gas necessary to
protect the weld, increasing the cost and making the process
unpopular outdoors.
Because of GTAW's relative difficulty and the importance of proper
technique, skilled operators are employed for important applications.
Welders in the U.S. should be qualified following the requirements of
the American Welding Society or American Society of Mechanical
Engineers. Low heat input, caused by low welding current or high
welding speed, can limit penetration and cause the weld bead to lift
away from the surface being welded. If there is too much heat input,
however, the weld bead grows in width while the likelihood of
excessive penetration and spatter increase. Additionally, if the welder

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holds the welding torch too far from the workpiece, shielding gas is
wasted and the appearance of the weld worsens.
If the amount of current used exceeds the capability of the electrode,
tungsten inclusions in the weld may result. Known as tungsten
spitting, it can be identified with radiography and prevented by
changing the type of electrode or increasing the electrode diameter. In
addition, if the electrode is not well protected by the gas shield or the
operator accidentally allows it to contact the molten metal, it can
become dirty or contaminated. This often causes the welding arc to
become unstable, requiring that electrode be ground with a diamond
abrasive to remove the impurity.[14]
2.4.5 Equipment
GTAW torch with various electrodes, cups, collets and gas diffusers
GTAW torch, disassembled

The equipment required for the gas tungsten arc welding operation
includes a welding torch utilizing a nonconsumable tungsten electrode,
a constant-current welding power supply, and a shielding gas source.

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1. Welding torch
GTAW welding torches are designed for either automatic or manual
operation and are equipped with cooling systems using air or water.
The automatic and manual torches are similar in construction, but the
manual torch has a handle while the automatic torch normally comes
with a mounting rack. The angle between the centerline of the handle
and the centerline of the tungsten electrode, known as the head angle,
can be varied on some manual torches according to the preference of
the operator. Air cooling systems are most often used for low-current
operations (up to about 200 A), while water cooling is required for
high-current welding (up to about 600 A). The torches are connected
with cables to the power supply and with hoses to the shielding gas
source and where used, the water supply.
The internal metal parts of a torch are made of hard alloys of copper
or brass in order to transmit current and heat effectively. The tungsten
electrode must be held firmly in the center of the torch with an
appropriately sized collet, and ports around the electrode provide a
constant flow of shielding gas. Collets are sized according to the
diameter of the tungsten electrode they hold. The body of the torch is
made of heat-resistant, insulating plastics covering the metal
components, providing insulation from heat and electricity to protect
the welder.
The size of the welding torch nozzle depends on the amount of
shielded area desired. The size of the gas nozzle will depend upon the
diameter of the electrode, the joint configuration, and the availability
of access to the joint by the welder. The inside diameter of the nozzle
is preferably at least three times the diameter of the electrode, but
there are no hard rules. The welder will judge the effectiveness of the
shielding and increase the nozzle size to increase the area protected
by the external gas shield as needed. The nozzle must be heat
resistant and thus is normally made of alumina or a ceramic material,
but fused quartz, a glass-like substance, offers greater visibility.
Devices can be inserted into the nozzle for special applications, such as
gas lenses or valves to improve the control shielding gas flow to
reduce turbulence and introduction of contaminated atmosphere into
the shielded area. Hand switches to control welding current can be
added to the manual GTAW torches.[15]

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2. Power supply
Gas tungsten arc welding uses a constant current power source,
meaning that the current (and thus the heat) remains relatively
constant, even if the arc distance and voltage change. This is
important because most applications of GTAW are manual or
semiautomatic, requiring that an operator hold the torch. Maintaining a
suitably steady arc distance is difficult if a constant voltage power
source is used instead, since it can cause dramatic heat variations and
make welding more difficult.[16]
GTAW power supply

The preferred polarity of the GTAW system depends largely on the type
of metal being welded. Direct current with a negatively charged
electrode (DCEN) is often employed when welding steels, nickel,
titanium, and other metals. It can also be used in automatic GTA
welding of aluminum or magnesium when helium is used as a shielding
gas. The negatively charged electrode generates heat by emitting
electrons which travel across the arc, causing thermal ionization of the
shielding gas and increasing the temperature of the base material. The
ionized shielding gas flows toward the electrode, not the base material.
Direct current with a positively charged electrode (DCEP) is less
common, and is used primarily for shallow welds since less heat is
generated in the base material. Instead of flowing from the electrode
to the base material, as in DCEN, electrons go the other direction,
causing the electrode to reach very high temperatures. To help it
maintain its shape and prevent softening, a larger electrode is often
used. As the electrons flow toward the electrode, ionized shielding gas
flows back toward the base material, cleaning the weld by removing
oxides and other impurities and thereby improving its quality and
appearance.

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Alternating current, commonly used when welding aluminum and
magnesium manually or semi-automatically, combines the two direct
currents by making the electrode and base material alternate between
positive and negative charge. This causes the electron flow to switch
directions constantly, preventing the tungsten electrode from
overheating while maintaining the heat in the base material. Surface
oxides are still removed during the electrode-positive portion of the
cycle and the base metal is heated more deeply during the electrodenegative portion of the cycle. Some power supplies enable operators to
use an unbalanced alternating current wave by modifying the exact
percentage of time that the current spends in each state of polarity,
giving them more control over the amount of heat and cleaning action
supplied by the power source. In addition, operators must be wary of
rectification, in which the arc fails to reignite as it passes from straight
polarity (negative electrode) to reverse polarity (positive electrode). To
remedy the problem, a square wave power supply can be used, as can
high-frequency voltage to encourage ignition.[17]
3. Electrode
ISO ISO
Class Color
AWS
Class
AWS
Color
Alloy
WP
EWP
Green
None
WC20 Gray
EWCe-2
Orange ~2% CeO2
WL10 Black
EWLa-1
Black
WL15 Gold
EWLa-1.5 Gold
Green
[18]
~1% La2O3
~1.5% La2O3
WL20 Sky-blue EWLa-2
Blue
~2% La2O3
WT10 Yellow
EWTh-1
Yellow ~1% ThO2
WT20 Red
EWTh-2
Red
~2% ThO2
WT30 Violet
~3% ThO2
WT40 Orange
~4% ThO2
WY20 Blue
~2% Y2O3

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WZ3 Brown
WZ8 White
EWZr-1
Brown ~0.3% ZrO2

~0.8% ZrO2
The electrode used in GTAW is made of tungsten or a tungsten alloy,

because tungsten has the highest melting temperature among pure
metals, at 3,422 C (6,192 F). As a result, the electrode is not
consumed during welding, though some erosion (called burn-off) can
occur. Electrodes can have either a clean finish or a ground finish
clean finish electrodes have been chemically cleaned, while ground
finish electrodes have been ground to a uniform size and have a
polished surface, making them optimal for heat conduction. The
diameter of the electrode can vary between 0.5 millimeter and
6.4 millimeters (0.020.25 in), and their length can range from 75 to
610 millimeters (324 in).
A number of tungsten alloys have been standardized by the
International Organization for Standardization and the American
Welding Society in ISO 6848 and AWS A5.12, respectively, for use in
GTAW electrodes, and are summarized in the adjacent table. Pure
tungsten electrodes (classified as WP or EWP) are general purpose and
low cost electrodes. Cerium oxide (or ceria) as an alloying element
improves arc stability and ease of starting while decreasing burn-off.
Using an alloy of lanthanum oxide (or lanthana) has a similar effect.
Thorium oxide (or thoria) alloy electrodes were designed for DC
applications and can withstand somewhat higher temperatures while
providing many of the benefits of other alloys. However, it is somewhat
radioactive. Inhalation of the thorium grinding dust during preparation
of the electrode is hazardous to one's health. As a replacement to
thoriated electrodes, electrodes with larger concentrations of
lanthanum oxide can be used. Electrodes containing zirconium oxide
(or zirconia) increase the current capacity while improving arc stability
and starting and increasing electrode life. In addition, electrode
manufacturers may create alternative tungsten alloys with specified
metal additions, and these are designated with the classification EWG
under the AWS system.
Filler metals are also used in nearly all applications of GTAW, the major
exception being the welding of thin materials. Filler metals are
available with different diameters and are made of a variety of
materials. In most cases, the filler metal in the form of a rod is added

22
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to the weld pool manually, but some applications call for an
automatically fed filler metal, which often is stored on spools or coils.
[19]
4. Shielding gas
GTAW system setup

