De-Carbonization Subsidy (AP) — Up to 25% of Project Cost
An Andhra Pradesh subsidy under the AP TAG 4.0 policy that pays 10% to 25% of project cost, capped at 6% of eligible FCI, for sub-large and large enterprises investing in climate-friendly plant, machinery and equipment.
- Funding amount
- Varies by program
- 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 De-Carbonization Subsidy is a state incentive that sits under Andhra Pradesh's AP TAG 4.0 policy — the Textile Policy for 2024-29 — and is administered by the Department of Handlooms and Textiles. The idea behind it is simple: established manufacturers tend to modernise faster when the state shares part of the bill for cleaner technology.
Support goes towards investment in climate-friendly machinery, equipment and plant. Qualifying purchases are those that cut emissions and pollution, save water, reduce waste, raise energy efficiency, or add green building capacity. Both entirely new projects and the expansion or diversification of an existing unit can be covered.
Only a share of the project cost is met by the subsidy, so an enterprise has to fund the balance from its own resources. In exchange, industries falling in either the Red or the Non-Red environmental category get a practical route to shrinking their carbon footprint without carrying the full capital burden alone.
Highlights
- Pays 10% to 25% of project cost, capped at 6% of eligible Fixed Capital Investment (FCI)
- Open to sub-large and large enterprises in Andhra Pradesh
- Funds climate-friendly plant, machinery and equipment, including green buildings
- Covers pollution and emission reduction, water conservation, waste minimisation and energy efficiency
- Available for new, expansion and diversification projects in both Red and Non-Red category industries
- Rolling applications; approved subsidy is disbursed in tranches over 5 years
Who can apply
Eligibility here is decided by the scale of the enterprise and the nature of the investment, not by founder profile or turnover limits.
- Enterprise size: the scheme is open to sub-large and large enterprises.
- Project type: new projects qualify, as do expansion and diversification of an existing unit.
- What the money buys: the investment must be in climate-friendly plant, machinery and equipment — assets that reduce pollution and emissions, conserve water, minimise waste, improve energy efficiency, or form part of green building development.
- Environmental category: industries classified as both Non-Red and Red are covered.
- Geography: the scheme is an Andhra Pradesh state incentive under the AP TAG 4.0 policy.
De-Carbonization Subsidy (AP) — Up to 25% of Project Cost 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
De-Carbonization Subsidy (AP) — Up to 25% of Project Cost 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 covers 10% to 25% of project cost. Where a particular project lands within that band depends on the size of the enterprise (sub-large or large) and whether it falls in the Red or Non-Red environmental category.
Whichever percentage applies, the payout for a single project is capped at 6% of the eligible Fixed Capital Investment (FCI).
Approved amounts are released in tranches spread across 5 years rather than as one lump sum.
Because the scheme funds only a portion of the project, the enterprise must arrange the remaining capital itself.
Eligible spending is confined to climate-friendly assets — machinery, equipment and plant that reduce emissions and pollution, conserve water, cut waste, improve energy efficiency, or support green buildings.
About the provider
De-Carbonization Subsidy (AP) — Up to 25% of Project Cost 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 go to the Andhra Pradesh Industries Department or to the nodal agency named in the policy guidelines. Each submission needs a detailed project proposal, including cost breakdowns and an assessment of the environmental impact.
A review committee from the Industries Department then examines the proposal. It weighs three things: whether the investment genuinely meets the climate-friendly criteria, whether the project is financially viable, and how well it aligns with the objectives of the AP TAG 4.0 policy.
Technical experts may also be brought in to evaluate the proposed machinery, equipment and plant for environmental impact and efficiency.
Projects that satisfy the eligibility conditions and clear the technical review are approved, after which the subsidy is disbursed in tranches over five years.
Documents you’ll need
Before you apply to De-Carbonization Subsidy (AP) — Up to 25% of Project Cost, 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.
Frequently asked questions
How much funding does the De-Carbonization Subsidy provide?
The subsidy works out to between 10% and 25% of your project cost. Where you land within that range depends on the size of your enterprise — sub-large or large — and whether your industry is classified as Red or Non-Red. There is also a hard ceiling: the total cannot exceed 6% of your eligible Fixed Capital Investment (FCI).
Who is eligible to apply for this subsidy?
The scheme is meant for sub-large and large enterprises. Your project can be a brand new one, an expansion, or a diversification of your existing operations. It applies to industries in both the Non-Red and Red environmental categories, and it is an Andhra Pradesh state incentive.
What kind of investment does the subsidy actually cover?
Funding is restricted to climate-friendly plant, machinery and equipment. That includes assets which reduce pollution and emissions, conserve water, minimise waste, or improve energy efficiency, as well as investment in green buildings. Ordinary capital expenditure that does not deliver an environmental gain falls outside the scheme.
Is there a maximum limit on the subsidy?
Yes. Even though the headline rate is 10% to 25% of project cost, the amount paid for any single project is capped at 6% of the eligible Fixed Capital Investment (FCI). That cap applies regardless of the enterprise size or category.
Does the government take equity or a stake in my company for this subsidy?
No. This is a subsidy incentive, not an equity investment, so it does not dilute your shareholding. It is also not designed to cover the whole project — the remaining portion of the cost has to be funded by the enterprise itself.
Is there a deadline to submit the application?
The scheme runs on a rolling basis, which means there is no fixed last date or application window to race against. You can put your proposal together and submit it at any point, and it will be taken up for review.
How is the approved subsidy paid out?
Once a project is approved, the subsidy is disbursed in tranches spread over a period of 5 years rather than as a single payment. The tranche schedule follows the terms set out in the policy.
Which policy does this subsidy sit under, and who runs it?
The De-Carbonization Subsidy is part of the AP TAG 4.0 policy, also known as the Textile Policy 2024-29. It is administered by the Department of Handlooms and Textiles, Government of Andhra Pradesh.
How do I apply for the De-Carbonization Subsidy?
Start with the official guidelines document available on the Andhra Pradesh Industries portal at https://www.apindustries.gov.in/Incentives/Index.aspx, which sets out the procedures and forms. You will need to prepare a detailed project proposal covering your planned investment in climate-friendly plant, machinery and equipment, along with cost breakdowns and an environmental impact assessment. Submit the complete application to the Andhra Pradesh Industries Department or the designated nodal agency named in the policy.
Do both new units and existing units qualify?
Yes. The scheme covers new projects as well as expansion and diversification projects undertaken by sub-large and large enterprises, so long as the investment goes into qualifying climate-friendly assets.
Is DPIIT recognition required for De-Carbonization Subsidy (AP) — Up to 25% of Project Cost?
No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for De-Carbonization Subsidy (AP) — Up to 25% of Project Cost, though having it can strengthen your application and unlock other benefits.
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