Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance of Capital Investment Subsidy (Manufacturing Sector)
Capital investment subsidy 10–25% of term loan up to ₹35 lakh · Gujarat manufacturing MSEs
Gujarat manufacturing MSMEs can get a one-time capital investment subsidy on their term loans, with the subsidy percentage based on the location of the enterprise. Businesses in less-developed Category I talukas get up to 25% of their term loan as a capital subsidy, while those in urban/Municipal Corporation areas get 10%. Apply through the Investor Facilitation Portal (ifp.gujarat.gov.in) within one year of loan disbursement or before commercial production starts.
About This Scheme
Gujarat manufacturing MSMEs can get a one-time capital investment subsidy on their term loans, with the subsidy percentage based on the location of the enterprise. Businesses in less-developed Category I talukas get up to 25% of their term loan as a capital subsidy, while those in urban/Municipal Corporation areas get 10%. Apply through the Investor Facilitation Portal (ifp.gujarat.gov.in) within one year of loan disbursement or before commercial production starts.
Full official description
The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" is an umbrella scheme launched by the Industries and Mines Department, Gujarat. It aims to empower the state's dynamic MSME sector, which significantly contributes to employment, GDP, and exports. Effective from August 7th, 2020 to August 6th, 2025, this initiative supports entrepreneurs and strengthens MSMEs, making them globally competitive.
The component "Assistance of Capital Investment Subsidy (Manufacturing Sector)" provides a capital investment subsidy to support MSMEs in the manufacturing sector.
Benefits
- Category I talukas: 25% of term loan as subsidy, up to ₹35 lakh; extra ₹10 lakh if total investment exceeds ₹10 crore
- Category II talukas: 20% of term loan as subsidy, up to ₹30 lakh; extra ₹7.5 lakh if total investment exceeds ₹10 crore
- Category III & Municipal Corporation areas: 10% of term loan as subsidy, up to ₹15 lakh; extra ₹5 lakh if total investment exceeds ₹10 crore
💡 Why Startups Should Care
This is a straightforward capital cost reduction — up to 25% of your term loan amount back as non-repayable subsidy in Category 1 talukas. Combined with the interest subsidy scheme, this stack significantly lowers the true cost of setting up manufacturing in Gujarat.
Who Can Apply (Eligibility)
- Must be a Micro, Small, or Medium enterprise in the manufacturing sector
- Term loan must be from a recognized bank or financial institution (NBFCs are not eligible)
- Apply within one year of loan disbursement or before commercial production starts, whichever is earlier
- Must remain operational for at least 7 years after subsidy approval
- Must comply with pollution control norms
- Only one investment type (expansion, diversification, backward/forward integration) is eligible at a time
Exclusions
- Loans sanctioned by Non-Banking Financial Institutes are not eligible
How to Apply
- Visit ifp.gujarat.gov.in/DIGIGOV/ and register as a new investor.
- Log in and select the Capital Investment Subsidy component.
- Fill in enterprise and term loan details.
- Upload the signed application form, Udyog Aadhaar/Udyam certificate, and loan sanction letter.
- Submit and note your Reference Number for tracking.
Frequently Asked Questions
What is the "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)"?
The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" aims to position Gujarat as a global business destination by promoting sustainable manufacturing, inclusive development, and balanced regional growth.
What is the duration of the scheme?
The scheme is effective from August 7, 2020, and will remain in operation until August 6, 2025.
What is the objective of the component "Assistance of Capital Investment Subsidy"?
The component "Assistance of Capital Investment Subsidy"is a financial support scheme designed to encourage enterprises in the manufacturing sector to invest in capital assets by providing subsidies on term loans.
Who is eligible to apply for the subsidy?
Any enterprise in the manufacturing sector that has availed a term loan from a recognized bank or financial institution and meets the required conditions is eligible to apply for the subsidy.
Can an enterprise apply for the subsidy after commencing production?
Yes, an enterprise can apply after starting production, but the application must be submitted within one year of loan disbursement or before the commencement of commercial production, whichever is later.
What happens if an enterprise does not remain operational for 7 years?
If an enterprise fails to remain in production for at least 7 years, the disbursed capital investment subsidy will be recovered as arrears of land revenue.
Can an enterprise avail subsidies from both State and Central Governments?
Yes, an enterprise can avail subsidies from both the State and Central Governments, but the total subsidy amount cannot exceed the total loan disbursed by the bank or financial institution.
Are there any employment conditions that an enterprise must fulfill?
Yes, an enterprise must ensure that at least 85% of its total employees and 60% of its managerial and supervisory staff are local residents.
Can an enterprise apply if the loan is taken from a Non-Banking Financial Institution (NBFC)?
No, only loans sanctioned and disbursed by recognized banks and financial institutions under RBI guidelines are eligible for the subsidy.
Can an existing enterprise apply for the subsidy?
Yes, an existing enterprise can apply if it is undertaking Forward Integration, Backward Integration, or Diversification, provided that its additional investment is more than 25% of the Gross Fixed Capital Investment (GFCI), with at least 60% of the investment in plant and machinery.
What types of investments qualify for the subsidy?
The subsidy covers investments in new buildings, new plant machinery/equipment, and second-hand imported machinery.
What environmental regulations must an enterprise comply with?
An enterprise must comply with pollution control measures as prescribed by the Gujarat Pollution Control Board (GPCB) or any other competent authority.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Printed application form with declaration (signed by authorised person with stamp)
- Copy of acknowledgment of Udyog Aadhaar / Udyam registration
- Term loan sanction letter
- CA certificate for fixed capital investment