Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP MSMEs

The Technology Upgradation Cost Grant is a flagship incentive under MEDP 4.0 — the Micro, Small and Medium Enterprises Development Policy of the Government of Andhra Pradesh. It is administered by the state's Department of Industries & Commerce, and it exists to help existing MSMEs in Andhra Pradesh put money into better machinery, processes and systems.

The support comes as a cash grant equal to 20% of an enterprise's eligible Fixed Capital Investment. How much that is worth depends on the size of the business: ₹20 Lakhs for a Micro enterprise, ₹1 Crore for a Small enterprise and up to ₹5 Crores for a Medium one.

The grant is not handed over in one go. It is released in tranches spread over 2 to 5 years, with the payout schedule tied to the project's milestones. Since the scheme meets only a fifth of the eligible investment, the enterprise is expected to fund the rest itself.

In practice the money is meant for the upgrades that sharpen a manufacturer's edge — new plant, modern production methods, software, or a reworked product line through diversification and modernisation. The state frames this as a way to raise productivity, help local firms meet global standards and create jobs across its MSME base. Applications run on a rolling basis, so there is no closing date to race against.

• Grant of up to ₹5 Crores for Micro, Small and Medium enterprises in Andhra Pradesh
• 20% of eligible Fixed Capital Investment, capped at ₹20 Lakhs (Micro), ₹1 Crore (Small) and ₹5 Crores (Medium)
• Covers technology upgradation, expansion, diversification and modernisation projects
• Paid in tranches over 2 to 5 years, linked to project milestones
• Rolling applications — no closing date
• Apply through the AP Industries portal or your District Industries Centre (DIC)

To qualify, your business has to be a Micro, Small or Medium enterprise as defined by Government of India MSME guidelines and by the MEDP 4.0 policy itself, and it has to be based in Andhra Pradesh.

The project you are seeking support for must fall into one of the qualifying categories — an expansion, a diversification, a modernisation, or a technology upgradation of your existing operations.

• Entity type: Micro, Small and Medium enterprises.
• Location: Andhra Pradesh.
• Project type: Expansion, diversification, modernisation or technology upgradation.
• Classification: The enterprise must meet the MSME definitions set out in Government of India guidelines and MEDP 4.0.
• Documentation: Proof of MSME Udyam registration forms part of the application pack, along with your project proposal, cost estimates and financial statements.

Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP MSMEs is open to startups at any stage. It is open to startups registered anywhere in India.

Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP 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 puts a capital grant behind your upgrade, sized as 20% of the eligible Fixed Capital Investment you commit to the project. The ceiling scales with the size of the enterprise:

• Micro enterprises: up to ₹20 Lakhs
• Small enterprises: up to ₹1 Crore
• Medium enterprises: up to ₹5 Crores

The maximum any applicant can receive is therefore ₹5 Crores. Disbursement happens in tranches over a 2 to 5 year window, with the schedule aligned to the project's progress and milestones rather than paid upfront.

Because the grant covers a fifth of the eligible investment, the remaining 80% is co-financed by the enterprise. The support is directed at costs tied to technology upgradation, expansion or diversification — the kind of spending that improves a business's viability and its ability to compete.

Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP MSMEs is offered by Department of Industries & Commerce, Government of Andhra Pradesh, a government body. As a government-backed grant, it is publicly funded and open to eligible startups across India. You can verify current details and timelines on the provider's official website before applying.

Every application is judged on three things: the strength of the project proposal, whether the enterprise qualifies, and how closely the proposed upgrade lines up with MEDP 4.0's objectives.

A committee made up of officials from the Andhra Pradesh Industries Department and subject experts goes through the paperwork. The panel looks at whether the project makes economic sense, what impact it will have, and it verifies the Fixed Capital Investment the applicant has claimed as eligible.

Shortlisted applicants may be asked to go through additional due diligence, including site visits, before anything is finalised. Once the committee clears a project, a sanction letter is issued and the grant is released in tranches against the approved schedule and the milestones the project has reached.

Before you apply to Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP 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.

Technology Upgradation Cost Grant (MEDP 4.0) — Up to ₹5 Cr for AP MSMEs is best suited for startups in India seeking non-dilutive funding of ₹5Cr. If that describes your startup, review the eligibility criteria above before applying.