25% Capital Investment Subsidy Scheme
Standing Committee of the Island Development Authority, Lakshadweep · Central government
Lakshadweep's 25% capital investment subsidy, up to ₹6.25 lakhs, funds local entrepreneurs setting up Micro and Small Enterprises.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- Up to ₹6,25,000
- Instrument
- Subsidy
- Deadline
- Rolling
- Disbursement
- Reimbursed after spend
About this scheme
Lakshadweep, a Union Territory classified as a 'No Industrial Area', relies heavily on developing Small-Scale Industrial units to spur economic growth and generate self-employment. Taking into account the distinct difficulties and requirements of industrialising the islands, the Government of India accepted an Expert Committee's recommendations and sanctioned the 25% Capital Investment Subsidy Scheme. The purpose of this scheme is to speed up the emergence of start-up industries in Lakshadweep, and it is structured to help local entrepreneurs and unemployed youth set up viable Micro and Small Enterprises.
The scheme's main aims are to encourage the setting up and expansion of Micro and Small Enterprises throughout the islands, which in turn creates essential jobs in the private sector. Its broader goal is to make a substantial contribution to industrial promotion and the overall economic development of Lakshadweep, while enabling residents through entrepreneurship.
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
- Lakshadweep
- Individuals aged above 18 years, including women, ex-servicemen and physically handicapped persons. - New Micro or Small units undertaking manufacturing or servicing activities (activities on the negative list are excluded). - Units set up in Lakshadweep Islands. - Investment in Plant & Machinery and Building below ₹25.00 Lakhs, in the case of Micro Enterprises/Units. - Entrepreneurs Memorandum Part-II (Permanent Registration) under the MSME Act 2006, or Udyog Aadhar registration, or any other specified registration. - Institutions registered under the Societies Registration Act 1960, and Self-Help Groups, provided they have not availed financial benefits under any other scheme.
How to apply
- Details of the scheme are published each year through Panchayat Raj Institutions and on the Lakshadweep website. - Entrepreneurs setting up a new unit must send their application form (following department guidelines) together with all supporting documents to the DCs/SDOs of the island concerned. - Claims are verified and units physically inspected by Island-level Committees headed by the DCs/SDOs. - Once verified, the claims are passed on to the Director, Industries, in the prescribed format, with full particulars and the entrepreneur's bills attached. - These details are subsequently examined by the District Level Scrutinizing Committee, which recommends how much subsidy the beneficiary should receive in line with the scheme guidelines.
How applications are assessed
Island Level Committees, chaired by Deputy Collectors/SDOs and including representatives from PWD, FPU and the Department of Industries, carry out the first round of scrutiny. They verify claims, inspect the units physically, and send their recommendations with full details and bills to the Director of Industries.
A District Level Scrutinizing Committee, made up of the Secretary (Industries) and other senior officials, then checks the information forwarded by the Island Level Committees and fixes the final subsidy amount to be recommended to the beneficiary, in keeping with the scheme guidelines.
Frequently asked questions
What is the maximum subsidy available under this scheme?
The scheme offers up to ₹6.25 lakhs, amounting to 25% of the enterprise's total cost, which takes in land, machinery and construction.
Who is eligible to apply for this subsidy?
Anyone aged over 18 — including women, ex-servicemen and persons with disabilities — may apply, as may institutions registered under the Societies Registration Act 1960 and Self-Help Groups. The scheme also covers new Micro or Small manufacturing or servicing units set up in Lakshadweep where investment in plant and machinery and building stays below ₹25.00 lakh.
Are there any activities excluded from this scheme?
Yes. Industries that process or prepare intoxicants such as beedi, pan and cigarettes, and those manufacturing polythene carry bags below 20 microns or recycled plastic items for foodstuffs, fall on the negative list owing to the environmental problems they cause.
What registration is required for availing the subsidy?
Registration under the MSME Act 2006 is required, whether through an Entrepreneurs Memorandum Part-II (Permanent Registration) filed with the Director of Industries, U.T. of Lakshadweep, Udyog Aadhar registration, or another specified registration.
How does the application process work?
Applications are invited under this scheme once a year. New entrepreneurs should file their application form along with supporting documents with the DC/SDO of their island; these are then verified and inspected by Island-level Committees and subsequently reviewed by a District Level Scrutinising Committee.
Sectors
- Micro Enterprise
- Small Enterprise
- Lakshadweep
- Capital Subsidy
- Employment Generation
Details last verified on 16 September 2026. Source: the issuer's published information.