UP Working Capital Interest Subsidy — 5% for Silk Reeling Units

The Working Capital Interest Subsidy sits under the Uttar Pradesh Textile and Garmenting Policy 2022 and is delivered by the Government of Uttar Pradesh. It is a targeted incentive for one specific link in the state's textile chain: units that reel thread from silk cocoons. For these businesses, borrowing to fund day-to-day operations — raw material, wages, running costs — is a constant drain, and this scheme is designed to soften exactly that cost.

The mechanism is straightforward. Instead of a one-time grant, the state bears 5% of the interest a unit pays on its working capital borrowing. The payout is capped at ₹50,000 per annum and continues for five years, so the most a single unit can receive across the policy period is ₹2.5 lakh.

There is a clear local-sourcing condition attached. A unit must draw at least 75% of the thread it produces from koya (silk cocoons) produced within Uttar Pradesh. This links the financial support directly to the state's own sericulture base and is central to the policy's goal of building a self-reliant textile and garmenting ecosystem.

Applications run on a rolling basis — there is no fixed window to chase. Submissions are made through the state's Nivesh Mitra portal at https://niveshmitra.up.gov.in/, or through the designated department, in line with the guidelines published under the policy.

• 5% subsidy on the interest paid on working capital loans
• Capped at ₹50,000 per annum, payable over five years
• Up to ₹2.5 lakh in total benefit per unit
• Open to silk reeling units located in Uttar Pradesh
• At least 75% of thread must come from koya produced in the state
• Rolling applications via the Nivesh Mitra portal

This subsidy is deliberately narrow — it is meant for one category of business within the Uttar Pradesh textile value chain rather than for startups in general.

• Location: the unit must be based in Uttar Pradesh.
• Activity: it must operate as a silk reeling unit, i.e. a business that reels thread from silk cocoons.
• Local sourcing: a minimum of 75% of the thread produced must come from koya (silk cocoons) produced within Uttar Pradesh.

The scheme's stated conditions revolve around location, activity and local koya usage. No separate turnover limit, company-age bar or registration requirement (such as DPIIT or MSME) is set out in the published details. If you are unsure whether your unit clears the 75% sourcing test, it is worth confirming with the implementing department before you file an application.

UP Working Capital Interest Subsidy — 5% for Silk Reeling Units is open to startups at any stage. It is open to startups registered anywhere in India.

UP Working Capital Interest Subsidy — 5% for Silk Reeling Units 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 benefit is a recurring reduction in the cost of borrowing, delivered as an interest subsidy rather than a lump sum.

• 5% interest subsidy on the unit's working capital loan.
• Ceiling of ₹50,000 per annum, so the payout never exceeds that figure in a single year.
• Five years of support, taking the maximum possible benefit to ₹2.5 lakh per unit over the policy period.
• No equity is taken — this is a subsidy, so the promoter's shareholding stays untouched.

By absorbing part of the interest outgo, the scheme frees up cash that a unit can put back into raw material purchases and labour, improves day-to-day cash flow, and makes the business more competitive against units carrying the full interest burden. Over the five-year run, that relief is intended to support the unit's stability and long-term viability within the state's silk and textile industry.

UP Working Capital Interest Subsidy — 5% for Silk Reeling Units is offered by Government of Uttar Pradesh, a government body. As a government-backed subsidy, 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.

There is no competitive shortlisting round here — the process is an administrative one built around verification of eligibility.

1. Application submission. The unit applies through the official portal or the designated Government of Uttar Pradesh department, following the guidelines laid down in the UP Textile and Garmenting Policy 2022.
2. Documentation. The applicant generally furnishes papers covering the silk reeling unit's registration, evidence that production meets the local koya requirement, details of the working capital loan, and supporting financial statements.
3. Verification. The relevant authorities scrutinise the submitted application and documents to confirm the unit qualifies.
4. Disbursement. Once approval is granted, the interest subsidy is released to the applicant.

Before you apply to UP Working Capital Interest Subsidy — 5% for Silk Reeling Units, 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.

UP Working Capital Interest Subsidy — 5% for Silk Reeling Units is best suited for startups in India seeking non-dilutive funding of ₹2.5L. If that describes your startup, review the eligibility criteria above before applying.