MPDA (Market Promotion & Development Assistance)

The Market Promotion & Development Assistance scheme is operated by the Khadi & Village Industries Commission , under the Ministry of Micro, Small & Medium Enterprises , Government of India. It was introduced in 2008-09 in replacement of the earlier Rebate Scheme on Khadi products. The purpose of MPDA is to support the marketing, promotional and infrastructural development of khadi institutions, selling outlets and artisans, so as to increase sales of khadi products, enhance artisan incomes and modernise the marketing chain. The benefit to you as a khadi institution or artisan is that you can claim financial assistance tied to production or sales of khadi products helping with marketing costs, participation in fairs, upgrading outlets, and thereby improving your market reach and income.

Key Features
Financial Assistance
Eligibility Criteria
Documents Required
Application Process for the Scheme

Key Features

Assistance based on “prime cost” of production: Under MPDA, the assistance is calculated on the prime cost of khadi production (cost of raw material + conversion charges up to grey cloth + processing charges) rather than on retail sales margin or rebates. This means your institution can benefit increasingly from production efficiency and value-addition.
Applicable proportions for production, selling institutions and artisans: The scheme designates that the total assistance shall be divided among producing institutions, selling institutions and artisans in specified ratios (for example 40 % producing, 20 % selling institutions, 40 % artisans) under the modified version of the scheme. This ensures that not just the institution but artisans and selling outlets benefit.
Quarterly claims submission via KVIC portal: To release funds, khadi institutions must submit claim forms every quarter (based on the production/sales achieved) through the online system of KVIC, within stipulated timelines. Delays may lead to forfeiture of claim.
Marketing and promotional support: Under MPDA, your institution may use assistance for participating in domestic & international fairs, marketing tie-ups, e-commerce platforms, setting up “Khadi Plazas”, refurbishing sales outlets, offering discounts during festivals, and other promotional efforts to enhance demand for khadi products.
De-linking retail price from cost chart: Previously under the rebate scheme, the retail price of khadi was tightly linked to cost charts, which constrained market pricing. Under MPDA the retail price is de-linked so that institutions can respond to market demand and price accordingly, which is beneficial for value-added or designer khadi products.
Direct Benefit Transfer (DBT): Assistance under MPDA is routed via DBT into the bank accounts of the concerned institutions or artisans, ensuring transparency and enabling faster disbursement.

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Calculation on prime cost	Assistance allowed at a specified percentage of prime cost of khadi production	Example: If your khadi institution produces khadi cloth with prime cost of ₹ 10 lakhs in a quarter, and the assistance rate is say 30 %, then the eligible assistance would be ~₹ 3 lakhs.
Distribution among stakeholders	The assistance amount is distributed among producing institutions, selling institutions and artisans in defined ratios	Example: Of the ₹ 3 lakhs assistance, your institution (if producing) might retain ~₹ 1.2 lakhs, selling outlet might receive ~₹ 60,000 and artisans might share ~₹ 1.2 lakhs amongst themselves.
Support for marketing infra & promotional activities	Funds usable for showroom upgrades, e-commerce tie-ups, participation in fairs, discounts etc.	Example: Your khadi institution may use the assistance portion for setting up a khadi plaza, refurbishing the sales outlet, engaging design consultants for new khadi products, or attending an international exhibition.

Eligibility Criteria

Who Can Apply:

Khadi Institutions (KI) registered and approved by KVIC or State KVIBs.
Institutions engaged in spinning, weaving and processing of khadi.
KIs with verified production, sales and artisan engagement records.
Organizations following KVIC operational standards and reporting requirements.
Institutions needing support for production, marketing or raw material needs.

Who Cannot Apply:

Institutions not recognized or registered under KVIC/KVIB regulations.
Entities without khadi production as a primary activity.
Institutions with unresolved compliance issues or misuse of earlier funds.
Dormant or non-operational khadi units.
Organizations failing to maintain required production or artisan records.

Documents Required

Registration documents of the Khadi Institution
KVIC/KVIB approval certificates
Production and sales records
Artisan employment data
Audited financial statements
Details of raw material requirements and working capital needs
Projected production plan
Bank account details
Utilization certificates for previously received funds (if applicable)

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: Historical KVIC Application Process

Eligible KIs submitted financial assistance proposals to KVIC or State KVIB.
Institutions provided production, sales and artisan data.
Proposals were reviewed for operational performance and fund requirements.
KVIC sanctioned financial support based on MPDA norms.
Funds were released in phases based on utilization reports and inspections.
Institutions submitted periodic reporting and auditor-certified expenditure statements.

Power Combos with The Scheme