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Business & Entrepreneurship

Investment Promotion Scheme (IPS) For Cottage Industries: Financial Assistance To Cottage Industries

“Financial Assistance To Cottage Industries'' under the “Investment Promotion Scheme (IPS)”, implemented by the Dept. of Industries, U.T. Administration Of DNH & DD, aims to provide financial assistance to Cottage Industries on the term loan taken through banks.

Authority

State/ UT

Region

Dadra & Nagar Haveli and Daman & Diu

Status

Verified 2026

Updated

March 2026

What you get

- Rate of Capital Subsidy: 25% of the term loan amount for setting up of the Cottage Industry up to a maximum of ₹5,00,000/-. | - Rate of Interest Subsidy: 50% of the Interest charged by Bank or NBFC or Cooperative Bank shall be reimbursed up to a period of 5 years from the date of commencement of Production. | Note: | - 10% additional capital subsidy shall be provided to Scheduled Castes/ Scheduled Tribes / Women/ Differently abled having 30% or more disability. | - Maximum limit of the Bank Loan should be ₹20,00,000/-.

Who can apply

The applicant should be associated with Cottage Industry.; The applicant should be above 18 years of age.; The applicant should have passed minimum standard Four (IV).; The applicant should have undergone training for minimum one month from Government of India recognized Institutes, in the area of the proposed business.

Required Paperwork

  • Aadhaar Card
  • PAN Card
  • Income Certificate
  • Residence Proof (Domicile)

Common Questions

Is there any additional subsidy for specific groups?

Yes, an additional 10% subsidy is provided to Scheduled Castes, Scheduled Tribes, Women, and Differently abled individuals with 30% or more disability.

What is the rate of capital subsidy?

Beneficiaries can avail a maximum subsidy of 25% of the term loan amount for setting up the Cottage Industry, up to a maximum of [?]5,00,000/-.

Is there any age limit for the applicant?

Yes, the applicant must be above 18 years of age.

What is the definition of Cottage Industry?

Cottage industry is a business or manufacturing activity carried on in people's homes at very low scales as a small-scale, unorganized/ decentralized manufacturing business using simple hand-operated tools. Examples include Smithy, Carpentry, weaving, Pottery, Blanket making, Stone Carving, Textiles, Ceramics, Handmade Jewelry, etc.

What does the scheme provide?

The scheme provides financial assistance to Cottage Industries through term loans taken from Nationalized Banks, Cooperative Banks, Public Sector Banks, or Private Banks.

What is the maximum limit for the bank loan?

The maximum limit for the bank loan is [?]20,00,000/-.

What is the rate of capital subsidy?

Beneficiaries can avail a maximum subsidy of 25% of the term loan amount for setting up the Cottage Industry, up to a maximum of [?]5,00,000/-.

What measures are in place to prevent misuse of the subsidy scheme?

Strict guidelines, documentation requirements, and verification procedures are in place to ensure that subsidies are availed by eligible enterprises for genuine purposes only.

What is the operative period of the scheme?

The operative period of scheme is from 20.05.2022 till 5 years that is 19.05.2027.

If an enterprise is established in 2023 and becomes eligible for the scheme what would be the time period in which benefits are applicable?

The enterprise can avail benefit commencing from date of production till 5 years even if that period falls beyond operative period.

How can an eligible unit apply to get the benefits of the scheme?

The eligible unit can apply by visiting single window portal website which is "swp.dddgov.in", and once page pops-up the user have to go to departments tab and select district industries tab under which the user have to click on apply for investment promotion scheme: 2022 to 2027.