Government Schemes & Grants for Business in India
From a ₹20 lakh startup seed grant to a ₹10 crore collateral-free MSME loan guarantee, the Indian government runs dozens of funding, subsidy and tax schemes for businesses — most of them under-claimed simply because they're scattered across a dozen ministry websites. Here's every major one relevant to a startup, MSME, exporter, manufacturer or IT company, in one place, with the actual numbers and where to apply.
Check What You Qualify ForStartups & Innovation
Startup India, DPIIT Recognition & Related Support
Available to a private limited company, LLP or registered partnership under 10 years old with turnover under ₹100 crore, once DPIIT-recognised.
Section 80-IAC Tax Exemption
A full income tax holiday for any 3 consecutive years within the startup's first 10 years.
- Offers
- 100% tax exemption on profits for 3 of the first 10 years.
- Eligibility
- DPIIT-recognised startup, approval required from the Inter-Ministerial Board.
- Window
- Incorporation deadline for eligibility extended to 1 April 2030 (Budget 2025-26).
Startup India Seed Fund Scheme (SISFS)
Early-stage grant and debt funding routed through DPIIT-empanelled incubators.
- Offers
- Up to ₹20 lakh grant for validation/prototype development, plus up to ₹50 lakh debt/convertible debentures for market entry.
- Eligibility
- DPIIT-recognised startup, incorporated under 2 years, not received more than ₹10 lakh from any other government scheme.
- How to apply
- Through an empanelled incubator — not a direct government application.
Fund of Funds for Startups (FFS)
A ₹10,000 crore corpus that invests in SEBI-registered AIFs, which in turn invest in startups — not a direct-to-startup grant.
- Offers
- Indirect equity funding, channelled through venture capital and alternative investment funds.
- Eligibility
- DPIIT-recognised startups the participating AIF chooses to invest in.
- Managed by
- SIDBI, on behalf of the Department for Promotion of Industry and Internal Trade (DPIIT).
Self-Certification & Patent Rebate
Reduced compliance burden and cheaper IP protection for recognised startups.
- Offers
- Self-certification under 6 labour and 3 environmental laws (no routine inspection); 80% rebate on patent filing fees plus fast-track examination.
- Eligibility
- DPIIT-recognised startup.
- Also
- Angel tax (Section 56(2)(viib)) abolished for all companies from 1 April 2025 — no longer a startup-specific relief, but relevant to every private company raising equity.
MSME & Small Business
Credit Guarantees, Subsidies & Loan Schemes
The core financing schemes almost every registered MSME can draw on — Udyam Registration is the free, five-minute prerequisite for most of these.
CGTMSE — Credit Guarantee Fund Trust for MSEs
Government guarantee that lets banks lend to MSMEs without collateral or a third-party guarantor.
- Offers
- Collateral-free loans up to ₹10 crore, with 75–85% of the loan amount guaranteed by the trust; annual guarantee fee from about 0.37%.
- Eligibility
- New or existing Udyam-registered micro and small enterprises, through a participating bank/NBFC.
PMEGP — Prime Minister's Employment Generation Programme
Margin-money subsidy for setting up a brand-new micro enterprise.
- Offers
- 15–35% margin-money subsidy (higher for special-category applicants and rural projects); project cost up to ₹50 lakh (manufacturing) or ₹20 lakh (service).
- Eligibility
- Individuals 18+, new units only (not expansion of an existing one), routed through KVIC/KVIB/DIC.
MUDRA (Pradhan Mantri Mudra Yojana)
Collateral-free loans for micro and small businesses, in four tiers by loan size.
- Offers
- Shishu: up to ₹50,000. Kishor: ₹50,000–5 lakh. Tarun: ₹5–10 lakh. Tarun Plus: ₹10–20 lakh (for those who've repaid a prior Tarun loan).
- Eligibility
- Any non-farm micro/small enterprise, through any bank, NBFC or MFI.
Stand-Up India
Bank loans specifically for setting up a new (greenfield) enterprise.
- Offers
- ₹10 lakh to ₹1 crore per loan, repayable over 7 years with up to an 18-month moratorium.
- Eligibility
- At least one SC/ST or woman promoter holding 51%+ shareholding/controlling stake, for manufacturing, services or trading.
CLCSS — Credit Linked Capital Subsidy Scheme
Upfront subsidy for buying newer plant and machinery via a bank loan.
- Offers
- 15% upfront capital subsidy, capped at ₹15 lakh, on loans up to ₹1 crore; SC/ST-owned units get 25% under SCLCSS, capped at ₹25 lakh.
