Scheme for Setting Up of Plastic Park

The Scheme for Setting Up of Plastic Parks is implemented by the Department of Chemicals & Petrochemicals . It was launched to support the creation of need-based Plastic Parks - industrial zones dedicated to the downstream plastics processing industry providing state-of-the-art infrastructure and common facilities via a cluster-development approach. The purpose of the scheme is to increase investment, production, value-addition, polymer absorption capacity, and exports in the plastic sector, while supporting environmentally sustainable growth and improving competitiveness of micro, small and medium enterprises in this domain. The benefit to you as an MSME is that you may be located in or set up your unit in a designated Plastic Park which benefits from infrastructure support, common facility centres, and state/central support, thereby reducing your setup cost and gaining cluster advantages.

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

Key Features

Dedicated cluster-based Plastic Parks with common infrastructure & services: These parks bring together multiple plastic processing units, allied industries, recycling, tooling, testing and common facility centres in one industrial zone, enabling economies of scale and shared resources.
Formal Special Purpose Vehicle model with public-private participation: Each Plastic Park is implemented by an SPV formed by the State Government/agency and user enterprises, responsible for development, maintenance and allocation of plots/units.
Grant-in-aid from Central Government – up to 50% of project cost (ceiling ₹ 40 crore per project): The central support is provided up to half of the defined project cost, subject to a cap.
State Government and user industry contribution & loan funding for remaining cost: The rest of the project cost is met by the SPV via state government / industry equity and loans from financial institutions.
Focus on downstream plastic processing and value-added manufacturing, along with plastic waste management & recycling: Preference is given to medium to high end plastic manufacturing, recycling, testing, prototyping, tooling, and sustainable practices.
Implementation timeframe and performance milestones: The SPV must develop the park within specified timeframe and meet milestones to qualify for further instalments
Eligible “common facility” components – infrastructure, buildings, equipment, soft interventions: The scheme funds common infrastructure , buildings , equipment and soft components .

Financial Assistance

Component	Assistance Provided	Detailed Explanation & Example
Central Grant-in-aid	Up to 50 % of the project cost, subject to a ceiling of ₹ 40 crore per project	For instance, if the total project cost is ₹ 70 crore, the central grant could be up to ₹ 35 crore (50%), but capped at ₹ 40 crore; since ₹ 35 crore < ₹ 40 crore, full 50% grant is applicable.
State / Industry / Loan	Remaining ~50% of the project cost to be met through state government equity, industry/user contribution and loans	Using the above example (₹ 70 crore cost), after ₹ 35 crore grant, the SPV needs to arrange the remaining ~₹ 35 crore through state government/industry equity + bank loans. The state govt equity in SPV must be at least 26% of cash equity .
Common Facility Allocation	At least 25 % of the grant-in-aid must be earmarked for common enabling facilities such as testing, prototyping, recycling, training, warehousing, etc.	For example, if the central grant is ₹ 30 crore, at least ₹ 7.5 crore (25%) must be used for such common facilities dedicated to plastic processing.
Soft Interventions	Scheme covers soft initiatives up to 75% of cost of those interventions, not exceeding ₹ 50 lakh per project	For example, if soft interventions cost ₹ 40 lakh, the scheme may fund upto ₹ 30 lakh (75%); but such funding comes from within the grant allocation.
Release of Grant Installments	Grant released in instalments: 20% mobilization advance; 35% second; 35% third; 10% final installment after certain performance triggers	Example: On final approval, SPV gets 20% of grant advance, then 2nd installment when 60% of 1st utilised and certain works done; final when 50% units in park operational.

Eligibility Criteria

Who can apply:

The project must be proposed by a Special Purpose Vehicle formed by the State Government or its agency in association with plastic industry/user enterprises.
The proposed Plastic Park location must be approved; land must be in possession of the SPV and registered/ transferred in SPV’s name .
Proposed project must demonstrate infrastructure development , cluster approach, value-addition in plastic sector, emphasis on advanced plastic processing downstream and/or recycling.
Project cost must be quantified, DPR submitted, financial closure achieved, and PSV must meet promoter equity/loan obligations.

Who can apply:

Land cost is excluded from project cost for grant calculation.
The grant is not for the production units of member industries; it is for common infrastructure/facility of the Park.
Projects not affiliated with the plastics processing cluster, or without credible product mix/investment plan, may not be approved.
If the SPV fails to meet milestones or misuse funds, government may recall grant along with penal interest.

Documents Required

Preliminary proposal document covering location, cost estimate, product mix, infrastructure per acre etc.
Detailed Project Report for the Plastic Park including project cost, means of finance, land, SPV structure, equity/loan, infrastructure plan, implementation timeline.
SPV registration certificate .
Land acquisition/possession documents .
Equity contribution proof .
Bank sanction letter .
Cost estimates, drawings, infrastructure plan, common facility scheme.
Documents for soft interventions if included.
Statutory clearances/approvals .
Audited accounts/UCs at later stages.

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.
Recommended for: SPVs planning to establish a plastic park and seeking structured assistance.

Option 2: Official Route

State Government or its implementing agency submits a preliminary proposal to the Department of Chemicals & Petrochemicals. The proposal includes park location, cost estimate, SPV background, product mix, investment plan.
The Scheme Steering Committee reviews and if meeting criteria, grants in-principle approval.
On in-principle approval, SPV prepares a Detailed Project Report including detailed project cost, infrastructure plan, user units, timeline, product mix.
Submit final proposal with DPR to Department for final approval and grant sanction. Once sanctioned, the SPV undertakes infrastructure development, plots allocation, common facilities establishment.
During the project, milestones must be met and funds released as per scheme guidelines and time-limits. Grant is disbursed by the Department to the SPV.

Option 3: Coordination with State / Industrial Development Corporation
Since the scheme requires state participation, applicant SPV must coordinate with State Government / State Industrial Development Corporation for land, infrastructure linkages, policy incentives. It is advisable to engage early with state nodal agency, secure land allocation, policy support, approvals.