Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr)

The Interest Subsidy on Term Loan is one of the sub-schemes that sit inside West Bengal's larger Incentive Scheme for MSMEs in the Powerloom Sector. It is administered by the state's Department of Micro, Small and Medium Enterprises and Textiles, came into force on 1 January 2022, and stays open until 31 December 2024.

The thinking behind the parent scheme is straightforward. Textile MSMEs in the state are being nudged to retire old looms and bring in modern shuttleless powerlooms, because newer machinery means better-quality fabric, less wastage and more jobs. The state's wider ambition is to be counted among India's leading powerloom hubs and to build an ecosystem that lasts.

This particular sub-scheme does not hand out a grant or a fresh loan. Instead, it shares the interest burden a unit carries on a term loan it has already raised from a bank or financial institution — a commercial bank, a cooperative bank, a scheduled bank cleared by the RBI, a Regional Rural Bank, or a financial institution of the central or a state government.

The borrowing must be tied to a project that upgrades powerloom technology and infrastructure, and that project must already have the lender's approval. The unit then receives a yearly subsidy against the interest it has paid, for up to five years.

• Interest subsidy on term loans, paid for 5 years
• Micro & Small units get 55% (Zones A & B) or 70% (Zones C, D & E) of yearly interest
• Medium units get 25% of term loan interest paid, capped at ₹1.75 crore a year
• Only lender-approved projects with a feasibility report qualify
• Open to powerloom MSMEs in West Bengal that began production between 1 January 2022 and 31 December 2024
• Apply offline in Form-A2 to the Directorate of Textiles, Kolkata

Any micro, small or medium enterprise operating in the powerloom sector of West Bengal can apply, as long as the project clears the scheme's conditions.

• The unit must have started commercial production between 1 January 2022 and 31 December 2024 — the same window during which the scheme is valid.
• The project should be backed by a detailed project feasibility report and approved by a central financial institution, a commercial bank or a state financial institution.
• A four-party agreement is required, involving the Directorate of Textiles, the lending financial institution and Tantuja.
• The loan whose interest is being subsidised must come from an eligible lender: a commercial bank, a cooperative bank, an RBI-approved scheduled bank, a Regional Rural Bank, or a central or state-level financial institution.

Eligibility here rests on the unit being an MSME in the powerloom sector with an approved, lender-cleared project — DPIIT startup recognition is not part of the stated criteria.

Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr) is open to startups at any stage. It is open to startups registered anywhere in India.

The most recent application window for Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr) closed on 31 Dec 2024. Many programmes run repeat cohorts, so it is worth checking the official site for the next round.

The subsidy is paid for five years, and the rate depends on the size of the enterprise and the zone it operates in.

• Micro and Small Enterprises in Zone A and Zone B: 55% of the interest payable each year.
• Micro and Small Enterprises in Zone C, D and E: 70% of the interest payable each year.
• Medium Enterprises in Zone B, C, D and E: 25% of the total term loan interest paid, subject to a ceiling of ₹1,75,00,000 per year.

The scheme is listed with a headline support level of up to ₹8.8 crore.

Money is released once a year rather than in a lump sum, and only after the lending institution confirms that the enterprise has kept up its interest payments and has not defaulted during the period.

Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr) is offered by Department of Micro, Small and Medium Enterprises and Textiles, Government of West Bengal, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

Applications land with the Directorate of Textiles, which examines each one against the scheme's conditions. The checks cover the project's feasibility report, the approval granted by the central financial institution, commercial bank or state financial institution, and the four-party agreement.

Once those conditions are met, the interest subsidy is sanctioned. Every annual payout that follows depends on a fresh verification — the enterprise has to show that its interest obligations were discharged on time and without default.

Before you apply to Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr), 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.

Interest Subsidy on Term Loan for Powerloom MSMEs, West Bengal (₹8.8 Cr) is best suited for startups in India seeking non-dilutive funding of ₹8.8Cr. If that describes your startup, review the eligibility criteria above before applying.