Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs

The Investment Promotion Scheme (IPS) is the MSME incentive framework run by the Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu. Within it sits a focused sub-scheme called Incentive For Local Employment, which pays industrial units a one-time recruitment incentive when they build their workforce out of residents of the Union Territory.

The parent IPS was created to make the UT's small-business base sturdier in the face of market swings. Its stated aims include a livelier and more successful MSME ecosystem, greater participation by women in business, and more jobs for local people. The local employment component works on the jobs side of that agenda — it gives units a financial reason to hire locally rather than looking outside the territory, which in turn chips away at unemployment in the region.

Eligibility is broad in one respect: it covers both new manufacturing and service units and existing units that are expanding or diversifying. The scheme is time-boxed around the start of operations — commercial production must have begun between May 20, 2022 and May 19, 2027 — and applications are accepted until May 19, 2027.

• One-time recruitment incentive of ₹3,00,000 for every 20 local employees hired
• Maximum benefit of ₹15,00,000 per eligible MSME unit
• Open to new and expanding manufacturing and service units in Dadra & Nagar Haveli and Daman & Diu
• Employees counted must be UT domiciles and above 18 years of age
• Commercial production must have started between May 20, 2022 and May 19, 2027
• Applications are accepted until May 19, 2027

The incentive is meant for Micro, Small and Medium Enterprise units in the manufacturing and service sectors that are set up in the Union Territory of Dadra & Nagar Haveli and Daman & Diu and that hire local residents.

• Unit type: new manufacturing or service units, as well as existing manufacturing or service units that are going in for expansion or diversification.
• Location: the unit must be based in Dadra & Nagar Haveli and Daman & Diu.
• Production start: commercial production must have commenced between May 20, 2022 and May 19, 2027.
• Employees counted: each recruited worker must be above 18 years of age and must hold a Domicile certificate of the UT of Dadra & Nagar Haveli and Daman & Diu.

Only local hires who meet the domicile and age conditions count towards the incentive, so units should collect and verify those records before applying.

Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs is open to startups at any stage. It is open to startups registered anywhere in India.

Applications for Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs are open and the current deadline is 19 May 2027. Deadlines can change — always reconfirm on the official source before submitting.

A qualifying unit receives a one-time recruitment incentive of ₹3,00,000 for every 20 local employees it hires, capped at ₹15,00,000 per eligible MSME unit.

The payment is intended to soften the cost of recruiting local staff and of the initial period of running a larger workforce, so that units can grow their headcount without carrying the entire expense themselves.

• ₹3,00,000 for each block of 20 local employees recruited
• Maximum of ₹15,00,000 per eligible unit
• Paid as a one-time incentive
• Open to both manufacturing and service units that satisfy the eligibility conditions

Because this is a grant-style incentive rather than an investment, it does not dilute the promoter's holding in the business.

Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs is offered by Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu, a government body. As a government-backed grant, it is publicly funded and open to eligible startups across India.

Before you apply to Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs, 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.

Investment Promotion Scheme: ₹3L–₹15L Local Employment Incentive for MSMEs is best suited for startups in India seeking non-dilutive funding of ₹3L – ₹15L. If that describes your startup, review the eligibility criteria above before applying.