Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance for Interest Subsidy (Service Sector)
Industries and Mines Department, Government of Gujarat · Central government
Interest subsidy on term loans for new service-sector MSMEs in Gujarat, plus 1% extra for registered startups.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- ₹1,25,00,000 – ₹2,45,00,000
- Instrument
- Subsidy
- Deadline
- Rolling
- Disbursement
- Reimbursed after spend
About this scheme
The Industries and Mines Department, Gujarat, runs the "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" to support the state's MSME sector, which contributes to employment, Gross Domestic Product (GDP), and exports. The scheme operates from August 7th, 2020, to August 6th, 2025, and is intended to strengthen entrepreneurs and improve the international competitiveness of MSMEs in Gujarat.
Under this umbrella, the "Assistance for Interest Subsidy (Service Sector)" component is aimed at new MSMEs in the service industry. It provides a financial incentive through subsidies on the interest portion of term loans. This support applies to capital expenditure on new machinery, essential equipment, and necessary furniture or fixtures, assisting businesses in setting up or expanding operations. Land and building costs are not covered. The assistance is structured to promote investment and growth in the service sector, with the subsidy amount varying according to the enterprise's location within Gujarat.
Who can apply
- Eligible business forms
- Private limited company, Limited liability partnership, One person company, Partnership firm, Sole proprietorship
- Udyam registration
- Not specified
- MSME registration
- Required
- DPIIT startup recognition
- Not specified
- GST registration
- Not specified
- Where the business may be based
- Gujarat
- Must be a new Micro, Small, or Medium Enterprise. - Must operate within the eligible service sector categories, as per Annexure A & B guidelines. - Term loan must be sanctioned by a recognised Bank or Financial Institution. - Application must be submitted within one year of loan disbursement or before commercial production commences. - Enterprise must remain operational for at least 7 years post-subsidy approval. - Compliance with all relevant pollution control measures is mandatory. - Only one type of investment (Forward Integration, Backward Integration, Diversification, or Expansion) is eligible for subsidy per enterprise.
How to apply
The application for the Interest Subsidy scheme is submitted entirely online through Gujarat’s Investor Facilitation Portal (IFP).
**Registration Process:** - **Step-1:** Go to the [Investor Facilitation Portal (IFP)](https://ifp.gujarat.gov.in/DIGIGOV/) and select "New Investor Registration" to open the registration form. - **Step-2:** Fill in all mandatory fields on the registration form and press "Submit." - **Step-3:** Confirm your email address by clicking the verification link sent to the email ID you provided. - **Step-4:** Once your email is verified, registration is complete.
**Post-Registration Application Process:** - **Step-1:** Return to the [Investor Facilitation Portal (IFP)](https://ifp.gujarat.gov.in/DIGIGOV/) and choose "Login." - **Step-2:** Enter the email address and password used during registration. - **Step-3:** Press the "Login" button to enter your applicant account. - **Step-4:** Complete the application by entering all required business information and uploading the necessary documents for the interest subsidy.
If you need help during the application, a helpdesk is accessible through the contact link provided on the portal.
How applications are assessed
Applications are evaluated via the Investor Facilitation Portal, with eligibility determined by the documents provided and conformity to the scheme's provisions. The review confirms that the enterprise qualifies as a new MSME, functions within an approved service sector, and holds a valid term loan from a recognised institution. Each submission is checked for completeness and compliance with the scheme's requirements, including submission within one year of loan disbursement or prior to the start of commercial production. Subsidy approval is issued only after all specified conditions are verified successfully.
Frequently asked questions
What is the primary benefit of this scheme?
The scheme provides an interest subsidy on term loans taken for new machinery, equipment, and furniture or fixtures by new service-sector MSMEs in Gujarat.
Which types of investments are covered by the subsidy?
The subsidy applies to investments in new machinery, equipment, and furniture/fixtures, but does not cover land or buildings.
Is there any additional benefit for startups?
Yes, startups registered under Udyam/MSME are eligible for an extra 1% interest subvention, which is added to the standard rates for their Taluka category.
How is the subsidy amount determined?
The interest subsidy ranges from 6% to 8% on term loans, depending on the Taluka category of the enterprise's location. The maximum annual cap is between ₹25 lakh and ₹35 lakh, with the subsidy available for 5 to 7 years.
When must I apply for the interest subsidy?
Applications for the interest subsidy must be submitted within one year of the term loan disbursement date, or before commercial production begins, whichever comes first.
What happens if my enterprise ceases operations after receiving the subsidy?
The enterprise must stay operational for a minimum of 7 years after the subsidy is approved. If this condition is not met, the subsidy may be clawed back or other penalties imposed.
Sectors
- Msme
- Service Sector
- Gujarat
- Interest Subsidy
Details last verified on 3 August 2026. Source: the issuer's published information.