Investment Promotion Scheme (IPS) For Cottage Industries: Financial Assistance To Cottage Industries
By Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu
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Quick Answer
This scheme provides capital and interest subsidies to cottage industries in Dadra & Nagar Haveli and Daman & Diu to foster growth and employment in the MSME sector.
- Funding amount
- Up to ₹5L
- Funding type
- Subsidy
- Application deadline
- 203d — 19 May 2027
- Registrations needed
- Udyam registration
About this subsidy
The "Financial Assistance To Cottage Industries" is a pivotal sub-scheme under the broader "Investment Promotion Scheme (IPS)" for Cottage Industries. Initially launched on July 3, 2015, for a five-year term, it has been extended by the Department of Industries, U.T. Administration of Dadra & Nagar Haveli and Daman & Diu, and will remain operative until May 19, 2027. The overarching objective of the IPS is to deliver incentives and assistance to the MSME Sector, enabling them to thrive amidst market challenges and contribute to a vibrant economy. This initiative aims to transform the Union Territory into a Specialized Hub for MSMEs, enhance women's engagement in business, mitigate local unemployment, and encourage the hiring of resident labor. Specifically, this sub-scheme is designed to offer critical financial assistance to cottage industries by subsidizing term loans secured through various financial institutions, including Nationalized, Cooperative, Public Sector, and Private Banks.
Eligibility
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Subsidy providers
Provider
Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and DiuDadra and Nagar Haveli and Daman and Diu · India
Benefits & Funding
- Amount
- Up to ₹5L
What You Get
The scheme provides significant financial assistance to cottage industries. Key benefits include a capital subsidy of 25% of the term loan amount, capped at ₹5,00,000/-, specifically for setting up new units. An additional 10% capital subsidy is available for Scheduled Castes, Scheduled Tribes, women, or differently-abled individuals with 30% or more disability, making the total capital subsidy up to 35% for these groups. Furthermore, an interest subsidy of 50% on the interest charged by banks or NBFCs will be reimbursed for a period of up to 5 years from the date of commencement of production. The maximum term loan eligible for these benefits is ₹20,00,000/-.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Selection Process
The scheme outlines a clear online registration and application submission process. While detailed selection criteria beyond initial eligibility are not explicitly described, applications will likely undergo review by the District Industries Centre, DNH & D&D, to ensure compliance with all stated eligibility requirements and document completeness. Eligible applications will then proceed to sanction and disbursement of the specified subsidies.
Application Process
- 1
Register Account
Visit the registration page, provide personal and contact information, and complete email and mobile verification to create an account.
You - 2
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How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary objective of the Investment Promotion Scheme (IPS)?
The IPS aims to provide incentives and assistance to the MSME Sector to nurture them, protect them from market vagaries, and make them vibrant and successful, thereby making the U.T. a Special Hub for the MSME sector. It also focuses on maximizing women's participation, reducing unemployment, and incentivizing local labor.
What specific financial assistance is offered under the "Financial Assistance To Cottage Industries" sub-scheme?
This sub-scheme provides a capital subsidy of 25% of the term loan amount, up to a maximum of ₹5,00,000, for setting up a cottage industry. It also offers a 50% interest subsidy on the interest charged by banks/NBFCs for up to 5 years from the date of production commencement.
Are there any additional subsidies for specific categories of applicants?
Yes, an additional 10% capital subsidy is provided to Scheduled Castes, Scheduled Tribes, women, or differently-abled individuals with 30% or more disability, effectively increasing their total capital subsidy to 35% of the term loan amount.
What is the maximum loan amount eligible for benefits under this scheme?
The maximum limit for the Bank Loan that qualifies for these subsidies is ₹20,00,000.
What are the age and educational eligibility criteria for applicants?
Applicants must be above 18 years of age and have passed a minimum of the Fourth (IV) standard.
What kind of experience or training is required for eligibility?
Applicants should have either undergone training for a minimum of one month from Government of India recognized Institutes in their proposed business area, or have a minimum of 1 year of experience in the same activity, or be a hereditary craftsperson.
Sources
Data on this page is compiled from official program and provider references.
