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
Gujarat offers interest subsidies on term loans to new service-sector MSMEs, plus an extra 1% 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). Gujarat's MSME sector is a major contributor to employment, Gross Domestic Product (GDP) and exports. The scheme was launched on August 7th, 2020, and remains in force until August 6th, 2025. Its purpose is to support entrepreneurs and improve the global competitiveness of MSMEs in the state.
Within this scheme, the Assistance for Interest Subsidy (Service Sector) component is meant for new MSMEs in the service industry. It gives a subsidy on the interest component of term loans. The support applies to capital expenditures — new machinery, essential equipment, and necessary furniture/fixtures. Land and building costs are not covered. Financial relief under this component is tailored to the geographical location of the enterprise 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
- The applicant must be a new Micro, Small, or Medium Enterprise. - The enterprise's line of activity must fall under the eligible service sector categories listed in Annexure A & B guidelines. - The term loan must carry sanction from a recognised Bank or Financial Institution. - The application must reach the authority within one year of loan disbursement, or before commercial production begins, whichever applies. - The enterprise must stay operational for a minimum of 7 years from the date subsidy approval is granted. - All applicable pollution control measures must be complied with. - A single enterprise may claim subsidy for only one investment type — Forward Integration, Backward Integration, Diversification, or Expansion.
How to apply
Applications for the Interest Subsidy scheme are submitted wholly online via the Gujarat Investor Facilitation Portal (IFP).
**Registration:** - **Step 1:** Open 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 every mandatory field on the registration form, then select "Submit." - **Step 3:** Open the link sent to your registered email ID to confirm your email address. - **Step 4:** Once the email address is verified, your registration stands complete.
**Applying after Registration:** - **Step 1:** Go back to the [Investor Facilitation Portal (IFP)](https://ifp.gujarat.gov.in/DIGIGOV/) and select "Login." - **Step 2:** Provide the email address and password you registered with. - **Step 3:** Select the "Login" button to reach your applicant account. - **Step 4:** Enter all the required business details and upload the mandatory documents to complete your interest subsidy application.
Should you need help at any point while applying, a helpdesk can be reached through the contact link given on the portal.
How applications are assessed
Applications are submitted via the Investor Facilitation Portal, and eligibility is determined from the documents provided and the scheme guidelines. Verification confirms that the enterprise qualifies as a new MSME, operates within an eligible service sector, and holds a valid term loan from a recognised institution.
Each application is screened for completeness and conformity with the scheme's terms, which include filing within one year of loan disbursement or prior to commencement of commercial production. The subsidy receives final approval once every stipulated condition has been verified.
Frequently asked questions
What is the primary benefit of this scheme?
In Gujarat, new service-sector Micro, Small and Medium Enterprises (MSMEs) can claim an interest subsidy on term loans taken for new machinery, equipment, and furniture or fixtures.
Which types of investments are covered by the subsidy?
New machinery, equipment, and furniture or fixtures qualify for the subsidy, whereas spending on land and buildings does not.
Is there any additional benefit for startups?
Registered startups holding Udyam/MSME Registration can claim an extra 1% interest subsidy over and above the standard rates for their Taluka category.
How is the subsidy amount determined?
The interest subsidy on term loans ranges from 6% to 8%, depending on the Taluka category in which the enterprise is located. Annual caps fall between ₹25 lakh and ₹35 lakh, and the subsidy applies for durations of 5 to 7 years.
When must I apply for the interest subsidy?
An enterprise has to submit its interest subsidy application either within one year of the term loan being disbursed 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 may apply.
Sectors
- Msme
- Service Sector
- Gujarat
- Interest Subsidy
Details last verified on 18 September 2026. Source: the issuer's published information.