As with other welding processes such as gas metal arc welding,
shielding gases are necessary in GTAW to protect the welding area
from atmospheric gases such as nitrogen and oxygen, which can cause
fusion defects, porosity, and weld metal embrittlement if they come in
contact with the electrode, the arc, or the welding metal. The gas also
transfers heat from the tungsten electrode to the metal, and it helps
start and maintain a stable arc.
The selection of a shielding gas depends on several factors, including
the type of material being welded, joint design, and desired final weld
appearance. Argon is the most commonly used shielding gas for GTAW,
since it helps prevent defects due to a varying arc length. When used
with alternating current, the use of argon results in high weld quality
and good appearance. Another common shielding gas, helium, is most
often used to increase the weld penetration in a joint, to increase the
welding speed, and to weld metals with high heat conductivity, such as
copper and aluminum. A significant disadvantage is the difficulty of
striking an arc with helium gas, and the decreased weld quality
associated with a varying arc length.
Argon-helium mixtures are also frequently utilized in GTAW, since they
can increase control of the heat input while maintaining the benefits of
using argon. Normally, the mixtures are made with primarily helium
(often about 75% or higher) and a balance of argon. These mixtures
increase the speed and quality of the AC welding of aluminum, and
also make it easier to strike an arc. Another shielding gas mixture,
argon-hydrogen, is used in the mechanized welding of light gauge
stainless steel, but because hydrogen can cause porosity, its uses are
limited.[20] Similarly, nitrogen can sometimes be added to argon to help
stabilize the austenite in austentitic stainless steels and increase
penetration when welding copper. Due to porosity problems in ferritic

23
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steels and limited benefits, however, it is not a popular shielding gas
additive.[21]
2.3.6 Materials
Gas tungsten arc welding is most commonly used to weld stainless
steel and nonferrous materials, such as aluminum and magnesium, but
it can be applied to nearly all metals, with notable exceptions being
lead and zinc. Its applications involving carbon steels are limited not
because of process restrictions, but because of the existence of more
economical steel welding techniques, such as gas metal arc welding
and shielded metal arc welding. Furthermore, GTAW can be performed
in a variety of other-than-flat positions, depending on the skill of the
welder and the materials being welded.[22]
1. Aluminum and magnesium
A TIG weld showing an accentuated AC etched zone
Close up view of an aluminum TIG weld AC etch zone

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Aluminum and magnesium are most often welded using alternating
current, but the use of direct current is also possible, depending on the
properties desired. Before welding, the work area should be cleaned
and may be preheated to 175 to 200 C (350 to 400 F) for aluminum
or to a maximum of 150 C (300 F) for thick magnesium workpieces
to improve penetration and increase travel speed. AC current can
provide a self-cleaning effect, removing the thin, refractory aluminium
oxide (sapphire) layer that forms on aluminium metal within minutes
of exposure to air. This oxide layer must be removed for welding to
occur. When alternating current is used, pure tungsten electrodes or
zirconiated tungsten electrodes are preferred over thoriated
electrodes, as the latter are more likely to "spit" electrode particles
across the welding arc into the weld. Blunt electrode tips are preferred,
and pure argon shielding gas should be employed for thin workpieces.
Introducing helium allows for greater penetration in thicker
workpieces, but can make arc starting difficult.
Direct current of either polarity, positive or negative, can be used to
weld aluminum and magnesium as well. Direct current with a
negatively charged electrode (DCEN) allows for high penetration.
Argon is commonly used as a shielding gas for DCEN welding of
aluminum. Shielding gases with high helium contents are often used
for higher penetration in thicker materials. Thoriated electrodes are
suitable for use in DCEN welding of aluminum. Direct current with a
positively charged electrode (DCEP) is used primarily for shallow
welds, especially those with a joint thickness of less than
1.6 millimeters (0.06 in). A thoriated tungsten electrode is commonly
used, along with a pure argon shielding gas.[23]
2. Steels
For GTA welding of carbon and stainless steels, the selection of a filler
material is important to prevent excessive porosity. Oxides on the filler
material and workpieces must be removed before welding to prevent
contamination, and immediately prior to welding, alcohol or acetone
should be used to clean the surface. Preheating is generally not
necessary for mild steels less than one inch thick, but low alloy steels
may require preheating to slow the cooling process and prevent the
formation of martensite in the heat-affected zone. Tool steels should
also be preheated to prevent cracking in the heat-affected zone.
Austenitic stainless steels do not require preheating, but martensitic

25
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and ferritic chromium stainless steels do. A DCEN power source is
normally used, and thoriated electrodes, tapered to a sharp point, are
recommended. Pure argon is used for thin workpieces, but helium can
be introduced as thickness increases.[24]
3. Copper alloys
TIG welding of copper and some of its alloys is possible, but in order to
get a seam free of oxidation and porosities, shielding gas needs to be
provided on the root side of the weld. Alternatively, a special "backing
tape", consisting of a fiberglass weave on heat-resistant aluminum
tape can be used, to prevent air reaching the molten metal.
4. Dissimilar metals
Welding dissimilar metals often introduces new difficulties to GTAW
welding, because most materials do not easily fuse to form a strong
bond. However, welds of dissimilar materials have numerous
applications in manufacturing, repair work, and the prevention of
corrosion and oxidation. In some joints, a compatible filler metal is
chosen to help form the bond, and this filler metal can be the same as
one of the base materials (for example, using a stainless steel filler
metal with stainless steel and carbon steel as base materials), or a
different metal (such as the use of a nickel filler metal for joining steel
and cast iron). Very different materials may be coated or "buttered"
with a material compatible with a particular filler metal, and then
welded. In addition, GTAW can be used in cladding or overlaying
dissimilar materials.
When welding dissimilar metals, the joint must have an accurate fit,
with proper gap dimensions and bevel angles. Care should be taken to
avoid melting excessive base material. Pulsed current is particularly
useful for these applications, as it helps limit the heat input. The filler
metal should be added quickly, and a large weld pool should be
avoided to prevent dilution of the base materials.[25]
2.3.7 Process variations
1. Pulsed-current
In the pulsed-current mode, the welding current rapidly alternates
between two levels. The higher current state is known as the pulse

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current, while the lower current level is called the background current.
During the period of pulse current, the weld area is heated and fusion
occurs. Upon dropping to the background current, the weld area is
allowed to cool and solidify. Pulsed-current GTAW has a number of
advantages, including lower heat input and consequently a reduction in
distortion and warpage in thin workpieces. In addition, it allows for
greater control of the weld pool, and can increase weld penetration,
welding speed, and quality. A similar method, manual programmed
GTAW, allows the operator to program a specific rate and magnitude of
current variations, making it useful for specialized applications. [26]
2. Dabber
The dabber variation is used to precisely place weld metal on thin
edges. The automatic process replicates the motions of manual
welding by feeding a cold filler wire into the weld area and dabbing (or
oscillating) it into the welding arc. It can be used in conjunction with
pulsed current, and is used to weld a variety of alloys, including
titanium, nickel, and tool steels. Common applications include
rebuilding seals in jet engines and building up saw blades, milling
cutters, drill bits, and mower blades.[27]
3. Hot Wire
Welding filler metal can be resistance heated to a temperature near its
melting point before being introduced into the weld pool. This
increases the deposition rate of machine and automatic GTAW welding
processes. More pounds per hour of filler metal is introduced into the
weld joint than when filler metal is added cold and the heat of the
electric arc introduces all of the heat. This process is used extensively
in base material build up before machining, clad metal overlays, and
hardfacing operations.
2.3.8 References
American Welding Society (2004). Welding Handbook, Welding Processes Part 1.

Miami Florida: American Welding Society. ISBN 0-87171-729-8.
ASM International (2003). Trends in Welding Research. Materials Park, Ohio:
ASM International. ISBN 0-87170-780-2
Cary, Howard B. and Scott C. Helzer (2005). Modern Welding Technology. Upper
Saddle River, New Jersey: Pearson Education. ISBN 0-13-113029-3.

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Jeffus, Larry (2002). Welding: Principles and Applications. Thomson Delmar.

