Subsidy Eligibility
Subsidy eligibility criteria — what determines your incentive package
You can avail industrial subsidies and incentives from both the
Government of India and respective State Governments when setting up a new manufacturing unit or
expanding an existing one. Eligibility and quantum depend on seven key factors — here's how
each one works.
Seven factors that determine your eligibility
1
Industrial category & governing ministry
The products you manufacture determine which ministry governs your
eligibility, and each ministry runs its own incentive schemes.
Example: Defence & Aerospace products fall under
the Ministry of Defence, qualifying for the Make in India R&D grant scheme, capped at a project
cost of ₹50 crore. Pharmaceutical products fall under the Ministry of Pharmaceuticals, which
offers a capital subsidy of 10% (capped at ₹10 crore project cost) for upgrading facilities to
WHO GMP compliance.
2
Location of your manufacturing unit
Every state classifies locations into Zones A, B, C and D —
from highly developed urban areas to underdeveloped regions — and incentives scale up as
development level goes down.
Example: Maharashtra offers up to 100% capital subsidy
for food processing units in Zone D/D+, compared to just 5% in Zone A.
3
Priority sector status
Products on the Central and State priority sector lists —
currently including semiconductors, electric vehicles, defence technologies, electronics and
mobile phones — access research grants, capital subsidy and Production Linked Incentives (PLI).
Example: Samsung India received its first PLI tranche
for manufacturing mobile phones in India, worth approximately ₹500–600 crore.
4
Quantum of investment
Projects are classified as Large, Mega or Ultra Mega based on
investment size, with thresholds set independently by each state government.
Example: Rajasthan classifies any investment above
₹50 crore as a large project; negotiating a special incentive package requires investment above
₹500 crore.
5
Employment generation
Every government weighs the quantum of jobs created as a parameter
in determining your subsidy and incentive quantum.
Example: Haryana provides an additional incentive
"booster" for manufacturing units that generate jobs above a prescribed threshold.
6
Environmental impact & carbon credits
Carbon-positive projects can register with verifiers like Gold
Standard or Verra and trade credits domestically, supporting India's carbon net-zero target.
Note: Under current Government of India norms, no
entity may export or sell carbon credits outside India to meet its own targets — the India
Carbon Market (ICM) has been notified to create a domestic buying and selling market.
7
Import substitution & Make in India alignment
Products that substitute imports and advance Make in India access
priority-sector schemes including PLI and sector-specific incentives.
Example: The Ministry of Electronics & Information
Technology (MEITY) offers specific support for semiconductor design, development and manufacturing
in India.
These seven factors interact — a project can qualify across multiple
categories at once, and the right combination often determines whether you secure a standard subsidy
or a custom-negotiated package.
Not sure which factors apply to your project?
Book a consultation — we will assess your eligibility and calculate your exact subsidy benefit