NIC Code: The Indian Industry Classification for Benchmarking Searches
The NIC (National Industrial Classification) defined: India’s 5-digit industry code system — its use in the benchmarking search, the search-string role and the NACE mapping.
Definition
The NIC — the National Industrial Classification (NIC-2008) — is India’s official industry classification: the 5-digit code for the economic activity (the section, the division, the group, the class, the sub-class), covering 1,297 5-digit codes. In transfer pricing the NIC code is the search’s industry axis: the code (or the code set) selects the candidate population from the database, and the search string is built on it. The search design guide has the full mechanics — and the NIC code finder is the lookup for the code itself.
| The level | The content |
|---|---|
| Section (1 digit) | The broad category (the manufacturing, the services, the trade) |
| Division (2 digits) | The industry group (the food products, the IT services, the wholesale trade) |
| Group (3 digits) | The activity cluster (the software development, the packaged foods) |
| Class (4 digits) | The activity (the software development services, the packaged food manufacturing) |
| Sub-class (5 digits) | The specific activity — the search’s resolution, where the database carries it |
The working use (the search design guide): the tested party’s activity is classified — the primary NIC code, and the secondary codes where the revenue mix is mixed (the 60/40 split across two codes is the search’s two axes) — and the candidate population is pulled on the code set. The code chooses who is in; the size and financial screens choose who stays; the qualitative screen chooses who is comparable (the quantitative and qualitative screens). The NACE mapping (the EU’s classification) is the bridge for the multinational databases that classify on NACE — the mapping is approximate at the 5-digit level, and the search that maps on the NACE equivalent states the mapping as a design decision.
Example
The tested party is a packaged-foods distributor (60% of the revenue trading the branded packaged foods, 40% the private-label distribution). The classification: the primary NIC code on the packaged-foods trading class, the secondary code on the general wholesale trade — the search runs on both codes (the candidate population is the union, the revenue mix recorded). The database returns 140 candidates on the code set; the size screen (the revenue band, the asset band) narrows to 48; the qualitative screen (the product mix, the distribution model, the brand ownership) selects the final 12. The code set — and the revenue-mix note — is in the search-design block of the file, as the industry axis of the pool.
See also
- Benchmark Search Design: NIC/NACE Codes, Size & Industry Filters
- Comparable Companies
- The NIC Code Finder (the tool)
FAQ
NIC or NACE for the Indian search? NIC, where the database classifies on NIC (the Indian filings’ classification) — the NACE mapping is the bridge for the databases that classify on NACE (the multinational feeds). The mapping is stated in the search design (the NIC code mapped to the NACE code, and the approximation acknowledged) — the pool’s industry axis is documented either way, and the jurisdiction comparison notes the classification difference across the databases.
How precise must the classification be? To the level the activity supports — the 5-digit sub-class where the activity is specific (the packaged-foods trading class), the 4-digit class where the activity spans sub-classes (the mixed-distribution entity on the class, with the revenue mix recorded). The over-specific code (the sub-class the entity’s mix does not actually sit in) starves the pool; the under-specific code (the section-level pull) dilutes it. The code set is the design decision the search-design block states — with the revenue mix where it is mixed.
Does the code choice show up in the documentation? Yes — the search-design block of the Local File states the industry classification (the code(s), the revenue mix, the NACE mapping where used) as the pool’s industry axis. The TPO’s examination of the pool starts at the code: the candidates that are in on the code but out on the activity are the comparability question the code-and-mix record answers — or does not.
Run the screens as a study, not a spreadsheet
Quartyl applies the method, PLI and screening steps above as a pipeline — and keeps a documented reason for every exclusion.
Related docs
Benchmark Search Design: NIC/NACE Codes, Size and Industry Filters
How to design a benchmark search that is neither too broad nor too narrow: the NIC-2008 code as the load-bearing filter, search strings, size proxies and the over/under-inclusion traps.
Read docComparable Companies: What Makes a Company Comparable
Comparable companies defined: the independent companies whose profit levels evidence the arm's length result, and the tests a candidate must survive to join the pool.
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