IFLADP-Mega Leather, Footwear and Accessories Cluster Development (MLFACD)
The Mega Leather, Footwear & Accessories Cluster Development sub-scheme is administered by the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce & Industry, Government of India. It was launched as part of the IFLDP for the period 2021-22 to 2025-26 to support world-class integrated infrastructure clusters in the leather, footwear and accessories sector. The purpose of the sub-scheme is to create large-scale clusters (“mega clusters”) with modern infrastructure, integrated production chains (leather → footwear → accessories) to cater both to domestic market demand and exports, and thereby benefit MSMEs/start‐ups by providing plug-and-play production sheds, common facility centres, R&D/testing support, skill training etc. The benefit to your enterprise is access to a cluster ecosystem: reduced infrastructure burden, access to shared services/infrastructure, improved connectivity & export readiness, cost sharing of large infrastructure, and thereby improved competitiveness.
Key Features
- Large-scale cluster infrastructure with integrated value-chain: The MLFACD is aimed not just at single factories but at entire production ecosystems. For you as an MSME/Startup, being located in such a cluster means you benefit from proximity to raw material, components, footwear producers, finishing units etc — reducing logistics and improving supply-chain integration.
- Multiple infrastructure components: The scheme recognises that infrastructure is multi-faceted: you will need roads, power, water, effluent treatment, ready factory sheds, R&D/testing, training facilities etc. Being in a cluster means you may gain access to these shared facilities instead of building them fully yourself.
- SPV implementation & sustainable user-charges model: Instead of the government fully owning infrastructure, an SPV (which may include industry players, state govt, banks) will implement and operate the cluster. The SPV will collect user‐charges (rent for sheds, service charges) to maintain operations. For you, this means you pay for usage rather than bear full infrastructure investment.
- Generous subsidy/assistance pattern: Depending on region (general vs North East/hilly) and land size of cluster, the government will share a substantial portion of project cost — up to 50% (or 70% in special regions). The maximum assistance varies by size of land (up to ~₹ 125 crore in some cases). This helps reduce upfront infrastructure cost.
- Time-bound implementation and monitoring: The sub-scheme requires structured approvals, milestone-linked releases (25% of assistance after final approval, then 30%, 30% and last 15%) and robust monitoring. As an MSME/Startup you must choose to locate in a cluster that meets these criteria and ensure compliance with timeline.
Financial Assistance
Eligibility Criteria
Who can apply:
- A proposal must be for developing a “Mega Leather, Footwear & Accessories Cluster” in states/UTs with leather/footwear concentration or growth potential.
- The implementing agency must be a Special Purpose Vehicle (SPV) that is a legal entity (company, society, etc) registered for this purpose.
- The SPV must bring in land (the land cost is not subsidised). The land should ideally be in possession of SPV (or state govt land).
- DPR must be based on a diagnostic study of demand, backward/forward linkages, infrastructure requirement.
- The application must include details of SPV structure, promoter contributions, means of finance etc
Who cannot apply:
- Cost of land is excluded from eligible project cost for assistance calculation
- Projects not having requisite land ownership/possession or without SPV/legal structure may be ineligible.
- Projects that don’t provide the mandated infrastructure components or don’t meet timeline may face ineligibility or penalty (interest on delayed funds)
Documents Required
- Registration certificate of SPV (Company, Society, etc)
- Land title/possession documents of cluster land (or state-allotted land)
- Preliminary proposal / DPR including diagnostic study
- Shareholders/Promoter agreements of SPV
- Means of finance statement (promoter contribution, debt, subsidy)
- Corporate/business profile of SPV with board composition showing central & state government representation (as per guidelines)
- Infrastructure plan: layout, services (roads, power, water, effluent), ready factory shed plan
- List of units proposed to locate in cluster (leather/footwear/accessories) with employment estimates
- Utilisation certificate format for fund release and audited accounts of SPV (later)
- Resolution of State Government supporting the cluster (clearances, utilities)
Application Process for the Scheme
Option 1: Apply with Bullit (Recommended)
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.
Recommended for: Lean teams. Designed to save you time and effort. Access expert help from start to finish.
Option 2: Apply Through the DPIIT (MoCI) / CLRI / PIU Process
- Prepare a Detailed Project Report (DPR) aligned with IFLADP MLFAC guidelines.
- Form an SPV (if applicable) and complete legal registration.
- Obtain land-related approvals and supporting documents.
- Submit the proposal to DPIIT through the Programme Implementation Unit (PIU/CLRI).
- Participate in appraisal, technical evaluation, and site assessments.
- On approval, comply with fund-release conditions and implement the cluster.
Option 3: Apply Through the State Industry Department
- Approach the State Industrial Development Corporation or State Leather Mission.
- Submit cluster proposal with land details, SPV structure, and DPR.
- State Government forwards the proposal to DPIIT for evaluation.
- After approval, state agencies coordinate implementation along with the PIU.
Power Combo with the scheme
