Assistance for Interest Subsidy to Micro, Small, and Medium Enterprises (MSMEs)

Key Features

• Interest subsidy on term loans: For example in manufacturing, units located in a Category 1 taluka get 7 % interest subsidy on the sanctioned term loan, up to ₹35 lakh per annum for 7 years. 
• Eligibility for new units/expansion: New enterprises that commence commercial production during the operative period are eligible; existing ones must expand or diversify as per policy (for example invest minimum prescribed % of existing gross fixed capital). 
• Additional incentives for special categories: Women entrepreneurs, youth under 35, SC/ST, differently‐abled get extra 1 % interest subsidy in many cases. 
• Asset/loan conditions: Only new plant & machinery  qualify; loans for land & building are not eligible. 
• Time-limit/application window: The application must be filed within one year from the date of first disbursement of loan or commencement of service/production, whichever is later.
• Location‐based variation: The scheme classifies talukas into categories; for Category 1  the highest subsidy rate and quantum apply; for Category 3 & municipal corporation areas the lowest.

Financial Assistance

Eligibility Criteria

Who can apply:

• New MSME units in manufacturing sector  which commence commercial production/ rendering services during the operative period of the policy (07 August 2020 – 06 August 2025).
• Existing MSME units that are carrying out expansion / diversification / backward or forward integration, subject to investment thresholds (e.g., at least 50% increase in gross fixed capital investment, of which minimum 60% is plant & machinery) where applicable.
• The term loan must be sanctioned by a recognised bank/financial institution .
• The term loan should be for eligible assets: plant & machinery  or for equipment/furniture -  land & building are excluded.
• The application for subsidy must be filed within one year of the first disbursement of term loan or before commencement of commercial production/ services .

Who Cannot Apply:

• Units whose term loan is sanctioned after one year from the date of commencement of commercial production/rendering services.
• Loans from NBFCs -  ineligible for interest subsidy.
• Second-hand machinery cases for service units  per policy guidelines.
• Units that cease production or shut down the eligible activity within the stipulated tenure may have subsidy benefits withdrawn or recovered.

Documents Required

• Udyam / MSME registration acknowledgement.
• Term loan sanction letter and first disbursement proof from bank or financial institution.
• Plant & machinery/equipment/furniture invoice and installation or disbursement proof.
• Declaration of date of commencement of commercial production or services  and choice of eligibility date.
• Proof of location  taluka category classification .
• Shop & Establishment registration  if applicable.
• GST registration  or service tax registration .
• Undertaking to continue production/services for specified number of years  else subsidy may be recovered.
• Self-declaration on not availing overlapping subsidy (state + central) exceeding interest paid.

Application Process for the Scheme

Option 1: Apply with Bullit 

Click here to start with guided support. Our team verifies eligibility, compiles documents, and handles application & follow-ups on your behalf. You can monitor progress while focusing on operations. 
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Option 2: Government Online Portal

1. Visit the official portal of the MSME & Co-operation Department or the Industries & Mines Department of Gujarat.
2. Register your enterprise.
3. Fill the application for “Assistance for Interest Subsidy to MSMEs” specifying details of term loan, category of area , manufacturing/service activity, date of first disbursement or date of commencement of production/services.
4. Upload necessary documents .
5. Submit the application within one year of first disbursement or before production starts.
6. Upon verification of documents and eligibility, the subsidy is sanctioned and disbursed .

Option 3: District Industries Centre  / MSME Facilitation Desk

1. Visit your local District Industries Centre or MSME facilitation desk in your district.
2. Seek assistance in determining your taluka category , the eligible term loan asset classification, and obtain guidance on uploading documentation, verification and follow-up.
3. Submit application through the local office , monitor status and coordinate with bank and state authority for realisation of subsidy.