ISBN 1-4018-1046-2.
Lincoln Electric (1994). The Procedure Handbook of Arc Welding. Cleveland:
Lincoln Electric. ISBN 99949-25-82-2.
Messler, Robert W. (1999). Principles of Welding. Troy, New York: John Wiley &
Sons, Inc. ISBN 0-471-25376-6
Minnick, William H. (1996). Gas Tungsten Arc Welding handbook. Tinley Park,
Illinois: Goodheart-Willcox Company. ISBN 1-56637-206-2.
Weman, Klas (2003). Welding processes handbook. New York: CRC Press LLC.
ISBN 0-8493-1773-8.
2.4 Safety issues :
Correct and safe arc welding station

Welding can be a dangerous and unhealthy practice without the proper
precautions; however, with the use of new technology and proper
protection the risks of injury or death associated with welding can be
greatly reduced.

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2.4.1 Heat and sparks
Because many common welding procedures involve an open electric
arc or flame, the risk of burns is significant. To prevent them, welders
wear protective clothing in the form of heavy leather gloves and
protective long sleeve jackets to avoid exposure to extreme heat,
flames, and sparks.
2.4.2 Eye damage
The brightness of the weld area leads to a condition called arc eye in
which ultraviolet light causes inflammation of the cornea and can burn
the retinas of the eyes. Goggles and helmets with dark face plates are
worn to prevent this exposure and, in recent years, new helmet
models have been produced featuring a face plate that self-darkens
upon exposure to high amounts of UV light. To protect bystanders,
transparent welding curtains often surround the welding area. These
curtains, made of a polyvinyl chloride plastic film, shield nearby
workers from exposure to the UV light from the electric arc, but should
not be used to replace the filter glass used in helmets.[26]
Those dark face plates must be much darker than those in sunglasses
or blowtorching goggles. Sunglasses and blowtorching goggles are not
adequate for arc welding protection.
In 1970, a Swedish doctor, ke Sandn, developed a new type of
welding goggles that used a multilayer interference filter to block most
of the light from the arc. He had observed that most welders could not
see well enough, with the mask on, to strike the arc, so they would flip

29
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the mask up, then flip it down again once the arc was going: this
exposed their naked eyes to the intense light for a while. By
coincidence, the spectrum of an electric arc has a notch in it, which
coincides with the yellow sodium line. Thus, a welding shop could be lit
by sodium vapor lamps or daylight, and the welder could see well to
strike the arc. The Swedish government required these masks to be
used for arc welding, but they were not used in the United States.
They may have disappeared.[27]
2.4.3 Inhaled matter
Welders are also often exposed to dangerous gases and particulate
matter. Processes like flux-cored arc welding and shielded metal arc
welding produce smoke containing particles of various types of oxides.
The size of the particles in question tends to influence the toxicity of
the fumes, with smaller particles presenting a greater danger.
Additionally, many processes produce various gases (most commonly
carbon dioxide and ozone, but others as well) that can prove
dangerous if ventilation is inadequate. Furthermore, the use of
compressed gases and flames in many welding processes pose an
explosion and fire risk; some common precautions include limiting the
amount of oxygen in the air and keeping combustible materials away
from the workplace.[28]
2.4.4 Interference with pacemakers
Certain welding machines which use a high frequency AC current
component have been found to affect pacemaker operation when
within 2 meters of the power unit and 1 meter of the weld site [29].

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3.0 WORKSHOP FACILITIES

The proposed workshop is planned in a sprawling 2.5 acre of N / A
land in the vicinity of Visakhapatnam. The following facilities are
planned to make this as a full fledged fabrication workshop.
3.1 Workshop Shed
Appx. 35,000 sq. feet ( appx. 1 acre of
land ) of industrial shed will be built in the area which would be closest
to the road / highway to facilitate heavy vehicle movement for
transporting heavy equipments, long and big diameter pipes, spool
pieces and other job work items. Also this will enable easy dumping
of raw materials ( metal sheets ) and consumables
like electrodes,
gas cylinders, power supply gadgets and other required welding

equipments.
3.2 Captive DG Set and Generator Room : A DG set of suitable
capacity is proposed to be provided to take care of APSEB power
outages and fluctuations so that all priority jobs can continue
uninterruptedly and delivery commitments are met satisfactorily.

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3.3
Tool Room cum Store House : A separate hall is proposed to

be constructed on an appx. 500 sq. feet area which will house all
important tools and valuable stores materials like consumables
and safety gadgets.
3.4
Safety
Showers
and
Fire
Fighting
Facilities
comprehensive network of fire fighting pipeline, fire hydrants,

hose pipes in glass door housings, safety showers, and a fire
water pond of suitable capacity will be provided as the repair job
works relate to Oil, Gas & Petrochemical Industries which deal
with highly inflammable petroleum / petrochemical products.
3.5
Administration Building :
A separate plot of appx. 2000 sq.
feet area in the heart of the layout shall be used to construct a

modern Administrative Block comprising Directors / Partners
offices,
Accounts
section,
Inventory
Control
section,
Shift
Supervisors room and Workers change room etc.

3.6
Workshop & Welding Equipments : Following machineries

including welding equipment will be purchased and installed in
the workshop.
Rs. 000
1. Arc based TIG Welding machine 300 A - 2 No.
250
2. Auto TIG pipe welding machine - 2 No.
100
3. Micro TIG welding machine - 1 No.
50
4. Inverter based MMA welding machine 2 No.

5. Welding Torches Assorted 20 No.
6. Power Supply Kits / Rectifiers 2 No.
80
20
100
7. Inert Gas cylinders Argon & Nitrogen 20 No.
20
8. Plasma Arc Welding & Cutting machines
100
9. Lathe machines 1 big and 1 small size 1 No.

10.
350
Pipe Bending machines, upto 12 mm and one higher size :

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11.
Shearing machine , 1 big and 1 small
30
12.
Gas cutting sets. 2 No.
20
13.
Chain Pulley Blocks / Overhead Crane
50
14.
Safety equipment like gloves, glasses etc.
30
-----------1200
Rs. 12 Lakhs
4.0 COST ESTIMATE

A total of 400 job work are expected to be executed in one calendar
year. It is estimated that each work order will be of quantity 300 to
500 Kgs. Weight. As per SS fabrication rates, it is assessed that @ Rs.
120 / Kg of labor cost, the order value for an avg. 400 Kg job would
work out to Rs. 48,000 each. On an avg. daily output would be 400 /
300 working days or 1.33 job work per day. Financially, the value of
daily out put is expected to be Rs. 63,840 per day. For handling such
assignments, a broad assessment of fixed capital expenditure as
covered in the chapter 3, as well as the operating cost has been made
in the following paras.
4.1 CAPITAL EXPENDITURE :
Estimated capital cost for the facilities as mentioned in the chapter 3 is
given as hereunder :
S.No
1
2
3
Item
Est. Cost
Land 2.5 acre N/A Plot

Workshop Shed 35,000 sq. feet
Captive DG set, 400 KVA
( Rs. Lakhs )
50
70
10
Remarks

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4
5
6
7
8
Tool Room & S / House 750 sqf

Administrative building, 1500 sqf
Fire Fighting Facilities
Workshop machineries
Power feeder & installation
TOTAL
7.5
15
10
12
4
178.5
See chap. 3
See chap. 3
4.2 WORKING CAPITAL REQUIREMENT :

The
overall
operating
cost
is
distributed
over
labor,
power,
consumables and overheads / contingencies. The consumables include

electrodes, inert gases, flux or filler materials. From the experience
and the statistical data, it is estimated that cost factor wise unit cost
of 125 / Kg can be distributed as follows :
1. Manpower / labor
40
2. Power / Electricity
10
3. Consumables
20
4. Contingencies
5. Overheads
10
6. Margins
35
----------------120
-----------------
4.2.1 Manpower Requirement : ( Basis 2 shift operation )

Amount in Rs.
Manpower
No. Monthly wages
Total
1.
General Manager
30,000
30,000
2.
Shift Supervisor
10,000
20,000

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3.
Skilled welders
10
4.
Skilled machine operators
5.
semi / unskilled workers
15,000
1,50,000
15,000
30,000
10
9,000
90,000
6. Leave coverage staff
12,000
60,000
7. Accountant / Clerks
10,000
50,000
8. Security staff watchmen
4
7,500
30,000
------------------------------------
Monthly wage bill
39
4,60,000
------------------------------------4.2.2 Power Requirement : ( Basis 2 shift operation )

