Investment Promotion Scheme (IPS) — ₹21L Energy & Water Subsidy for MSMEs

The Department of Industries, UT Administration of Dadra and Nagar Haveli and Daman and Diu runs the Investment Promotion Scheme (IPS) as a package of incentives for the Union Territory's MSME sector. Sitting inside that larger programme is a focused sub-scheme — Assistance For Saving In Consumption Of Energy And Water — meant for units that want to bring down the energy and water they consume in day-to-day operations.

The support is structured as a reimbursement, not a loan and not an equity investment. A manufacturing or service MSME that commissions an energy or water audit, and then installs the equipment its auditor recommends, can claim back a share of both costs. Added together, the ceilings allow for assistance of up to ₹21 lakh per eligible unit.

The economic logic is straightforward: lower power and water consumption means lower running costs, and the scheme shares the upfront spend that a unit must make to get there. Nothing is released on the strength of an application alone — recognised energy and water auditors must certify that the recommended equipment has actually been put in place, so the payout follows verified installation rather than intent.

There is no closing date to work against. Applications are accepted on a rolling basis and are filed through the Union Territory's Single Window Portal.

• A reimbursement subsidy for MSMEs located in Dadra & Nagar Haveli and Daman & Diu
• Total assistance of up to ₹21 lakh per eligible unit
• 75% of energy and water audit costs reimbursed, capped at ₹1,00,000
• 25% of recommended equipment costs reimbursed, capped at ₹20,00,000 as one-time assistance
• Applications accepted on a rolling basis through the UT's Single Window Portal
• Built around sustainability and lower operating costs, released only after auditor certification

Assistance is open to MSME-sector enterprises that fall into either of these groups:

• New manufacturing or service units that have just begun operations.
• Existing manufacturing or service units carrying out expansion or diversification.

On top of that unit profile, the following conditions apply:

• The unit must have commenced commercial production between May 20, 2022 and May 19, 2027.
• The unit must be physically located in the Union Territory of Dadra and Nagar Haveli and Daman and Diu.
• The energy- or water-saving project for which assistance is sought must be implemented and commenced during the scheme's operational period.
• A certificate from recognised energy/water auditors is required, confirming that the equipment has been installed as per their audit report.

Both manufacturing and service enterprises are covered, provided the MSME status, location and commercial production conditions above are satisfied.

Investment Promotion Scheme (IPS) — ₹21L Energy & Water Subsidy for MSMEs is open to startups at any stage. It is open to startups registered anywhere in India.

Investment Promotion Scheme (IPS) — ₹21L Energy & Water Subsidy for MSMEs 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.

The scheme pays out as a reimbursement subsidy — no equity is taken in the business and no amount has to be repaid.

• Energy and water audit costs: 75% of the amount paid to recognised institutions or auditing authorities is reimbursed, subject to a maximum of ₹1,00,000.
• Equipment recommended by the auditor: 25% of the cost is reimbursed, subject to a maximum of ₹20,00,000, extended as a one-time assistance.

The two ceilings operate independently, and together they allow total assistance of up to ₹21 lakh. In practice, the audit — the diagnostic step — is reimbursed heavily, while the equipment purchase that follows is part-funded, which brings down the effective cost of shifting a unit towards lower energy and water consumption.

Investment Promotion Scheme (IPS) — ₹21L Energy & Water Subsidy 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 subsidy, it is publicly funded and open to eligible startups across India.

1. Screening on the Single Window Portal. Every application filed through the UT's portal is examined first for completeness and then checked against the stated eligibility conditions — the location of the unit, its MSME status, and the commercial production window it falls into.
2. Project implementation. The enterprise goes ahead and implements its energy and water saving project.
3. Auditor certification. A certificate is obtained from recognised energy/water auditors. It must confirm that the equipment has been installed and the measures carried out exactly as the audit report recommended.
4. Verification and final approval. The documentation is verified, and the Department of Industries, U.T. Administration gives its final approval once it is satisfied that every condition for the subsidy has been met.

Disbursement of the assistance is contingent on this verification exercise and the approval that follows it.

Before you apply to Investment Promotion Scheme (IPS) — ₹21L Energy & Water Subsidy 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 (IPS) — ₹21L Energy & Water Subsidy for MSMEs is best suited for startups in India seeking non-dilutive funding of ₹21L. If that describes your startup, review the eligibility criteria above before applying.