De-Carbonization Subsidy (AP) — Up to 25% of Project Cost — Frequently Asked Questions
Answers to the questions founders most often ask about De-Carbonization Subsidy (AP) — Up to 25% of Project Cost — who qualifies, the funding amount, required documents and how the application works.
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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