IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD
A Dadra & Nagar Haveli and Daman & Diu government subsidy that covers 50% of the interest on MSME term loans — up to ₹30 lakh a year and ₹1.5 crore across five years.
- Funding amount
- ₹1 – ₹1.5Cr (subsidy)
- Funding type
- Subsidy
- Provider
- Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu (Government)
- Application deadline
- 19 May 2027
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Overview
The Investment Promotion Scheme (IPS) is the MSME incentive framework administered by the Department of Industries, U.T. Administration of Dadra & Nagar Haveli and Daman & Diu. Its Assistance of Interest Subsidy arm is the component built for manufacturing and service units: it reimburses a share of the interest an enterprise pays on a term loan raised for plant, machinery or office fit-outs.
The scheme was first notified on 3 July 2015 for a five-year run, and a fresh term opened on 20 May 2022. That term stays in force until 19 May 2027, and any unit that begins commercial production inside this window can seek support.
An interest subsidy cuts the cost of borrowing directly, which is why it matters for small units that would otherwise postpone buying equipment. The UT administration positions the scheme as a way to keep local industry steady against market swings, draw more women into business ownership, bring down unemployment among residents, and encourage units to hire locally.
Highlights
- Interest subsidy of 50% on bank interest, capped at ₹30 lakh per year
- Total support of up to ₹1.5 crore across five years
- Additional 10% subsidy for women, differently-abled, young and registered-startup entrepreneurs
- Covers term loans for machinery, equipment and furniture/fixtures — not land or buildings
- Open to new and expanding MSME units located in Dadra & Nagar Haveli and Daman & Diu
- Scheme term runs until 19 May 2027, with applications due within one year of first disbursement or production start
Who can apply
Who can apply
- Unit type: a new manufacturing or service unit in the MSME sector, or an existing manufacturing/service unit going in for expansion or diversification.
- Location: the unit has to be situated in the U.T. of Dadra & Nagar Haveli and Daman & Diu.
- Production start: commercial production must have begun between 20 May 2022 and 19 May 2027.
- Continuity: the enterprise must stay in production for five years from the day commercial production started.
- Compliance: pollution control measures prescribed by the competent authority have to be observed.
- Loan condition: the term loan must be sanctioned by a bank or financial institution as per RBI guidelines.
- Application timing: the form has to be filed within one year of the loan's first disbursement, or within one year of commercial production starting — whichever falls earlier.
IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD 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
Applications for IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD are open and the current deadline is 19 May 2027. Deadlines can change — always reconfirm on the official source before submitting.
What the funding covers
The scheme pays 50% of the interest your bank charges on an eligible term loan, capped at ₹30,00,000 (₹30 lakh) per year. Support runs for five years, or until the loan is fully repaid if that happens first.
Stretched to the maximum, that adds up to ₹1,50,00,000 (₹1.5 crore) of assistance per enterprise across the five-year period.
What the term loan can cover
- Equipment
- Machinery
- Furniture and fixtures
Land and building costs fall outside the scope of this subsidy.
An extra 10% interest subsidy is available to:
- Differently-abled entrepreneurs
- Women entrepreneurs
- Registered startups in the manufacturing and service sectors
- Young entrepreneurs who were below 35 years of age when the term loan was sanctioned
About the provider
IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD is offered by Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.
Documents you’ll need
Before you apply to IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD, 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
IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD is best suited for startups in India seeking non-dilutive funding of ₹1 – ₹1.5Cr. If that describes your startup, review the eligibility criteria above before applying.
Frequently asked questions
How much money does the IPS interest subsidy actually give a unit?
The scheme pays 50% of the interest your bank charges on the eligible term loan, and that payout is capped at ₹30 lakh in any single year. You can keep receiving it for five years, or until the loan is repaid, whichever is earlier. If the subsidy runs for the full five years, the total assistance can reach ₹1.5 crore.
Which businesses are eligible for this subsidy?
New manufacturing or service units in the MSME sector qualify, and so do existing manufacturing or service units that are expanding or diversifying. The unit must be located in the U.T. of Dadra & Nagar Haveli and Daman & Diu, must have started commercial production between 20 May 2022 and 19 May 2027, and must commit to staying in production for five years from that start date. Pollution control measures prescribed by the competent authority also have to be followed.
Does the scheme take equity or a stake in my company?
No. This is an interest subsidy, not an investment, so no shares or ownership stake is taken in your business. It simply reimburses a portion of the interest you pay to your lender on a qualifying term loan.
What kind of loan does the subsidy apply to?
It applies to term loans used for equipment, machinery, and furniture or fixtures. Loans taken for land and building are explicitly excluded. The loan itself must be sanctioned by a bank or financial institution in line with RBI guidelines — an informal or non-bank arrangement will not qualify.
Are there extra benefits for women, young or differently-abled entrepreneurs?
Yes. Differently-abled entrepreneurs, women entrepreneurs, and registered startups in the manufacturing and service sectors each get an additional 10% interest subsidy. Young entrepreneurs who had not crossed 35 years of age at the time their term loan was sanctioned also receive an additional 10%.
What is the last date to submit my application?
There are two clocks running and the earlier one applies. You must file within one year of the first disbursement of your term loan, or within one year of commencing commercial production — whichever comes first. The scheme term itself closes on 19 May 2027, and the deadline shown for this programme is 19 May 2027.
How do I apply for the Investment Promotion Scheme interest subsidy?
Applications are filed online through the official Single Window Portal of Dadra & Nagar Haveli and Daman & Diu. You begin by registering an account, then confirm your email through the verification link sent to you and verify your mobile number using the OTP. Once verified, your mobile number and a unique PIN are emailed to you; use them to log in. Inside the portal, open the "Departments & Services" tab, locate "District Industries Centre DD & DNH", and click through to the Investment Promotion Scheme: 2022 to 2027 form. Fill in the common application form and upload the required supporting documents before submitting.
What happens after I submit my application?
The District Industries Centre processes the application once it is submitted. You should keep checking your application status on the portal, and be ready to respond if the authorities ask for further information or documents.
Who do I contact if the portal is not working or if I have a scheme query?
For technical problems with the Single Window Portal, call 0260-2231885 or 0260-2231886, or write to ddegs-dd@nic.in. For matters relating to the scheme itself, reach the District Industries Centre on 0260-2260871 or 0260-2260310, or email dic-dd@nic.in.
Can an existing unit that is expanding or diversifying claim this subsidy?
Yes. Expansion and diversification projects by existing manufacturing or service units are covered, provided the unit meets the other conditions — it must be in Dadra & Nagar Haveli and Daman & Diu, have begun commercial production within the 20 May 2022 to 19 May 2027 window, remain in production for five years, follow prescribed pollution control measures, and file the application within the stipulated one-year period.
Is DPIIT recognition required for IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD?
No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD, though having it can strengthen your application and unlock other benefits.
Who is eligible to apply for IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD?
IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD is open to startups at any stage. It is open to startups registered anywhere in India.
Who offers IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD?
IPS Interest Subsidy — Up to ₹1.5 Cr for MSMEs in DNH & DD is offered by Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu, a government body. It is provided as non-dilutive funding.
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