As such the power consumption depends on the quantum of
fabrication, repair and welding work required for each job. The
installation would be provided a guaranteed 100 HP feeder lines, to
cater to a maximum load. However, as per the cost index, we estimate
that a total of Rs. 1,33,000 per month would be spent on electricity
bills alone.
4.2.3 consumables :
Similarly, the consumables are welding electrodes, safety gadgets like
glasses, hand gloves, metal filler materials, potable and non potable
water. These are all linked with the quantum of work load or jobs on
hand. Therefore as per the cost index, it is estimated that a monthly
expenses of Rs. 2,66,000 would be incurred on the consumables.
4.2.4 Overheads & Contingencies :

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Cell : 09860240852

As per the job related index, it is estimated that a total of Rs. 2 Lakhs
will have to be appropriated to take of this accounting head on each
month basis.
4.2.5. TOTAL WORKING CAPITAL 60 DAYS BASIS :
If we sum up all above operating expenses, and consider 2 months
minimum working capital provisions, it works out to be Rs.
21,20,000.
4.3 TOTAL CAPITAL ( FIXED + WORKING ) REQUIREMENT :
To sum up fixed capital and working capital ( 60 days ), the total
project cost works out to be Rs. 1,99,70,000.
4.3 IMPLEMENTATION SCHEDULE :
As the machineries required to set up this workshop are quite
standardized and readily available in the market, the only time factor
from the commencement till completion is civil and mechanical work
required to complete the Workshop shed and other civil construction
like Administrative Building, Tool Room cum Store House and the
related
interior works. It is assessed that the entire project can be
completed in about 3 to 4 months time once the funds are

appropriated and the construction plans are approved from the
Municipal / relevant Govt. Authorities.

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5.0 FINANCIAL ANALYSIS

5.1 PROFITABILITY :
INCOME :
-
No. of Jobs to be done / year :
Revenues from each job = Rs. 400 Kg x 120 / Kg

= Rs. 48,000
Expected Revenues / year = 400 x Rs. 48,000
400
= 1,92,00,000 . A
EXPENSES :
-
Salary & Wages
=
=
12 x 4,60,000
Rs. 55,20,000 .. B

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Electricity Expenses
12 x 1,33,000
= Rs. 15,96,000 C
-
Consumables
12 x 2,66,000
31,92,000 .. D
Overheads & Contingencies =

=
12 x 2,00,000
Rs. 24,00,000 .. E
Total Expenditure = B + C + D + E
=
Therefore Yearly Profitability
Rs. 1,27,08,000 F
=
AF
Rs. 64,92,000
5.2 Net Profit after Tax :

Yearly Revenues
64.92 Lakhs
Service Tax Provision @ 10.4 = 6.75 Lakhs

Income Tax on Gross Profit
@ 30 % appx.
Therefore Net Profit after Tax
5.3 Rate of Return
= Rs. 17.45 Lakhs

Rs. 40.72 Lakhs
Net profit / Total Capital Exp.
40.72 / 199.7 x 100
20.4 %

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5.4 Ratio of Sales / Capital Cost
192 / 199.7
96.1 %
6.0 HOW TO SET UP AN ENTERPRISE:

6.1. DECISION TO BE AN ENTREPRENEUR:
The following two important considerations have to be immediately
addressed before starting an enterprise.
6.2 CHOOSING YOUR FORM OF BUSINESS ORGANISATION :
The business could be
proprietary, partnership or a private limited
company. If the number of share holders are more and exceed

beyond a number specified by the Company law, the company
becomes a public limited company and no more remains private
limited. Consult a chartered accountant for more information on
company formation.

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6.3 MAKING A PRODUCT CHOICE
Make a careful analysis of the product or service you are choosing,
sometimes in short run, there is a shortage of a particular commodity in
the market, you may even come to know you will get almost two weeks in
advance to supply fresh stock. Does that mean you can jump into that
business. First thing in such a condition is to analyze the situation. Keep
in mind that shortages may occur due to a number of reasons and a
good entrepreneur always examine the pros and cons before setting up a
business. It may tempt you to think that perhaps you have found a good
businesses idea. But do not be easily influenced by these temporary
shortages. Carefully analyze the future demand-supply position of the
product, say for the next 3 to 5 years. Only when you are certain that the
shortage will remain there for considerable period of time and you would
be able to generate enough profits in the very first or second year of
operation and that you can produce quality item within an acceptable
pricing, then only you should venture into such a business.
There are many organizations, which are in possession of information
on business opportunities; you can contact these organizations to get
an idea about products
1. Absolute Technologies Research Center
2. District Industries Centers
3. Centers for Entrepreneurship Development
4. Small Industry Service Institutes
5. Industrial Extensions Bureaus (These exist in several states) they are known
by such names as index, Udyog Mitra, Udyog Sahayk and so on).
6. National Industrial Development Corporation, New Delhi
7. Khadi and Village Industries Commission, New Delhi
8. Commissioner of Cottage Industries
9. Entrepreneurship Development Institute of India, Ahmedabad
10. National Institute of Entrepreneurship and Small Business Development,
New Delhi
11. National Institute of Small Industry Extension and Training, Hyderabad

40
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This information could be in the form of:
Project profiles
Feasibility studies
Industry studies
Area development studies.
6.4
OTHER IMPORTANT DECISIONS TO BE MADE:
LOCATION OF INDUSTRY
PREPARATION OF BUSINESS PLAN

SOURCING PROCESS, RAW MATERIALS, MACHINERIES
INFRASTRUCTURE - LAND & BUILDING, WATER AND POWER
6.5
LEGAL ASPECTS TO COMPLY

* PROVISIONAL
REGISTRATION
OF
THE
UNIT
IN
THE
CONCERNED STATE / UNION TERRITORY

* DOCUMENTS
REQUIRED
FOR
REGISTRATION
ON
PROVISIONAL BASIS
* PERMISSIONS/CLEARENCES REQUIRED
7.0 CENTRAL GOVT. POLCIY INITITATIVES TO INCREASE EXPORTS :
Since agricultural exports offer greatest potential for increasing the
farm income, tackling unemployment, earning foreign exchange, the
Govt. has been providing a thrust to agricultural exports by building
upon conducive policy environment. A number of policy changes have
been introduced to make agricultural exports more viable. Some of
the measures include:
Import of capital goods on concessional custom duty
Zero duty in case of CIF value of capital goods of Rs. 5 crores or more
for agriculture, aquaculture, horticulture, floriculture etc. with export
obligation of 6 times CIF value of CG on FOB prices or 5 times CIF
value of CG on NFE basis with 6 years period for fulfillment of export
obligation.
Permitting 50% of the production in value terms to be sold in the

41
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Domestic Tariff area subject to positive net foreign exchange earnings.
.
Entitlement of Special Import Licnece ;

- 1 % additional SIL for export of products like fruits, vegetables,
floriculture and horticulture products provided export of these
items is more than 10% of exports during that period.
7.1 INCENTIVES & BENEFITS AVAILABLE FROM THE GOVERNMENT:

The existing procedure of issuing eligibility certificate by the District
Industries Centre and admission of claim by Maharashtra State Electricity Board will
continue.
7.2 Special Tax Concessions
The Government offers a wide range of concessions to investors in India to

promote industrial growth and exports. The important concessions include :
Deduction of preliminary and preoperative expenses in setting up a project.
Complete tax exemption for profits from exports.
Five year tax holidays within the first eight years of commercial operations for
100% EOUs and units in EPZ.
Deduction of 30% of gross total income for 10 years for new industrial
undertakings established by companies.
Deduction of capital research and development expenditure.
7.3 Relief for Foreign Nationals :

A "Short Stay" exemption applies where all the following conditions are met :
The individual is a foreign national employed by a foreign company not doing
business in India
His stay in India does not exceed 90 days in a tax year (extended to 183 days in
certain tax treaties); and
His remuneration is not deductible in arriving at his employer's Indian taxable
income.
- Foreign technicians in certain prescribed areas are eligible for a special exemption
from tax on their salary income. The tax on their salaries could be paid by their
employees without such tax being held as part of salary for tax purposes. This
special concession is available for four years and is also fully deductible for
corporate tax purpose.
Foreign nationals are exempt from tax for home leave travel benefits for
themselves and their families, provided by the employer.

