Interest Subsidy (For Micro, Small, Medium and Large New Industries)
Industries and Commerce Department, Government of Puducherry · Central government
Puducherry's interest subsidy funds micro, small, medium and large industrial units with up to 25% (max ₹5 lakh/annum) on fixed asset and working capital loans.
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 (For Micro, Small, Medium and Large New Industries). The scheme has been in force since April 1, 2017, and applies across the whole UT of Puducherry. It extends fiscal assistance to industrial units that borrow from financial institutions to build fixed assets or to meet working capital requirements.
Under the scheme, an interest subsidy of 25% of the annual interest paid on eligible loans is provided. This lowers operating costs for industries and improves conditions for investment and expansion.
The scheme covers both new establishments and the diversification or modernisation of existing units. It carries a condition that at least 60% of employment must go to local residents.
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
- Any industry classified as Micro, Small, Medium or Large may apply. - Investment must have been made on or after April 1, 2017. - A minimum of 60% of the unit's employment must go to residents of Puducherry UT. - The unit must hold a loan from a financial institution, taken for fixed assets and/or working capital. - Fixed assets procured under the scheme may not be transferred or disposed of for 5 years, counted from the date of application or disbursement.
How to apply
1. Download the prescribed application form from the Directorate of Industries and Commerce, Puducherry's official website. 2. Complete every mandatory field in the form without error, and enclose self-attested copies of each document that is required. 3. Hand over the signed, fully completed form together with the supporting documents to the authority concerned. 4. Ask for a receipt or acknowledgement and keep it safely; check that it carries the submission date, time, and a unique identification number where one is issued.
How applications are assessed
The Directorate of Industries screens each application and assesses it on merit to arrive at the subsidy amount that can be allowed. Its recommendations then go before the State Level Committee, which examines the merits of every case to establish whether the unit is eligible for the incentive or subsidy and, if so, recommends the exact amount admissible to it.
Frequently asked questions
What is the purpose of the Interest Subsidy Scheme?
The scheme encourages entrepreneurs to set up new industries and supports existing ones by granting an interest subsidy on eligible loans for fixed assets and working capital, with the aim of promoting industrial growth in Puducherry.
What is the maximum interest subsidy an industrial unit can receive?
Eligible units can receive an interest subsidy covering up to 25% of the annual interest paid, subject to a maximum of ₹5,00,000 per annum.
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?
Existing industrial units can claim the subsidy for expansion, diversification or modernisation, subject to the applicable ceiling limit.
What is the local employment requirement for eligible units?
Industrial units in Puducherry are required to reserve at least 60% of their employment for residents of the Union Territory, and this share must be sustained for the entire subsidy period as laid down in the Affidavit.
How is the subsidy disbursed to eligible units?
The interest subsidy is paid out through the financial institution that provided the industrial unit with the eligible loan. It may be released in one or several instalments, depending on whether funds are available.
Sectors
- Puducherry
- Msme
- Interest Subsidy
- Industrial Development
- Fixed Assets
- Working Capital
Intended beneficiaries
- Local Communities
Details last verified on 18 September 2026. Source: the issuer's published information.