Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat
A Gujarat government subsidy that gives handloom cooperatives, NGOs and development centres a 15% rebate on yarn bought from NHDC-recognised depots, plus freight reimbursement of 1–8.5%.
- Funding amount
- Varies by program
- Funding type
- Subsidy
- Provider
- Cottage and Rural Industries Department, Government of Gujarat (Government)
- Application deadline
- Rolling
- Eligible stage
- Any stage
- Location
- Open to startups registered in India
Overview
The Mill Gate Price Subsidy Scheme is a Gujarat government subsidy that brings down what handloom weavers pay for their raw yarn. It was launched in 2007 and is run by the state's Cottage and Rural Industries Department, with the Commissioner of Cottage and Rural Industries, Industries & Mines Department, handling implementation. District Industries Centres (DICs) act as the delivery points across Gujarat.
The scheme attacks two separate cost heads. The first is the mill-gate price of the yarn itself — applicants who buy from National Handloom Development Corporation (NHDC)-recognised depots can claim a 15% subsidy on that purchase. The second is logistics: freight charges are reimbursed at rates from 1% to 8.5%, with the exact figure depending on the yarn type and the region the yarn moves through.
There is a social purpose behind the arithmetic as well. By making quality yarn affordable, the scheme is designed to keep economically weak weavers in work — Scheduled Caste weavers in particular — and to sustain rural employment in communities that depend on handloom production. Better and cheaper inputs also raise the quality of the finished cloth, which helps the state's traditional weaving craft and skills stay commercially viable.
Highlights
- 15% subsidy on yarn purchased from NHDC-recognised depots
- Freight reimbursement ranging from 1% to 8.5%, based on yarn type and region
- An additional 2.5% to cover depot operating charges
- Open to handloom cooperative societies, NGOs and development centres
- Subsidy credited directly via RTGS/e-payment; no equity taken
- Running since 2007 and administered through District Industries Centres (DICs)
Who can apply
The scheme is written for organisations rather than for individual weavers. The beneficiaries named in the guidelines are:
- Handloom cooperative societies
- NGOs operating in the handloom space
- Development centres
A second condition is just as important as the entity type. Yarn must be purchased from a depot recognised by the National Handloom Development Corporation (NHDC) — the Gujarat State Handloom & Handicrafts Development Corporation is one such depot. Yarn bought outside that recognised network does not qualify for the subsidy.
This is a state scheme for Gujarat, and applications are routed through the District Industries Centre (DIC) of the applicant's own district.
Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat 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
Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat 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.
What the funding covers
Support is delivered through two separate components, both aimed at lowering the cost of getting yarn to the loom.
- 15% subsidy on yarn purchase: A flat 15% is allowed on yarn bought from NHDC-recognised depots. The money reaches the beneficiary directly through RTGS or e-payment once the paperwork is verified.
- Freight reimbursement of 1% to 8.5%: The reimbursement rate is not uniform. It is set according to the category of yarn (Non-Silk/Jute, Silk, and Jute/Jute Blended) and the region from which the yarn is procured (Plain Area, Hills/Remote, or North-East). Rates across these combinations fall between 1% and 8.5% of freight cost.
- Extra 2.5% for depot operating charges: On top of the freight reimbursement, a further 2.5% is provided to cover depot operating charges, so the logistics side of procurement is supported rather than left to the applicant.
Because the amount depends on yarn type, region and volumes purchased, the overall value of the benefit varies from one applicant to another. There is no equity dilution and nothing to repay — these are subsidies credited against actual purchases.
About the provider
Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat is offered by Cottage and Rural Industries Department, Government of Gujarat, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.
How to apply
Applications are submitted on the . Confirm the current deadline and document checklist there before you start.
Selection process
There is no competitive shortlisting here. Assessment is an administrative compliance check carried out at the District Industries Centre (DIC) level.
- Submission: The filled application, along with proof of yarn purchase and supporting documents, is handed in at the DIC.
- Scrutiny: Designated DIC staff examine the form and the attachments to confirm eligibility — chiefly the applicant's entity type and evidence that the yarn was bought from an NHDC-recognised depot.
- Cross-verification: The application is checked against the scheme guidelines to make sure every condition is met.
- Disbursal: Once verification is complete, the 15% yarn purchase subsidy is processed for direct credit through RTGS or e-payment. Freight reimbursement is handled as a separate component.
Since the evaluation is a verification exercise rather than a ranking, clearance depends on documents being complete and compliant.
Documents you’ll need
Before you apply to Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat, 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.
Frequently asked questions
How much financial support does the Mill Gate Price Subsidy Scheme offer?
There are two components. You get a 15% subsidy on the value of yarn purchased from NHDC-recognised depots, and separately a freight reimbursement that ranges from 1% to 8.5% depending on the type of yarn and the region. An extra 2.5% is also allowed towards depot operating charges. Because the rates depend on what you buy and where from, the final amount varies by applicant.
Who is eligible to apply for this scheme?
Handloom cooperative societies, NGOs, and development centres are the eligible applicants. Along with the entity type, there is a purchase condition: the yarn must be bought from a depot recognised by the National Handloom Development Corporation (NHDC), such as the Gujarat State Handloom & Handicrafts Development Corporation.
Does the scheme take equity in my organisation or require repayment?
No. This is a subsidy, not an investment. The 15% yarn subsidy is credited straight to the beneficiary's account through RTGS or e-payment, and the freight reimbursement is settled separately. There is no equity stake taken and nothing to repay.
Do I need DPIIT recognition or MSME registration to apply?
The eligibility conditions specified for this scheme relate to the type of applicant organisation and to buying yarn from NHDC-recognised depots. Neither DPIIT recognition nor MSME registration is listed as a requirement, so registrations of that kind are not what the District Industries Centre verifies against the guidelines.
How is the 15% yarn subsidy paid out?
After the District Industries Centre verifies your application and the proof of yarn purchase, the subsidy amount is processed for direct credit to your account via RTGS or e-payment. The freight reimbursement is processed as a separate component.
Are freight reimbursement rates the same for everyone?
No. The rate varies with the category of yarn — Non-Silk/Jute, Silk, and Jute/Jute Blended — and with the region of procurement, which may be a Plain Area, a Hills/Remote area, or the North-East. Across these combinations the reimbursement works out to between 1% and 8.5%.
Where do I get the application form and how do I apply?
Start by purchasing your yarn from an NHDC-recognised depot. Then visit the District Industries Centre in your district and ask the designated staff member for the prescribed hard-copy application form, which is not normally available online. Fill in all mandatory fields, attach the supporting documents, submit the signed form at the DIC, and collect an acknowledgement receipt as proof of submission.
What documents are needed along with the application?
You will need proof of the yarn purchase, the registration documents of the cooperative or NGO, and other relevant identification or operational proofs. Self-attested copies are required where applicable, and all mandatory fields on the form must be completed.
Is there a last date to apply?
The scheme runs on a rolling basis, so there is no fixed published last date. However, the DIC may communicate a prescribed period for submission, so it is best to confirm the current timeline with your District Industries Centre when you collect the form.
Which weavers is the scheme meant to help?
The scheme is aimed at sustaining employment for economically weak weavers in Gujarat, with a specific focus on weavers from Scheduled Castes. It works by making quality yarn affordable, which also improves the quality of the finished handloom products.
Who offers Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat?
Mill Gate Price Subsidy Scheme — 15% Yarn Subsidy, Gujarat is offered by Cottage and Rural Industries Department, Government of Gujarat, a government body. It is provided as non-dilutive funding.
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