The entrepreneur who intends to start manufacturing for producing 5 items reserved in Schedule-II compulsory licensable items has to file Industrial License in prescribed format to Department of Industrial Policy & Promotion, Secretariat of Industrial Approvals (SIA), Government of India, New Delhi along with the Demand Draft of ₹ 2500/- personally or by post.

There are 5 items reserved in Schedule-II for compulsory licensing:

1. Distillation and brewing of alcoholic drinks.(Licensing ceased by DIPP in compliance with Supreme Court Order of 29.1.1997 in Bihar Distillery case which ruled that industries engaged in manufacture of potable alcohol would be under the jurisdiction of the States)
2. Cigars and cigarettes of tobacco and manufactured tobacco substitutes
3. Electronic Aerospace and defense equipment: All types
4. Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches
5. Specified Hazardous chemicals i.e. (i) Hydrocyanic acid and its derivatives, (ii) Phosgene and its derivatives and (iii) Isocyanates & diisocyanates of hydrocarbon, not elsewhere specified (example Methyl isocyanate)

The unit who intends to start manufacturing any item other than above with proposed investment in plant & machinery more than ₹ 10 Crores or Service industry with investment in plant & machinery (Equipment ) more than ₹ 5 Crores the unit has to file Industrial Entrepreneurs Memorandum (IEM) in prescribed format in Six Copies to Government of India, Department of Industrial Policy & Promotion, Secretariat of Industrial Approvals (SIA), Government of India, New Delhi along with the Demand Draft of ₹ 1000/- personally or by post.

The unit can apply IEM for following categories:

• Establishment of a new undertaking (NU)
• Effective Substantial Expansion (SE)
• Manufacture of New Article (NA)
• Change of Location (CL)
• Change of Ownership/name company (CO/CN)
• Graduation to Medium scale (GM)
• Others (OT)

The IL and IEM Forms along with the details are available on GOI Website on following link - http://dipp.nic.in/English/Investor/Forms/Forms.aspx