Interest Subsidy (For Micro, Small, Medium and Large New Industries)
Industries and Commerce Department, Government of Puducherry · Central government
Puducherry UT scheme provides up to 25% interest subsidy (max ₹5 lakh/annum) to micro, small, medium, and large industrial units on loans for fixed assets and working capital.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- Up to ₹5,00,000
- Instrument
- Subsidy
- Deadline
- Rolling
- Disbursement
- Reimbursed after spend
About this scheme
The Industries and Commerce Department, Union Territory of Puducherry, administers the Interest Subsidy scheme for Micro, Small, Medium and Large New Industries. Operational across the UT of Puducherry since April 1, 2017, the scheme provides financial assistance to industrial units that have obtained loans from financial institutions for fixed asset creation and working capital requirements.
Eligible businesses receive an interest subsidy equal to 25% of the annual interest paid on such loans. This support lowers operational costs for industries and encourages investment and expansion. The scheme applies to new establishments as well as to diversification or modernisation efforts of existing units. It also mandates that at least 60% of employment be reserved for local residents, thereby supporting the local economy and job creation.
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
- Not specified
- DPIIT startup recognition
- Not specified
- GST registration
- Not specified
- Where the business may be based
- Puducherry
- All Micro, Small, Medium, and Large Industries are eligible. - Investments must have been made on or after April 1, 2017. - At least 60% of employment must be provided to residents of Puducherry UT. - Must be availing a loan from a financial institution for fixed assets and/or working capital. - Fixed assets acquired under the scheme cannot be transferred or disposed of for 5 years from application/disbursement.
How to apply
- **Step 1:** Secure the standard application form from the Directorate of Industries and Commerce, Puducherry’s official website. - **Step 2:** Complete every required field on the form with precision, and enclose self-attested copies of each mandatory document. - **Step 3:** Hand over the fully completed and signed form, together with the supporting documents, to the relevant official. - **Step 4:** Ask for and keep the acknowledgement or receipt issued by the authority, verifying that it records the date and time of submission, along with a unique identification number, where provided.
How applications are assessed
The Directorate of Industries examines each application and assesses it on merit to decide the subsidy amount that can be sanctioned. Its recommendations are forwarded to the State Level Committee, which reviews the details of every case to confirm whether the unit meets the criteria for the incentive or subsidy. Following this review, the committee recommends the exact amount of incentive or subsidy the unit is eligible to receive.
Frequently asked questions
What is the purpose of the Interest Subsidy Scheme?
The scheme offers an interest subsidy on eligible loans for fixed assets and working capital, encouraging new industrial ventures and supporting existing enterprises in Puducherry. This fiscal assistance is intended to promote industrial growth in the region.
What is the maximum interest subsidy an industrial unit can receive?
Eligible units can claim an interest subsidy of up to 25% of the annual interest paid, capped at ₹5,00,000 per year.
How long is the interest subsidy provided?
Units in Puducherry and Karaikal receive the subsidy for 5 years, while those in Mahe and Yanam receive it for 7 years.
Are existing industrial units eligible for this scheme?
Yes, existing industrial units that make additional investments for expansion, diversification, or modernisation are eligible for the subsidy, subject to the specified ceiling limit.
What is the local employment requirement for eligible units?
Industrial units must ensure that at least 60% of their workforce comprises residents of the Union Territory of Puducherry, and this proportion must be sustained for the entire subsidy period as stated in the Affidavit.
How is the subsidy disbursed to eligible units?
The interest subsidy is paid out through the financial institution that provided the eligible loan, in one or more instalments, depending on the availability of funds.
Sectors
- Puducherry
- Msme
- Interest Subsidy
- Industrial Development
- Fixed Assets
- Working Capital
Intended beneficiaries
- Local Communities
Details last verified on 3 August 2026. Source: the issuer's published information.