Gujarat Textile Policy Interest Subsidy: 7% on Loans for Labour Intensive Units — Frequently Asked Questions

The scheme reimburses 7% of the interest on your sanctioned term loan, and it does so for 8 years. The payout is capped at 3% of your Eligible Fixed Capital Investment per year, so the ceiling rises with the size of your eligible investment. You must also bear at least 2% of the interest yourself.

A Labour Intensive Unit is one that employs a minimum of 4,000 persons, of whom at least 1,000 must be women, with the headcount verified through EPF registration. If you are an existing unit going in for expansion or diversification, you need to create entirely new employment of a comparable scale during the operative period of the policy.

The scheme itself is rolling and always open, running across the policy window from 1 October 2024 to 29 September 2029. The real deadline is relative to your own project: the application must be filed within one year of the Date of Commercial Production, and the registration application within one year of the loan disbursement date, commercial production, or 1 October 2024 — whichever is later.

Eligible activities are Garments, Apparel & Made-ups, Technical Textiles, Weaving, Knitting, Dyeing & Processing, Texturising, Twisting, Embroidery, and MMF Spinning that converts Polyester Staple Fibre (PSF) or Viscose Staple Fibre (VSF) into yarn. Two activities are deliberately left out: spinning of Cotton and spinning of Synthetic Filament Yarn.

No. This is a credit-linked subsidy, not an investment. It reimburses a portion of the interest you pay on your own term loan, so there is no equity dilution, no board seat and no transfer of ownership. You remain the sole owner of the business.

Both MSME and non-MSME industrial units are covered, but the route for the eligibility certificate differs. MSME units with Gross Fixed Capital Investment up to ₹10 Crore apply to the General Manager of the District Industries Center; MSME units above ₹10 Crore and up to ₹50 Crore apply to the MSME Commissioner; and units that are not MSMEs apply to the Industries Commissioner.

The unit must hold a sanctioned term loan taken for Gross Fixed Capital Investment. For units already under implementation as on 1 October 2024, the loan had to be disbursed on or after 1 January 2024. You must keep repaying installments and interest on schedule, and you must absorb at least 2% of the loan interest yourself.

Applications call for proof of loan sanction and disbursement, evidence of your Date of Commercial Production, EPF registration to substantiate the employee count, and the financial and operational records specified in the prescribed format. This supporting paperwork accompanies the registration application submitted to the Industries Commissioner.

Start by filing the prescribed registration application with the Industries Commissioner, along with supporting documents and within the applicable one-year window, so the unit is formally registered under the policy. The Industries Commissionerate verifies the papers and issues a registration certificate. After commercial production begins, you then apply for a Provisional Eligibility Certificate to the authority that matches your Gross Fixed Capital Investment — the District Industries Center, the MSME Commissioner, or the Industries Commissioner. The detailed policy document is available at https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf.

No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for Gujarat Textile Policy Interest Subsidy: 7% on Loans for Labour Intensive Units, though having it can strengthen your application and unlock other benefits.

Gujarat Textile Policy Interest Subsidy: 7% on Loans for Labour Intensive Units is open to startups at any stage. It is open to startups registered anywhere in India.

Gujarat Textile Policy Interest Subsidy: 7% on Loans for Labour Intensive Units is offered by Industries and Mines Department, Government of Gujarat, a government body. It is provided as non-dilutive funding.

Apply directly through the official application link on this page. Review the eligibility criteria and prepare your startup documents before you begin.