Incentive Scheme for MSMEs in Powerloom Sector: Interest Subsidy on Term Loan (West Bengal)
Department of Micro, Small and Medium Enterprises and Textiles, Government of West Bengal · Central government
The scheme funds eligible West Bengal MSME powerloom units with an interest subsidy on term loans for installing new-age shuttleless powerlooms to boost production.
Closed. Applications closed on 31 December 2024. The details below describe the most recent cycle.
Key facts
- Subsidy amount
- Up to ₹8,75,00,000
- Instrument
- Subsidy
- Deadline
- 31 December 2024
- Disbursement
- Paid in tranches
- Scheme duration
- 5 years
About this scheme
The 'Interest Subsidy on Term Loan' operates as a sub-scheme within the 'Incentive Scheme for MSMEs in Powerloom Sector', introduced on January 1, 2022, by the Department of Micro, Small & Medium Enterprises and Textiles, Government of West Bengal. Its validity extends until December 31, 2024. The parent scheme aims to provide fiscal incentives to textile MSMEs for installing modern shuttleless powerlooms, with the goal of producing higher-quality fabrics, building a sustainable textile ecosystem, optimising resource use, creating jobs, and broadening the state's footprint to position West Bengal as a frontrunner in India's powerloom industry.
Under this sub-scheme, eligible micro, small, or medium enterprises in the powerloom sector can claim an interest subsidy on their annual interest obligation. This benefit applies to term loans obtained from commercial banks, cooperative banks, RBI-approved scheduled banks, Regional Rural Banks (RRBs), and central or state financial institutions. The funds are designated for approved projects that upgrade powerloom technology and infrastructure, thereby aiding the sector's modernisation and expansion.
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
- West Bengal
- Applicable to all Micro, Small, and Medium Enterprises (MSMEs) in the powerloom sector of West Bengal. - Enterprises must have commenced production between January 1, 2022, and December 31, 2024. - Requires a Four-party agreement with the Directorate of Textiles, Financial institution, and Tantuja. - Projects must be covered by a detailed feasibility report and approved by a Central Financial Institution, Commercial Bank, or State Financial Institution.
How to apply
- Applications must be submitted offline using the prescribed Form-A2, accompanied by all relevant supporting documentation. - The completed application should be sent to the Directorate of Textiles. - The initial application is due within 12 months of the date commercial production begins. - The start of commercial production must occur during the scheme's validity period, which runs from January 1, 2022, to December 31, 2024. - Applications are to be addressed to: Directorate of Textiles, Handlooms, Spinning Mills, Silk Weaving & Handloom Based Handicrafts Division, New Secretariat Buildings, 1, K. S. Roy Road, 5th Floor, 'B' Block, Kolkata 700001.
How applications are assessed
The Directorate of Textiles reviews each application to confirm it meets the eligibility criteria, which includes checking the project's feasibility report and verifying that a financial institution has approved the proposal. Following this review, the interest subsidy is sanctioned on the basis of these approvals, along with an annual verification of the interest payments made.
Frequently asked questions
What is the main objective of the Interest Subsidy on Term Loan scheme?
The scheme offers fiscal incentives to MSMEs in West Bengal’s powerloom sector for installing new-age shuttleless powerlooms, aiming to boost quality fabric production, create employment, and position the state as a leader in the industry.
Which enterprises are eligible to apply for this subsidy?
The scheme is open to MSMEs in the powerloom sector that began production between January 1, 2022, and December 31, 2024, and meet other specific criteria. They must also hold a detailed feasibility report for their project, approved by a recognised financial institution.
What are the specific benefits for Micro & Small Enterprises?
Micro and Small Enterprises in Zones A and B can claim an interest subsidy of 55% of their annual interest liability for five years; those in Zones C, D, and E are eligible for 70% over the same period.
What are the specific benefits for Medium Enterprises?
Medium Enterprises can claim an interest subsidy of 25% of the total term loan interest paid, for a period of 5 years, with an annual cap of ₹1,75,00,000.
How is the interest subsidy disbursed?
The interest subsidy is disbursed once a year, provided the enterprise submits a statement or certificate from its lending bank or financial institution confirming that all interest payments were made on time and without default during that period.
What is the application deadline for this scheme?
The scheme remains in force until December 31, 2024. Eligible enterprises must file their initial application within 12 months of commencing commercial production, provided that production began during the scheme’s validity period.
Sectors
- Manufacturing Industrial
- Msme
- Powerloom Sector
- Textile Industry
- West Bengal
- Interest Subsidy
Details last verified on 3 August 2026. Source: the issuer's published information.