IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu

Cottage industry owners in Dadra & Nagar Haveli and Daman & Diu can get the UT administration to bear a share of the cost of the bank term loan they raise for their unit. That is what the Financial Assistance to Cottage Industries sub-scheme does, and it sits inside the wider Investment Promotion Scheme (IPS) run by the Department of Industries, U.T. Administration of Dadra & Nagar Haveli and Daman & Diu.

IPS was first brought in on 3 July 2015 with a five-year term and has been extended since. Its present run stays valid till 19 May 2027, and applications are being taken under the window labelled Investment Promotion Scheme 2022 to 2027, which spans 20 May 2022 to 19 May 2027.

The parent scheme's ambitions go beyond a single subsidy. It is meant to give the MSME sector incentives and support so that units can hold their own against market swings and grow into a vibrant economy, to turn the Union Territory into a specialised hub for MSMEs, to draw more women into business, to bring down local joblessness and to encourage employers to hire resident workers.

Under this sub-scheme the support is pointed at term loans. Borrowings from nationalised banks, cooperative banks, public sector banks and private banks are all covered, and the help arrives in two parts — a capital subsidy on the loan and a reimbursement of a portion of the interest the lender charges.

• Capital subsidy of 25% on a term loan, capped at ₹5,00,000
• 50% interest subsidy reimbursed for up to 5 years from start of production
• Extra 10% capital subsidy for SC/ST applicants, women and persons with 30%+ disability
• Subsidies apply to term loans of up to ₹20,00,000
• Covers loans from nationalised, cooperative, public sector and private banks
• Open to cottage industries until 19 May 2027 in Dadra & Nagar Haveli and Daman & Diu

The scheme is limited to cottage industry units, and the person applying has to clear a few personal conditions.

• The applicant must be associated with a cottage industry.
• The applicant must be above 18 years of age.
• The applicant must have completed at least standard IV.
• The applicant must satisfy any one of three routes on skill: training of at least one month in the proposed line of business from an institute recognised by the Government of India, or at least 1 year of experience in that same activity, or status as a hereditary craftsperson.

No DPIIT or MSME registration requirement is stated for this sub-scheme in the scheme notification.

IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu is open to startups at any stage. It is open to startups registered anywhere in India.

Applications for IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu are open and the current deadline is 19 May 2027. Deadlines can change — always reconfirm on the official source before submitting.

The assistance is built around a term loan that the unit raises from a lender, and it comes in two components.

• Capital subsidy: 25% of the term loan, subject to a ceiling of ₹5,00,000. This is meant for setting up new units.
• Additional capital subsidy: a further 10% for applicants who are from the Scheduled Castes or Scheduled Tribes, are women, or are differently-abled with a disability of 30% or more. For them the total capital subsidy works out to 35%.
• Interest subsidy: 50% of the interest charged by the bank or NBFC is reimbursed, for up to 5 years counted from the date production commences.
• Loan ceiling: the term loan that can carry these benefits is capped at ₹20,00,000.

The loans may be taken from nationalised banks, cooperative banks, public sector banks or private banks.

IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu 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.

There is no separate competitive shortlisting round described for this sub-scheme. What decides the outcome is whether you meet the eligibility conditions and file a complete application.

Applications go in online and are examined by the District Industries Centre, DNH & D&D. The Centre checks the application against the stated eligibility requirements and looks at whether the attached documents are complete. Applications that clear that review move ahead to sanction, after which the capital subsidy and the interest subsidy are disbursed.

The online route runs as follows:

• Create an account on the registration page at https://swp.dddgov.in/registration and submit the form.
• Open the verification link mailed to you (check the spam folder if you do not see it).
• Confirm your mobile number by entering 111111 as the OTP. Your mobile number and PIN are then sent to your registered email address.
• Log in at https://swp.dddgov.in/login using that mobile number and PIN.
• In the left-side menu, open Departments & Services, scroll down to District Industries Centre DD & DNH and select the Investment Promotion Scheme : 2022 to 2027 (20 May 2022 to 19 May 2027) application.
• Fill in the Common Application Form, upload the mandatory documents, verify every entry and click Submit to finish.

Before you apply to IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu, 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.

IPS Cottage Industry Subsidy — Up to ₹5 Lakh in DNH & Daman and Diu is best suited for startups in India seeking non-dilutive funding of ₹5L. If that describes your startup, review the eligibility criteria above before applying.