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7.4 SSI Regulations:
7.4.1
-
FOREIGN DIRECT INVESTMENT APPROVAL POLICY HIGHLIGHTS

An industrial undertaking, i.e., a company with interests in
industry can invest upto 24% equity in a SSI unit.
- If the equity goes beyond 24%, the industrial unit loses its SSI
status.
- There is no restriction on the extent of equity that can be held
by a Non-resident Indian (NRI) as an individual/partner in a SSI
unit.
- Automatic approval is granted by Reserve Bank for foreign
investment upto 51% in 35 high priority industries.
- Investors need to file an application with the Reserve Bank of
India (RBI) in the prescribed format and approval is ordinarily
granted within 15 days.
- For foreign investment outside the automatic route, clearance
has to be obtained from Foreign Investment Promotion Board
(FIPB).
- Applications for setting up a 100% Export Oriented Unit are
also required to be filed with the SIA.
- For setting up an unit in an Export Processing Zone (EPZ),
application has to be filed with the Development Commissioner
of the concerned EPZ.
- Under automatic procedures, foreign technology agreements
are being permitted in respect of industries that are designated
as high priority industries.
- The use of foreign brand names and / or trade mark of goods
is
also
now
being
permitted
freely.
- To provide access to international markets, majority foreign
equity holding upto 51% equity is being permitted for
international trading companies that are primarily engaged in
export activities.
7.4.2
OPERATING
ENVIRONMENT
AND
TAXATION
POLICIES
FDI can be in the form of cash or capital goods and there is no
minimum cash requirement, Branch organisations are
permitted only in a few specified service industries such as
banking, shipping, airlines etc., or export-oriented ventures.

43
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Certain industries, as mentioned in the industrial policy, require
license by their nature, while others require such a license only
if
located
in
the
proximity
of
a
large
city.
This licensing applies uniformly to domestic and foreign
investment.
Also certain products are reserved for the small scale sector
and large undertakings are ordinarily permitted equity
participation up to 24 percent of total shareholding in these.
There is no restrictions regarding access to domestic markets
or
user
of
foreign
brand
names.
A work-permit as such is not required for expatriate employees,
but permission to stay is required from the Government where
the period of stay is more than three months.
RBI permission is also required to employ expatriates where
remittance of salary in foreign exchange is envisaged.
7.4.3
FDI
APPROVAL
METHODOLOGY
The highlight of the policy is the promoted prducts category
(Priority Sector in FDI)where approval for up to 51% equity
investment proposals is automatic and where only an
application to the Reserve Bank of India is required. This
procedure is also applicable to investment proposals involving
trading companies and hotels and the tourism related industry.
Investment proposals involving greater than 51% equity or
involving products not in the promoted category require
approval from the Ministry of Industry through the specially
empowered Foreign Investment Promotion Board which can
negotiate terms directly on major proposals in their totality and
free
from
any
predetermined
parameters
And there are special facilities and incentives for export
oriented units and investment in units located in any of the
export
promotion
zones.
For further information regarding automatic approvals, write to
CONTROLLER
EXCHANGE
CONTROL
DEPARTMENT
RESERVE
BANK
OF
INDIA
NEW
CENTRAL
OFFICE
BUILDING
SHAHEED
BHAGAT
SINGH
ROAD
BOMBAY
400023
TEL:
22861602,
22860604
FAX: 22864667, 22861892

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For proposals not coming in the automatic approval category
write to:
SECRETARY
SECRETARIAT OF INDUSTRIAL APPROVAL (SIA)
DEPARTMENT OF INDUSTRIAL APPROVAL
MINISTRY OF INDUSTRY
UDYOG BHAWAN
NEW DELHI- 110001
TEL: 23014005
FAX: 23011770
7.4.4 NON-RESIDENT INDIANS (NRI) INVESTMENT
A liberal policy for permitting investment of upto 100% equity

wth full repatriation facilities in industrial ventures in high
priority industries by Non-Resident Indians (NRIs) and Overseas
Corporation Bodies (OCBs) has been announced. It has also
been decided to permit 100% NRI investment with full
repatriation benefits in Export/ Trading/ Star Trading House also.
REPATRIATION OF DIVIDENDS
India permits free repatriation of profits after payment of the
applicable taxes for all approved investments other than in few
specified
industries.
In these consumer goods industries, repatriation of profits is
allowed only out of net foreign exchange earnings during an
initial period of seven years from the commencement of
production.
However, there are procedural requirements for obtaining RBI
approval for repatriation of Branch profits or dividend by an
Indian company which has more than 40 percent of equity.
On disinvestment, capital may be repatriated subject to the sale
price being considered reasonable by the RBI and payment of
applicable
taxes.
FOREIGN INVESTMENT PROMOTION BOARD
Government of India has established a Special Empowered

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Board called Foreign Investment Promotion Board in the Ministry
of Industry, to negotiate with large international firms and to
approve direct foreign investment in selected areas.
Objective
The objective of this Board will be to invite and facilitate
investment in India by international companies in projects which
are considered to be of benefit to the Indian economy and do
not fall within the parameters of the existing policy for clearance
of foreign investment proposals.
Functions
The functions of the Board shall mainly comprise: Expeditious
clearance of proposals;
Establishment of contact with and inviting selected international
companies to invest in India in appropriate ventures; and
To periodically review the implementation of projects cleared by
the Board. The Board will provide a single window clearance for
all aspects of projectproposals considered by it. No formal
application forms are prescribed; the entrepreneur can directly
correspond with the Board.
7.4.5
NRI
Investment
Approval:
- Non-Resident Indians (NRIs) allowed to invest upto 100%

equity with full benefits of repatriation in most industry sectors.
- There is no restriction on the extent of equity that can be held
by a Non-Resident Indian (NRI) as an individual/partner in a SSI
unit.
- NRIs and Overseas Corporate Bodies (OCB) predominantly
owned by NRIs are allowed to invest upto 100% foreign equity in
high priority industries with full repatriation benefits.
- To set up large industrial ventures in products reserved for the
small scale sector, the unit has to take up a 75% export
obligation.
7.5 INCOME TAX BENEFITS FOR EXPORTERS
Income Tax exemption upto 50% is granted on earnings from
exports of projects and consultancy services under Sections 80-

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HHB and 80-O of Income Tax Act respectively. However check
the latest policies from a reputed Chartered Accountant.
8.0
FINANCING ARRANGEMENTS:
o
o
o
o
o
o
o
o
o
Institutional arrangement
Credit to SSI Sector from Public Sector Banks
Credit to tiny sector
Nayak Committee recommendations
Reserve Bank measures
Monitoring
Fresh initiatives announced in the Budget
Kapur Committee recommendations
Amendment of interest on delayed payment act
8.1 Small Industries Development Bank of India (SIDBI)

o
o
o
o
o
o
Direct Assistance Schemes

Indirect Assistance Schemes
Promotional and Development Activities
Performance
Measures to simplify Rules/ Regulations
Schemes of SIDBI
8.2 State Financial Corporations (SFCs)

8.3 National Small Industries Corporation (NSIC)
o
o
o
o
o
o
o
o
9.0
Bill Financing
Working Capital Finance
Export Development Finance
Equipment Leasing Scheme
Raw Materials Procurement Support
Marketing Assistance Programme & Exports Assistance
Stores Purchase Programme
Single Point Registration Scheme & other services
SMALL SCALE INDUSTRIES :
9.1 Registering Your SSI Unit :

The main purpose of Registration with the Directorate of Industries of
the respective State Gvernments, is to maintain statistics and

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maintain a roll of such units for the purposes of providing incentives
and support services.
States have generally adopted the uniform registration procedures as
per the guidelines. However, there may be some modifications done
by States. It must be noted that small industries is basically a state
subject. States use the same registration scheme for implementing
their own policies. It is possible that some states may have a 'SIDO
registration scheme' and a 'State registration scheme'.
42
9.2 Benefits of Registering

The registration scheme has no statutory basis. Units would
normally get registered to avail some benefits, incentives or support
given either by the Central or State Govt. The regime of incentives
offered by the Centre generally contains the following:
- Credit prescription (Priority sector lending), differential rates of
interest etc.
- Excise Exemption Scheme
- Exemption under Direct Tax Laws.
- Statutory support such as reservation and the Interest on Delayed
Payments Act.
(It is to be noted that the Banking Laws, Excise Law and the Direct
Taxes Law have incorporated the word SSI in their exemption
notifications. Though in many cases they may define it differently.
However, generally the registration certificate issued by the
registering authority is seen as proof of being SSI).
States/UTs have their own package of facilities and incentives for
small scale. They relate to development of industrial estates, tax
subsidies, power tariff subsidies, capital investment subsidies and
other support. Both the Centre and the State, whether under law or
otherwise, target their incentives and support packages generally to
units registered with them.
9.3 Objectives of The Registration Scheme
They are summarised as follows:
- To enumerate and maintain a roll of small industries to which the
package of incentives and support are targeted.
- To provide a certificate enabling the units to avail statutory benefits
mainly in terms of protection.

