AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units
A job-linked cash subsidy from the Andhra Pradesh government for Sub-Large and Large textile enterprises, worth up to ₹20 crore and released in instalments across five years.
- Funding amount
- ₹8Cr – ₹20Cr (subsidy)
- Funding type
- Subsidy
- Provider
- Department of Handlooms and Textiles, Government of Andhra Pradesh (Government)
- Application deadline
- Rolling
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Overview
The Employment Subsidy is one window inside AP TAG 4.0, the textile and apparel policy that Andhra Pradesh is running for the 2024-29 period under GO 55. It is delivered by the state's Department of Handlooms and Textiles and is built around a single idea: reward manufacturers for the people they put on the payroll, not only for the plant they install.
Qualifying units are Sub-Large and Large textile enterprises setting up a fresh project in Andhra Pradesh, expanding an existing one, or diversifying into new lines. The payout scales with the relationship between newly created jobs and the capital invested, so two projects of identical size can end up with very different support depending on how labour-intensive each one is.
Because the money is released in annual tranches over five years, the incentive behaves less like a one-time cheque and more like a long-term commitment — the state keeps paying for as long as the unit keeps operating and delivers the jobs and investment it promised. There is no closing date; applications are accepted on a rolling basis.
Highlights
- Cash subsidy of up to ₹20 crore; Sub-Large units cap at ₹10 crore
- Rate of 8% to 10% of eligible Fixed Capital Investment
- Open to Sub-Large and Large textile and apparel enterprises
- Covers new projects, expansions and diversification within Andhra Pradesh
- No deadline — applications are accepted throughout the year
- Released in tranches over five years; no equity taken, nothing to repay
Who can apply
Eligibility is limited to two enterprise size brackets: Sub-Large and Large enterprises. Units outside these brackets are not covered by this scheme.
- Project type: a new manufacturing project, an expansion of an existing unit, or a diversification initiative all qualify.
- Location: the project must be set up within Andhra Pradesh.
- Sector: textile and apparel manufacturing.
- Jobs: only positions that did not exist before the project are counted — existing headcount does not help your case.
- Employment to Investment (E/I) ratio: the unit must be able to demonstrate a ratio in the 1 to 5+ band, and the higher the band, the better the rate on offer.
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units is open to startups at any stage. It is open to startups registered anywhere in India.
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Deadline & timing
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.
What the funding covers
The subsidy is expressed as a share of a project's eligible Fixed Capital Investment (FCI), and that share moves with the Employment to Investment ratio.
- Rate: 8% to 10% of eligible FCI, with stronger employment ratios attracting the higher end of the band.
- Large enterprises at an E/I ratio of 5 and above can receive up to ₹20 crore.
- Sub-Large enterprises in the same E/I band can receive up to ₹10 crore.
- Awards under this window are listed in the ₹8 crore to ₹20 crore range.
The money does not arrive in one go. The approved amount is released in instalments spread across five years, and each instalment depends on the unit honouring the employment and investment milestones it committed to at the outset. The support is a non-repayable cash subsidy — the government takes no equity in the company and nothing has to be paid back.
About the provider
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units is offered by Department of Handlooms and Textiles, Government of Andhra Pradesh, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.
How to apply
Applications are submitted on the . Confirm the current deadline and document checklist there before you start.
Selection process
Applications are submitted to the designated authority within the Andhra Pradesh Industries Department, following the state's official incentives route.
- A committee drawn from the Industries Department screens every application that comes in.
- Screening verifies enterprise size, the nature of the project (new, expansion or diversification) and the new employment the unit projects.
- The committee then evaluates the project's Fixed Capital Investment and the proposed Employment to Investment ratio in detail.
- Approval — along with the applicable percentage and the maximum amount payable — is decided on how closely the project fits the policy's objectives and on the verified E/I ratio.
- Once approved, funds are disbursed in tranches over five years, with each tranche subject to the unit meeting the committed employment and investment milestones.
