Rajasthan Interest Subvention Scheme: 5% Subsidy for Manufacturers

Interest subvention is one of the headline incentives bundled into Rajasthan's Investment Promotion Scheme 2024, and it is delivered through the state's Department of Industries and Commerce. Rather than writing a one-off cheque, the mechanism works on borrowing costs: a manufacturing unit that has raised a term loan to build or expand its plant, machinery or allied equipment gets a slice of the interest it pays back, year after year, across a five-year stretch.

The logic is straightforward. When capital becomes cheaper, projects that once looked marginal start to stack up, and the state pulls fresh investment into its industrial base. Manufacturers can plan plant and equipment purchases with more confidence, and the relief shows up across several financial years instead of in a single instalment.

The policy runs on two tracks. General manufacturing enterprises qualify on one set of terms, while units in the Textile, Garments & Apparel sector are carved out separately, with a ceiling structure that reflects the weight that industry carries in the state.

Support flows against a loan rather than against ownership, so promoters are not asked to give up equity. Approved amounts are released annually or periodically, in line with the scheme's conditions. There is no fixed last date — applications are accepted on a rolling basis.

• 5% interest subvention on term loans for plant & machinery
• Benefit runs for 5 years
• General manufacturing capped at 2.5% of EFCI, spread equally over 5 years
• Textile, Garments & Apparel units capped at 2.5% of EFCI per year
• Lender must be an RBI-recognised bank or financial institution
• Rolling applications — no fixed deadline

The scheme is built for manufacturing enterprises in Rajasthan. To qualify, the unit must have taken a term loan specifically for investment in plant and machinery, equipment or plant-related apparatus.

• The lending institution must be a bank, a financial institution or a state financial institution recognised by the Reserve Bank of India.
• The subvention applies for 5 years.
• The supported investment must form part of the Eligible Fixed Capital Investment (EFCI).
• General manufacturing enterprises face a ceiling of 2.5% of EFCI, spread equally across the five years.
• Enterprises in the Textile, Garments & Apparel sector follow a separate ceiling of 2.5% of EFCI per year.

All manufacturing enterprises in the state are covered, with the textile, garments and apparel industry enjoying distinct, more favourable provisions.

Rajasthan Interest Subvention Scheme: 5% Subsidy for Manufacturers is open to startups at any stage. It is open to startups registered anywhere in India.

Rajasthan Interest Subvention Scheme: 5% Subsidy for Manufacturers 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.

A qualifying manufacturing enterprise receives a 5% interest subvention on its term loan, calculated on the borrowings used for plant and machinery, equipment or plant-related apparatus. The support runs for 5 years.

• General manufacturing enterprises: the overall benefit is capped at 2.5% of the Eligible Fixed Capital Investment (EFCI), released in equal parts over the five-year window.
• Textile, Garments & Apparel units: the same 5% interest subvention for 5 years applies, but the ceiling works out to 2.5% of EFCI per year.

By trimming what a unit pays its lender, the scheme brings down the total cost of capital on capital-intensive projects and improves the economics of setting up or expanding capacity in Rajasthan. The benefit is a subsidy on interest and is non-dilutive — no equity or ownership stake is taken in the enterprise.

Rajasthan Interest Subvention Scheme: 5% Subsidy for Manufacturers is offered by Department of Industries and Commerce, Government of Rajasthan, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

• Application review: the concerned state department examines the submission received.
• Eligibility verification: officials confirm that the applicant is a manufacturing enterprise and satisfies the conditions laid down under the Rajasthan Investment Promotion Scheme 2024.
• Loan scrutiny: the nature and amount of the term loan are checked, along with the particulars of the investment made in plant and machinery.
• Documentation check: the papers filed with the application are scrutinised for compliance with the scheme's guidelines.
• Lender confirmation: the financial institution involved may be consulted to verify the loan details.
• Approval and disbursal: final approval follows once every stipulated condition is met and funds are available under the scheme. Approved amounts are then released annually or periodically as per the scheme's terms.

Before you apply to Rajasthan Interest Subvention Scheme: 5% Subsidy for Manufacturers, 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.