Top Government Schemes and Subsidies for MSMEs in India (2025 Guide)
India is home to over 6.3 crore MSMEs, contributing nearly 30% to the country’s GDP. To boost this vital sector, the Government of India offers several schemes, incentives, and subsidies to support micro, small, and medium enterprises (MSMEs).
Whether you’re a startup, a manufacturer, or a local service provider — there’s government support waiting for you.
In this detailed guide, we’ll cover the top MSME schemes, how to apply, eligibility criteria, and how these benefits can help you grow your business.
📌 Why Government Schemes for MSMEs Matter
- ✅ Reduce cost of capital
- ✅ Improve access to credit
- ✅ Boost exports and production
- ✅ Enable technology upgrades
- ✅ Provide marketing and training support
These schemes aim to empower local businesses so they can become globally competitive.
🔝 Top 15 Government Schemes and Subsidies for MSMEs in India
1. Udyam Registration (Previously Udyog Aadhaar)
What it is:
A free, paperless online registration for all MSMEs.
Benefits:
- Get recognized as an MSME
- Avail government subsidies and schemes
- Easy access to loans and tenders
Where to apply:
👉 https://udyamregistration.gov.in
MSME registration India, Udyam registration, free MSME certification
2. Prime Minister’s Employment Generation Programme (PMEGP)
What it is:
A flagship scheme by KVIC to generate self-employment through micro enterprises.
Eligibility:
Any individual above 18 years with at least Class 8 education
Subsidy:
- 15% to 35% subsidy on project cost (depending on region and category)
Loan limit:
Up to ₹25 lakh (manufacturing) and ₹10 lakh (services)
Where to apply:
👉 https://www.kviconline.gov.in
PMEGP subsidy, government loan scheme for MSMEs, KVIC loan
3. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
What it is:
A collateral-free loan scheme by SIDBI and the Ministry of MSME.
Loan amount:
Up to ₹5 crore without collateral
Benefit:
The government guarantees up to 85% of the loan amount in case of default.
Where to apply:
Through banks or NBFCs
CGTMSE loan, MSME loan without collateral, SIDBI schemes
4. MUDRA Loan (Micro Units Development and Refinance Agency)
What it is:
Part of the Pradhan Mantri Mudra Yojana (PMMY), it provides loans to small businesses.
Types of Loans:
- Shishu (up to ₹50,000)
- Kishor (₹50,000–₹5 lakh)
- Tarun (₹5 lakh–₹10 lakh)
Eligible for:
Small manufacturers, traders, artisans, street vendors, etc.
Where to apply:
All major banks and micro-finance institutions
MUDRA loan for small business, PMMY loan, Shishu loan apply online
5. Technology Upgradation Fund Scheme (TUFS)
For whom:
Primarily textile MSMEs
What it offers:
Capital subsidy for upgrading machinery and technology.
Benefit:
Up to 25% subsidy on plant and machinery purchase
TUFS scheme for textile MSMEs, textile subsidy scheme India
6. Stand Up India Scheme
What it is:
Promotes entrepreneurship among SC/ST and women entrepreneurs.
Loan amount:
₹10 lakh to ₹1 crore for setting up new businesses
Eligibility:
SC/ST or women entrepreneurs above 18 years starting a new business
Where to apply:
👉 https://www.standupmitra.in
Stand Up India loan, women entrepreneur loan India
7. Zero Defect Zero Effect (ZED) Certification
What it is:
A quality certification scheme that encourages MSMEs to improve product quality.
Benefits:
- Subsidy on certification fees
- Branding and credibility improvement
- Preference in public procurement
Where to apply:
👉 https://zed.msme.gov.in
ZED certification, MSME quality certification scheme
8. MSME Sustainable (ZED) Scheme – 2.0 (Launched in 2022)
What’s new:
- Three certification levels: Bronze, Silver, Gold
- Focus on sustainability, productivity, and energy efficiency
Incentives:
- Financial support of up to ₹2 lakh per unit
- Training, mentoring, and assessment support
9. Interest Subvention Scheme for Incremental Credit to MSMEs
What it is:
Provides a 2% interest subsidy on new or incremental loans up to ₹1 crore.
Who qualifies:
MSMEs with valid GST and Udyam registration
MSME interest subsidy, low-interest loan scheme for MSMEs
10. Procurement and Marketing Support (PMS) Scheme
What it is:
Helps MSMEs market their products via trade fairs and exhibitions.
What it offers:
- 100% reimbursement of stall charges for SC/ST/women MSMEs
- Up to ₹1.5 lakh for other MSMEs
PMS scheme MSME, government marketing support MSMEs
11. Raw Material Assistance Scheme by NSIC
What it is:
Supports MSMEs by financing the purchase of raw materials.
Who benefits:
Manufacturers who need working capital for raw material purchase
NSIC raw material assistance, working capital for MSMEs
12. Credit Linked Capital Subsidy Scheme (CLCSS)
What it is:
Provides 15% capital subsidy on technology upgrades in manufacturing.
Maximum subsidy:
₹15 lakh
Where to apply:
Through banks or SIDBI
CLCSS scheme, technology upgrade subsidy for MSMEs
13. Coir Udyami Yojana
Targeted for:
Coir industry entrepreneurs
Benefits:
- Up to ₹10 lakh loan
- 40% government subsidy on project cost
Coir Udyami Yojana India, MSME scheme for coir units
14. Tool Rooms and Technology Development Centres
What they offer:
- Skill training
- Industrial designing
- CAD/CAM services
- Tool production
Useful for:
Manufacturing MSMEs and engineering startups
Tool room scheme India, MSME skill development programs
15. Export Promotion Capital Goods (EPCG) Scheme
For exporters:
Allows duty-free import of capital goods for production
Who should apply:
MSMEs involved in export-oriented manufacturing
EPCG scheme for exporters, MSME export scheme India
🧾 How to Avail These Schemes
Most schemes require you to have:
- A valid Udyam registration
- GST registration (if applicable)
- PAN and Aadhaar linked to the business
- A proper business plan or project report
Application Channels:
- Bank branches
- Online portals (MCA, MSME, SIDBI, NSIC)
- District Industries Centres (DICs)
📊 Pro Tips for MSMEs to Get Approved Quickly
- Keep all documents updated and ready
- Register your business under Udyam Portal
- Maintain clean financial records and GST filings
- Work with an accountant or legal advisor for complex applications
- Apply early in the financial year for faster processing
✅ Benefits of Using These Schemes
- Reduced interest rates and EMIs
- Access to national and international markets
- Funds for innovation and technology
- Enhanced production capacity
- Legal compliance and recognition
📝 Conclusion: Make the Most of Government Support
India’s MSME sector is full of potential. The government recognizes this and offers a wide range of support to help small businesses grow.
If you are an entrepreneur, local shop owner, startup founder, or manufacturer, don’t miss out. Use these schemes to reduce financial burdens, improve your operations, and reach new markets.
💬 Need Help with Applying?
At India Udyam, we help MSMEs understand, apply, and benefit from these government schemes. Contact us to:
- Register your MSME
- Draft project reports
- Apply for MSME loans and subsidies
- Get marketing support for your business listing