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- To serve the purpose of collection of statistics.
- To create nodal centres at the Centre, State and District levels to
promote SSI.
9.4 Features of The Scheme
Features of the scheme are as follows:
- DIC is the primary registering centre
- Registration is voluntary and not compulsory.
- Two types of registration is done in all States. First a provisional
registration certificate is given. And after commencement of
production, a permanent registration certificate is given.
- PRC is normally valid for 5 years and permanent registration is given
in perpetuity.
9.5 Provisional Registration Certificate (PRC)
- This is given for the pre-operative period and enables the units to
obtain the term loans and working capital from financial
institutions/banks under priority sector lending.
- Obtain facilities for accommodation, land, other approvals etc.
- Obtain various necessary NOCs and clearances from regulatory
bodies such as Pollution Control Board, Labour Regulations etc.
9.6 Permanent Registration Certificate
Enables the unit to get the following incentives/concessions:
- Excise exemptions
- Income-Tax exemption and Sales Tax exemption as per State Govt.
Policy.
- Incentives and concessions in power tariff etc.
- Price and purchase preference for goods produced.
- Availability of raw material depending on existing policy.
9.7 Procedure For Registration
Features of the present procedures are as follows:
- A unit can apply for PRC for any item that does not require industrial
license which means items listed in Schedule-III and items not listed in
Schedule-I or Schedule-II of the licencing Exemption Notification. Units
employing less than 50/100 workers with/without power can apply for
registration even for those items included in Schedule-II.
- Unit applies for PRC in prescribed application form. No field
enquiry is done and PRC is issued.
- PRC is valid for five years. If the entrepreneur is unable to set up the
unit in this period, he can apply afresh at the end of five years period.

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- Once the unit commences production, it has to apply for permanent
registration on the prescribed form.
The following form basis of evaluation:
- The unit has obtained all necessary clearances whether statutory or
administrative. e.g. drug license under drug control order, NOC from
Pollution Control Board, if required etc.
- Unit does not violate any locational restrictions in force, at the time
of evaluation.
- Value of plant and machinery is within prescribed limits.
- Unit is not owned, controlled or subsidiary of any other industrial
undertaking as per notification.
9.8 De-Registration
A Small Scale Unit can violate the regulations in the following ways
which will make it liable for de-registration:
- It crosses the investment limits.
- It starts manufacturing any new item or items that require an
industrial license or other kind of statutory license.
- It does not satisfy the condition of being owned, controlled or being
a subsidiary of any other industrial undertaking.
9.9
Enhancement of investment limits in the Small Scale

and Ancillary Industrial Undertakings - Circular 4/91-SSI
Bd. Dated 7.5.91
The Government had issued a Press Note on 19th March, 1985,
raising the investment limits in small scale industrial
undertakings from Rs. 2 million to Rs. 3.5 million and for
ancillary industrial undertakings from Rs. 2.5 million to Rs. 4.5
million in plant and machinery. Keeping in view the escalation
in the cost of plant and machinery since then, Government had
been considering the question of upward revision of these
investment limits.
Accordingly, Government had placed a statement in (both
Houses) Parliament on 31st May, 1990 outlining certain policy
measures to be adopted including enhancement of investment
ceiling of small scale/ancillary industrial undertaking. In
pursuance of this, a draft notification for changing the
definition (enhancing the limits) of small scale/ ancillary
industrial undertakings was placed before the Parliament on

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7th August, 1990, as per the provisions of Section 11 B (3) of
the Industries (Development & Regulation) act, 1951.
Parliament did not disapprove or modify the draft notification in
any way within the period stipulated in Section 11B(3) of 1
(D&R) Act, 1951.
44
9.10 cordingly, Gazette Notification No. S.O. 232 (E) dated 2nd April,
1991 has been issued (copy enclosed) under sub-section (1) of
Section 11B and sub-section (1) of Section 29b of the Industries
(Development & Regulation) Act, 1951 enhancing investment
limits in fixed assets in plant and machinery, whether held on
ownership term or by lease or by hire purchase, for small scale
and ancillary industrial undertakings as per details below:No. Category Of Undertakings
Limit in fixed assets in plant
and machinery increased investment
From
To
a. Small Scale Industrial Undertaking Rs. 3.5 million ($79 thousand)
Rs. 6 million ($134 thousand)
b. An Industrial Undertaking referred to in (a) above which undertakes
to export atleast 30 percent of its annual production by the end of 3rd
year from the date of its commencing production
Rs 3.5 million
($79 thousand)
Rs. 7.5 million ($167
thousand)
c. Ancillary Industrial Undertaking
thousand )
thousand)
(The investment limit has since been enhanced to Rs. 10
million ($224 thousand) both in respect of SSI and
ancillary industrial undertakings w.e.f. 24.12.1999) The
definition for Export oriented units as at (b) above
dropped
from
December
1997.
Besides the criterion of investment ceiling an ancillary industrial
undertaking is one which is engaged or is proposed to be
engaged in the manufacture or production of
parts, components, sub-assemblies, tooling or intermediates of
the rendering of services, and the undertaking supplies or
renders or proposes to supply or render not less than 50 per
cent of its production or services, as the case may be, to one or
more
other
industrial
undertakings.
An undertaking within the investment limits in plant and

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machinery under different categories and other requirements
mentioned above would now be exempt from the licensing
provisions of the Industries (Development & Regulation) Act,
1951. The various conditions and stipulations regarding
industrial licensing mentioned notification
No. S.O. 629 E dated 30th June, 1988 would, however, continue
operate except for investment ceiling for SSI which have now
been revised. This will also, be subject to the condition that such
an undertaking shall not be a subsidiary or owned or controlled
by
any
other
undertaking.
2. Certain clarifications and explanations have been issued from
time to time by the Government regarding computation of
investment in fixed assets in plant and machinery of a small
scale/ancillary industrial undertaking. These would continue to
hold good and are reproduced below for the sake of
convenience.
In calculating the value of plant and machinery, the original
price paid by the owner, irrespective of whether the plant and
machinery are new second hand, will be taken into account.
The cost of equipment such as tools, jigs, dies, moulds and
spare parts for maintenance and the cost of consumable stores
will be excluded computing the value of plant and machinery.
Similarly, the cost installation of plant and machinery will also
be
excluded.
The cost of R&D equipment and pollution control equipment will
be excluded in computing the value of plant and machinery.
In the case of imported machinery, import duty will be included,
but not the miscellaneous expenses like transportation from the
port to the site the factory, demurrage if any paid at the port
and premium if any paid for import entitlement or import of
machinery. However, shipping charges, customs clearance
charges and sales tax should be included in computing the cost
of
plant
and
machinery.
The cost of generation sets, if any, installed will be excluded.
Similarly, the cost of extra transformer, etc. which has to be
installed by a unit as per the regulations of State Electricity
Board
would
also
be
excluded.
The bank charges and services charges paid to the National
Small Industries Corporation or to the State Small Industries

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Corporation will be excluded in computing the cost of plant and
machinery.
The cost involved in procurement/installation of cables, wiring
bus-bars, electrical control panels (not those mounted on
individual machines), OCBs/MCBs etc.; which are necessarily to
be used for imparting electrical power to the plant &
machinery/safety measures is not to be taken into account for
computing the cost of plant and machinery for determining the
status
of
an
industrial
undertaking.
Cost
of
gas
producer
plant
will
be
excluded.
In case of industrial undertakings which graduate to medium
scale units by process of natural growth will get raw material
assistance from DGTD, for a period of six months from the date
of registration/grant of industrial license/COB license at the
same level as earlier approved by the Director of Industries/DC
(SSI).
All units which cross the limit of investment as now prescribed in
the definition of small scale/ancillary undertakings by process of
natural growth will need registration with DGTD or other
technical authorities. The units engaged in the manufacture of
such items which are not eligible for exemptions from licensing
provisions in terms of any
earlier notification issued by the Department of Industrial
Development (e.g. units engaged in the manufacture of items
exclusively reserved for small scale sector, units requiring
foreign exchange for import of components and raw materials in
excess of the prescribed limits and industries requiring special
regulation) will need a 'carrying-on-business' license before
crossing this limit. Such units will have to submit their
applications in he prescribed manner to the Secretariat for
Industrial Approvals. In granting the registration DGTD/Technical
authorities, or the COB license, the export obligation on such
units consistent with the policy or protection to the small scale
sector.
Directors of Industries will keep a special watch over the units
which are about to cross the upper limits of the definition so as
to enable a smooth transfer of units from the Directorate of
Industries to DGTD/technical authorities and that the units take
timely action to obtain the COB licenses, wherever necessary.
However, if a small scale unit wishes to have some more time
for the transfer to the DGTD list, a grace period upto 2 years will
be allowed during which period it will continue to enjoy all the
facilities under the small industries programme. A special report