Documents you’ll need
Before you apply to AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units, keep the following documents ready:
- A pitch deck or short business plan describing the problem, product and traction
- Company registration documents and PAN
- Founder identification (PAN / Aadhaar) and brief profiles
- Recent financial statements or projections
- Product details — a demo, prototype or working link if available
Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.
Who this is best for
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units is best suited for startups in India seeking non-dilutive funding of ₹8Cr – ₹20Cr. If that describes your startup, review the eligibility criteria above before applying.
Frequently asked questions
How much money does the AP TAG 4.0 Employment Subsidy actually provide?
The subsidy works out to between 8% and 10% of your project's eligible Fixed Capital Investment, with the exact rate decided by your Employment to Investment ratio. In rupee terms, a Large enterprise can receive as much as ₹20 crore and a Sub-Large enterprise up to ₹10 crore if its ratio reaches 5 or above. Awards under this window are listed in the ₹8 crore to ₹20 crore range.
Which enterprises can apply for this subsidy?
Only Sub-Large and Large enterprises working in the textile and apparel sector are covered. Your project also has to be located in Andhra Pradesh and must fall into one of three categories: a brand-new project, an expansion of an existing unit, or a diversification initiative.
What is the Employment to Investment ratio and why does it decide my subsidy?
The E/I ratio is the relationship between the new jobs your project creates and the capital it invests. The state uses it because it wants capital that comes with employment attached, so a project that generates more jobs per rupee invested is treated more favourably. Eligible projects sit in a ratio band running from 1 up to 5 and above, and the higher your band, the higher the percentage of Fixed Capital Investment you receive.
Do my existing employees count towards the Employment to Investment ratio?
No. The scheme is built around newly created employment only, so the workforce you already had before the project will not be counted when your ratio is assessed. Only the fresh positions the project generates are taken into account.
Is this subsidy repayable, and does the government take equity in my company?
Neither. It is a non-repayable cash subsidy, so there is nothing to return and no interest to service. The Andhra Pradesh government also does not take any equity stake in the enterprise in exchange for the money.
Is there a last date to submit the application?
There is no fixed closing date — the window is rolling and always open, so applications can be filed at any point. That said, the subsidy is tied to investment and employment milestones, so submitting early enough to align with your project timeline is sensible.
How is the subsidy paid out over five years?
The approved amount is released in tranches across a five-year period rather than as a lump sum. Each tranche is linked to your unit meeting the employment and investment milestones it committed to, which means the support continues only as long as the project performs as proposed.
What documents will I need to put together?
You will need the project proposal, financial statements and employment generation projections that the policy stipulates, along with any other material the official application process for AP TAG 4.0 incentives requires. The detailed guidelines are set out in the Andhra Pradesh Textile Policy 2024-29 (GO 55), so review those before you start assembling your file.
Where do I apply for the Employment Subsidy?
Applications go to the designated authority in the Andhra Pradesh Industries Department through the state's official incentives portal at apindustries.gov.in. Once submitted, the application is screened by a departmental committee before any decision on approval and the applicable subsidy percentage is taken.
Does the subsidy cover any kind of textile project, or only manufacturing?
The scheme is aimed at the textile and apparel sector, and it is open to three project routes: a completely new unit, an expansion of an existing facility, or a diversification into new products. All three are treated as eligible project types under AP TAG 4.0.
Is DPIIT recognition required for AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units?
No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units, though having it can strengthen your application and unlock other benefits.
Who is eligible to apply for AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units?
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units is open to startups at any stage. It is open to startups registered anywhere in India.
Who offers AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units?
AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units is offered by Department of Handlooms and Textiles, Government of Andhra Pradesh, a government body. It is provided as non-dilutive funding.
How do I apply for AP TAG 4.0 Employment Subsidy — Up to ₹20 Cr for Textile Units?
Apply directly through the official application link on this page. Review the eligibility criteria and prepare your startup documents before you begin.
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