Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr

The Local Procurement Subsidy is one of the incentives created under the Andhra Pradesh Textile Policy 2024-29. It is run by the Department of Handlooms and Textiles, Government of Andhra Pradesh, and it is aimed squarely at textile businesses that sell overseas but buy close to home.

The mechanism is a reimbursement, not an upfront cheque. A qualifying enterprise that earns the bulk of its revenue from exports — and that pulls the bulk of its input requirement from suppliers inside Andhra Pradesh — can claim back a share of what it exported that year. Claims are made annually, and the support runs for three years.

The policy logic is straightforward: when exporters buy within the state, spending stays in the local textile value chain, the link between finished-goods exporters and the mills, spinners, processors and job workers behind them gets stronger, and that in turn supports employment across Andhra Pradesh.

Because the annual ceilings are tiered by enterprise size, the scheme is deliberately broad — micro units and large manufacturers are both covered, and both new and already-operating businesses can take part.

• Returns 1% of annual export turnover to the enterprise
• Annual ceiling ranges from ₹15 lakh to ₹7 crore depending on enterprise size
• Payable every year across a three-year period
• Built for export-oriented textile enterprises registered in Andhra Pradesh
• Requires at least 60% export share of turnover and 60% local input sourcing

The scheme is open to textile sector enterprises registered in Andhra Pradesh. It covers the full size spectrum: Micro, Small, Medium, Sub-Large and Large units, so a small job-work unit and a large integrated mill are judged on the same two tests.

• Export orientation — at least 60% of annual turnover must come from exports.
• Local sourcing — at least 60% of the enterprise's input requirement must be procured from within Andhra Pradesh.
• Registration — the applicant must be a registered textile sector enterprise in Andhra Pradesh.
• Stage of business — both new enterprises and existing ones qualify.

Both thresholds are annual, which means the export share and the local procurement share need to hold for the year being claimed.

Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr is open to startups at any stage. It is open to startups registered anywhere in India.

Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr 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.

Recipients get back 1% of their annual export turnover as a cash reimbursement. It is not a one-off: the same claim can be made every year for three years.

What that 1% is actually worth depends on the size of the enterprise, because each category has its own annual ceiling:

• Micro enterprises — up to ₹15 lakh per year
• Small enterprises — up to ₹1.5 crore per year
• Medium enterprises — up to ₹7 crore per year
• Sub-Large and Large enterprises — up to ₹2 crore per year

The claim is worked out as 1% of export turnover for the year, subject to the ceiling that applies to your enterprise category. Because the support comes through as a subsidy reimbursement, the state does not take any equity or shareholding in the business in return.

Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr is offered by Department of Handlooms and Textiles, Government of Andhra Pradesh, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

This is a claim-based reimbursement, so the journey is a verification cycle rather than a competitive selection round.

1. Filing the claim — the enterprise submits its claim to the relevant Government of Andhra Pradesh department using the prescribed application form, with supporting papers attached.
2. Departmental review — a designated committee or authority within the Department of Industries takes up the application.
3. Eligibility verification — reviewers check the enterprise's registration and confirm the two thresholds: that exports account for at least 60% of annual turnover, and that at least 60% of inputs came from within Andhra Pradesh.
4. Assessment against policy rules — the claim is measured against the guidelines of the Andhra Pradesh Textile Policy 2024-29 to establish compliance.
5. Approval and disbursement — once the claim clears scrutiny, it is approved and the reimbursement is paid out.

Claims are processed on an annual basis, which matches the yearly nature of the subsidy.

Before you apply to Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr, 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.

Local Procurement Subsidy (AP) — 1% Export Turnover Reimbursement up to ₹7Cr is best suited for startups in India seeking non-dilutive funding of ₹15L – ₹7Cr. If that describes your startup, review the eligibility criteria above before applying.