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on such units will be made by the Directors of Industries to the
Development
Commissioner,
Small
Scale
Industries.
Monitoring of the export obligation will be done by the office of
the
Chief
Controller
of
Imports
&
Exports.
10.0 THE FACTORIES ACT:

10.1 Objectives
- To ensure adequate safety measures and to promote the health
and welfare of the workers employed in factories.
- To prevent haphazard growth of factories through the provisions
related to the approval of plans before the creation of a factory.
10.2 Scope and coverage
- Regulates working condition in factories.
- Basic minimum requirements for ensuring safety, health and
welfare of workers.
- Applicable to all workers.
- Applicable to all factories using power and employing 10 or more
workers, and if not using power, employing 20 or more workers on
any day of the preceding 12 months.
10.3 Main provisions
-
Compulsory approval, licencing and registration of factories.

Health measures.
Safety measures.
Welfare measures.
Working hours.
Employment of women and young persons.
Annual leave provision.
Accident and occupational diseases.
Dangerous operations.
Penalties.
Obligations and rights of employees. when to consult and refer
- On starting a factory.
- Throughout the life of the factory.

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11.0 THE INDUSTRIAL ESTABLISHMENT ACT
11.1 Objectives
- To regulate the conditions of recruitment, discharge,
disciplinary action, holidays, etc. of workers employed in
industrial undertakings and establishments.
- Applicable to industrial establishments wherein 50 or more
workmen are or have been employed in the preceding 12
months.
- Central and state governments can make this Act applicable to
establishments employing less than 50 persons, as in the case
of UP and West Bengal.
- In Assam it is applicable to concerns employing 18 or more
workers.
- Submission of draft standing orders.
- Certifications of standing orders.
- Modification of standing orders.
- Registration of standing orders.
- Amendments of the Act.
- Penalties.
- Obligations and rights of employers.
- Obligations and rights of employees.
When to consult and refer
- At the time of expansion of the concern, when the number of
workmen may increase, coming within the provision of the Act.
- When revising standing orders.
12.0 THE MINIMUM WAGES ACT :
To determine the minimum wages in industry and trade where
labour organisations are non-existent or ineffective.
- Applicable to all employees engaged to do any work, skilled,
unskilled manual or clerical, in a scheduled employment,
including out-workers.
- Fixation of minimum wages.

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- Fixation of minimum wage of employees.
- Procedure for fixing and revising minimum wages.
- Obligation of employees.
- Rights of workers.
When to consult and refer
- At the time of fixation of salary of new/existing employees.
13.0
NATIONAL SMALL INDUSTRIES CORPORATION LTD.
Announcements: Mission: To develop Small Industries / Enterprises & Enhance

their Competencies.
The National Small Industries Corporation Ltd.,
Estate,
New Delhi - 110020 (INDIA)
NSIC Bhavan, Okhla Industrial
13.1 Corporate Profile :

Since its establishment, NSIC has been providing succour to First Generation
Entrepreneurs and Small Scale Industries (SSIs) and enterprises through its
various innovative Schemes like providing machinery and equipment including
imported ones at the doorsteps of entrepreneurs on Hire Purchase and Lease
Terms; stimulating marketing of products and services of SSIs to Government
Departments and other agencies by identifying capable SSI Units and creating
confidence in purchasing agencies about them; undertaking exports for and on
behalf of export oriented entrepreneurs; providing critical raw materials and
components which go in production of various products; arranging training in
technical trades both traditional and high-tech; providing common facility support
through its technology centres located at different parts of the country and
sensitising entrepreneurs to technology issues through tech-missions abroad/
facilitating enterprise to enterprise co-operation under its International
programmes.
Recent transition of industrial climate and liberalisation of total economic
environment within the country and abroad has witnessed tremendous changes
in the domestic as well as international markets. These sudden changes have
thrown up as many opportunities as challenges to the small scale enterprises
every-where. NSIC has been able to prove its strength dynamically showing its
progressive attitude towards modernisation, upgradation of technology, quality
consciousness, strengthening linkages with large and medium scale enterprises
and boosting exports.

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NSIC has always been moving with the times and fine tuning its Schemes to the
requirement of SSIs in the wake of ever-changing production techniques and
economic environment. It has been sensitizing the SSIs to various technological
issues through dissemination of information, tech-missions abroad and through
seminars & conferences. NSIC has initiated international programmes with focus
on enterprise to enterprise linkages and aiming at internationalisation of Indian
small enterprises.
13.2 Objectives of the NSIC :
1. Stimulation & Support : - To develop new enterprises through financial,
marketing and technology support schemes.
2. Sustenance :
- Raw material supply
- Bill Financing.
- Human
resource development.
3. Growth
- Strategic alliances with institutions.
- International
Programmes.
- Technology information dissemination and awareness
programmes.
The saga of small industries in India is inalienably the saga of The National Small
Industries Corporation Limited. Presently, there are more than 3 million Small
and Medium Industrial Enterprises in India, large number of which have
competence for long term business relationships and who can supply more than
5000 products to the global community.
NSIC has experience in setting up Industrial Estates and it has the capability to
undertake similar projects abroad. Building upon its experience in running
various Technical Services Centres, NSIC has setup technical & vocational
training centres abroad. It has already executed several projects under the
sponsor-ship of the Ministry of External Affairs, Government of India:
13.3 STANDARDS FOR GENERAL PROCEDURES:
We will respond to all written inquiries within 10 working days. In case of a likely or inevitable
delay in decision-making or when a issue is disputed, we will promptly communicate the reason
on our own initiative. We shall endeavour to decide applications for assistance sought from the
Corporation within 4 weeks from the receipt of the completed application.
13.4 FINANCIAL SERVICES:

Finance of Plant & Machinery to small scale industrial units/ enterprises on
installment terms

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H.P.Scheme
Eligibility
Small Scale Industries(SSIs) / Enterprises Registered with :
(i) Directorate of Industries
or
(ii) District Industries Centre
SSI Units :
Industrial units having investment in Plant & Machinery whether held on
ownership terms or by lease or by hire purchase as per the limits prescribed by
the Govt. of India.
(Original price paid by the owner, irrespective of whether the plant & machinery
are new or second hand is taken into account for computing the ceiling of SSIs).
Application Procedure :
To apply in prescribed application form duly signed (in triplicate).

The application must accompany the following :
1.
Application fee ( by Bank Draft / Pay Order in favour
of NSIC Ltd.)
2.
Entrepreneurs Background
3.
Project report showing economics of the project with
a) Financial viability
b) Marketing viability
c) Technical viability &
d) Cash flow statement
4. Attested photocopy of valid SSI registration certificate
5. Declaration as prescribed in the form
6. Affidavit as prescribed in the form
7. Passport
size
photograph(s)of
proprietor/partners/directors etc. duly attested by
notary public to be affixed on the copies of application
form.
8. An affidavit duly notarised of the prop./ each
partner/each director giving full particulars of
immovable property held by him/her own name & also
undertake that he/she shall not part with the property
except with prior written consent of NSIC.
9. Quotation from an approved supplier of NSIC in
favour of NSIC A/c Units name for the Plant and
Machinery required.
10. Other documents as mentioned in the application
form.
The Process:

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Cell : 09860240852
The unit to submit the application (in triplicate) to concerned

