The Department of Industrial Policy & Promotion, established in 1995, was reconstituted in the year 2000 with the merger of the Department of Industrial Development .The Department of Industrial Policy and Promotion is responsible for the formulation and administration of overall Industrial Policy in India.

With the progressive liberalization of the Indian economy, initiated in July 1991, there has been a consistent expansion in the role and functions of this Department. From regulation and administration of the industrial sector, the role of the Department has been transformed into facilitation of technology and investment flows and promotion of industrial development in the liberalized environment

Formulation and implementation of industrial policy and strategies for industrial development in conformity with the developmental needs and national objectives in order to make the Indian industry internationally competitive;

Monitoring and stimulation of industrial growth, in general, and performance of industries specifically assigned to it, in particular, and guidance in the creation of an enabling environment, infrastructure, and technology transfer/collaborations on all industrial and technical matters.

Encouragement to foreign technology collaborations at enterprise level and formulation of policy parameters for the same for enhancing productivity with reference to international benchmarking and by commissioning competitive studies.

Promotion and facilitation of Foreign Direct Investment (FDI) in India and mitigating investor grievances through coordinated grievance resolution mechanism.

The department is assigned the function of Foreign Direct and Non-Resident (NRI) investments in the industries and service projects. The department is responsible for the formulation of FDI policy and facilitation and promotion of FDI into the country.

Department of Industrial Policy and Promotion is also responsible for Intellectual Property Rights relating to Patents, Designs, Trade Marks and Geographical Indication of Goods and oversees the initiative relating to their promotion and protection. These include the outlining of policy and its implementation through the Office of the Controller General of Patents, Designs and Trade Marks. It promotes awareness regarding protection of the Intellectual Property Rights inherent in industrial property in conjunction with the World Intellectual Property Organisation (WIPO) and apex industry associations apart from similar initiatives involving regional industry associations. It also provides inputs on various issues relating to the Agreement on Trade Related Aspects of Intellectual Properties (TRIPS) related to World Trade Organisation (WTO) in these fields.