Regional Offices or Branch Offices.
NSIC communicates the decision on application to the unit in the
form of Acceptance Letter or Rejection Letter.
After acceptance of application, Offer Letter is issued asking for
deposit of Earnest Money with the Regional Offices/ Branch Offices
of NSIC
After deposit of Earnest Money SSI Unit enters into Agreement with
NSIC and submit securities as per Offer Letter.
50
A supply order is placed on the supplier who in turn sends the order
confirmation (for imported machines, an application for import
license is made, if required).
At this stage, other formalities like deposits of balance Earnest
Money, if any, Sales Tax, as applicable etc., need to be completed.
Instructions are then sent to the supplier to despatch the machines
to the applicant. [ In case of imported machines, Letter of Credit is
opened ]
The Railway receipt or Goods Consignment note, received by
NSIC, is endorsed to the applicant for taking delivery of the
machines.
In case of imported machines the shipping documents are received
by NSIC, clearance from port is arranged by NSIC & finally
machines are despatched to the unit.
Note : For Details of Hire Purchase Schemes from NSIC, please refer Table.
Application Forms are Available at :
NSIC - Head Office

NSIC - Regional Offices & Branch Offices
SMALL INDUSTRIES SERVICES INSTITUTEs (SISIs)
DISTRICT INDUSTRIES CENTREs (DICs)
(DIC to recommend the case within 30 days to NSIC)

PROV. SSI UNITS: If applied directly to NSIC ( The application is
referred to DIC with request to recommend within 30 days, failing
which it would be presumed that DIC has no objection)
Permanent SSI UNITS: Directly to NSIC (Routing through DIC not
required)
13.5 MARKETING

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Tender Marketing
"Participation by NSIC in Bulk local/global tender on behalf of Small
Scale
Industries/Enterprises.
It is aimed to assist SSIs with ability to manufacture quality
products but which lack brand equity & credibility or have limited
financial capabilities."
Eligibility
Small Scale Industries/Enterprises (should be registered with Directorate of
Industries/ District Industries Centres)
Benefits
SSIs provided with all requisite financial support depending upon the units
individual requirements like purchase of raw material and financing of sale
bill.
Enhanced business volume helps SSIs achieve maximum capacity
utilization.
SSIs exempted from depositing earnest money
SSIs helped to participate in large & global tenders upto its capacity &
capability.
SSIs assisted technically for quality upgradation and new product
development in addition to testing facility.
Ensures fair margin to SSIs for their production
Publicity to small industries products
Production of quality products from the SSI sector
Procedure
To submit request on letter head to participate in tender alongwith fee
towards NSICs processing charges.
Photocopy of valid SSI Registration certificate.
Latest income tax assessment orders or clearance certificate of the
Proprietor/Partners/Directors in their individual capacity.
Copy of Memorandum & Articles of Association.
Specimen signatures of the authorised signatory of the applicant unit
attested by the banker of the unit.
If a Private/Public Limited Company, a copy of board resolution
authorising the signatory to sign for and on behalf of the company. In case
of partnership firm Power of Attorney in favour of signatory to deal with
NSIC.
Copies of tenders/orders executed, any other marketing arrangement,
sale bills etc.
Audited annual accounts for last 2 years with annual reports of applicant
unit & associate firms.

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Inspection of the Units production set up

An agreement is executed between NSIC & SSI on successful
procurement of Tender. Acceptance of NSIC terms & conditions by SSI
unit.
Service charges @ 1% of tender value is charged from the SSI once the
order is procured plus all actual expenses and damages.
Additional Service charges @ 0.25% for first 30 days and thereafter 0.08%
for every week subject to maximum of 1.5% of tender value is charged if
the SSI desires to avail financial assistance under NSICs Raw Material
Assistance (RMA) scheme or under Integrated Marketing Support
Programme (IMSP)/Bill Financing Scheme. Interest as applicable under
RMA/IMSP is charged on the value of financial assistance.
Processing Charges of Rs 200/- for Tender Value less than Rs 5.00 lacs or
0.1% of the Tender Value if Tender above Rs 5.00 lacs.
Process
Screening of tenders where SSIs can contribute effectively
Identification of SSIs capable of supplying short listed products
Participation by NSIC in tender on behalf of associate SSIs
Help to SSIs in procuring required raw material.
Effects supply of products manufactured by SSI.
Release of 80-85% payment to SSI on submission of Proof of dispatch of
Release of balance 15-20% payment to SSI on receipt of payment from
buyer.
Note : All terms & Conditions are as on 30.10.98 and subject to revision.
Contact Points: Head Office / Respective R.O.s / B.O.s
13.6 EXPORTS
PRODUCTS : NSIC - Recognised Export House : Why Export Through NSIC ?
Exporting through NSIC has following advantages: Absorption of marketing overheads & export promotion.
Raw material assistance programme.
Development of samples & procurement of orders.
Preshipment credit.
Postshipment credit.
Assistance for shipping.
Claiming Export incentives.
Export documentation.
Exhibition/Trade Fairs.
Buyer seller meets.

61
Cell : 09860240852

NSIC is engaged in export of products of small and medium enterprises/
industries. These enterprises are selected after careful study and assessment of
their capacity and capability. NSIC brings them to the fore in international market
through participation in trade fairs and exhibitions and helps them to export their
products.
The Indian small and medium enterprises constitute an important segment of the
Indian industrial sector. This sector is highly dynamic and has long been the
backbone of India's economy. The sector exhibits an amazingly range in terms of
products, sophisticated technology and size. Over 75,000 products confirming to
ISO 9000 / ASTM / DIN / BIS standards are being manufactured in the Indian
small and medium sector. NSIC has strong linkages with this supplier base.
The small industry/enterprise account for 40 percent of India's total exports. NSIC
is a recognised Export House and offers a complete package of export services
to importers to ensure :
*
Quality Products
*
Timely Delivery
*
Competitive Pricing
*
Export Worthy Packaging
As a result of its successive participation in various International exhibitions,
NSIC has carved a "niche" for itself in diversified range of products. An illustralive
list is given below :
*
Builder Hardware (Brass, Aluminum, Stainless Steel, Black Antique) *
*
Hand Tools
* Black Iron Mongery
*
Cast Garden Furniture
* Garden Tools
*
Readymade Garments
* Giftware & Novelities
*
Sanitary Fittings
* Handloom Products
*
Casting & Forgings
* Leather Products
*
Light Engineering Goods
* Auto Components
*
Sports goods & sports wear
* Carpets
*
Imitation Jewellery
* Agro Products
*
Medical equipments
* Electrical items
*
Consumer durables
NSIC has already been in the Export markets world wide and quality goods
ensuring the above mentioned services have been exported to : U
SA ,Europe ,
Latin America, UK , Australia, African Countries, Middle East
NSIC invites valuable enquiries from foreign buyers with specifications and other
details to enable it to quote competitive prices and provide them samples for
approval before placement of regular order.
__________________________
Report Ends
_____________________

62
Cell : 09860240852

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ABSOLUTE TECHNLOGIES

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Know-how - A Gateway to Prosperity

FABRICATION WORKSHP FOR

Ex. Sr. Manager HPCL ( Project Planning)

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FABRICATION WORKSHP FOR

Date : Sept. 14, 2009

Place : Absolute Technologies Research Center,

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Khamgaon 444 303 ( M.S.) India

FABRICATION WORKSHP FOR

2.0 TECHNICAL & SAFETY ASPECTS

3.0 WORKSHOP FACILITIES

4.0 COST ESTIMATE

5.0 FINANCIAL ANALYSIS

6.0 HOW TO SET UP AN ENTERPRISE

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Visakhapatnam Port Trust, HPCL, Hindustan Zinc Ltd.,

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land with N/A certification will be purchased outright for the

Fabrication and Welding involving most modern

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2.0 TECHNICAL & SAFETY ASPECTS

mostly ordered from a premier

public sector corporation ONGC. As the company is engaged in various

As such, welding of vessels, pipes and other structural

materials, being an important part of the workshop loading, the same

WELDING PROCESS : Welding is a fabrication or sculptural

process that joins materials, usually metals or thermoplastics, by

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Gas metal arc welding

dangerous, and precautions must be taken to avoid burns, electric

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Two metal electrodes in hydrogen

Bare metal arc

Consummable electrode, no flux or

Carbon arc welding

Carbon electrode, historical

Continuous consumable electrode, vertical

Continuous consumable electrode, vertical

Flux cored arc

Continuous consumable electrode filled

Gas metal arc

Continuous consumable electrode and

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Gas tungsten arc

Non-consumable electrode, slow, high

Plasma arc welding

Non-consumable electrode, constricted arc

Shielded metal arc

Consumable electrode covered in flux, steel Construction,