- Eligibility
- Micro and small enterprises upgrading to approved technology across 50+ eligible sub-sectors; a term loan is mandatory.
Exports & Manufacturing
Export Incentives & Production-Linked Support
Most relevant once a business is manufacturing at scale or actively exporting — eligibility and paperwork are heavier than the MSME schemes above.
RoDTEP — Remission of Duties and Taxes on Exported Products
Refunds embedded taxes/duties on exports that aren't otherwise credited or refunded.
- Offers
- Roughly 0.3%–4.3% of FOB export value, rate set per 8-digit HS code, with per-unit value caps. Current rates extended to 30 September 2026 by DGFT notification.
- Eligibility
- Any exporter of goods, claimed electronically at the time of shipping bill filing.
Interest Equalisation Scheme
Lowers the interest rate on pre- and post-shipment rupee export credit.
- Offers
- 3% interest equalisation for MSME manufacturer-exporters (any HS line); 2% for other manufacturer/merchant exporters on specified HS lines.
- Eligibility
- Exporters with pre/post-shipment rupee export credit from an eligible bank.
EPCG — Export Promotion Capital Goods Scheme
Import capital goods at zero customs duty against a future export commitment.
- Offers
- Zero-duty import of capital goods for pre-production, production and post-production, against an export obligation typically 6x the duty saved, over 6 years.
- Eligibility
- Manufacturer exporters and merchant exporters tied to a supporting manufacturer.
PLI — Production Linked Incentive
Cash incentive tied to incremental sales of Indian-manufactured goods, across 14 sectors.
- Offers
- 4%–18% of incremental sales over a FY2019-20 base, for 4–5 years depending on sector; ₹1.97 lakh crore total outlay across all sectors. IT Hardware PLI (laptops, tablets, servers) offers roughly 1–4% for 4 years.
- Eligibility
- Large-scale manufacturers meeting sector-specific investment and production thresholds — not aimed at small/early-stage businesses.
Common Questions
Government Schemes for Business — FAQ
Which government scheme should a new small business apply for first?
Udyam Registration first — it is free, takes minutes, and is the eligibility gateway for almost every other MSME scheme on this page, including CGTMSE, PMEGP, and CLCSS. A DPIIT Startup India certificate serves the same gateway role for an innovation-driven company under 10 years old.
Can I get a business loan without collateral in India?
Yes. CGTMSE guarantees collateral-free MSME loans up to ₹10 crore (75–85% covered by the government), MUDRA covers loans up to ₹20 lakh for micro and small units, and Stand-Up India covers ₹10 lakh to ₹1 crore specifically for SC/ST and women entrepreneurs setting up a new (greenfield) enterprise.
Is the angel tax on startup investments still applicable?
No — Section 56(2)(viib), the "angel tax" provision, was abolished by the Finance Act 2024 with effect from 1 April 2025, for all companies, not just DPIIT-recognised startups.
What funding can a DPIIT-recognised startup actually access?
A 3-year income tax holiday within the first 10 years (Section 80-IAC, on approval by the Inter-Ministerial Board), a seed grant of up to ₹20 lakh plus debt funding up to ₹50 lakh through the Startup India Seed Fund Scheme (via empanelled incubators), an 80% rebate on patent filing fees, and self-certification compliance under several labour and environmental laws.
Are there government incentives specifically for IT or export businesses?
Exporters can claim RoDTEP (a rebate of roughly 0.3%–4.3% of FOB value, varying by product HS code) and interest equalisation on pre/post-shipment export credit. IT hardware manufacturers (laptops, tablets, servers) can apply for the PLI scheme for IT Hardware. Pure software/IT-services exporters don't have a dedicated national tax holiday any more (the old STPI-linked exemption expired), though STPI still provides registration, infrastructure and single-window support.
Sources & How to Verify These
Every figure above links to the actual administering ministry, department or nodal agency's portal above — start there for the current application window and full eligibility fine print. Loan/subsidy amounts, interest rates and tax provisions are set by government notification and are revised periodically (several changed as recently as the 2024 and 2025-26 Union Budgets), so treat the numbers here as a starting reference, not a substitute for checking the live scheme guidelines before you apply.
This page is for general guidance, not legal or investment advice. Khata World helps clients identify which of these schemes they qualify for and prepare the application — we are not the administering agency for any scheme listed here.
Not Sure Which Scheme Applies to You?
Tell us about your business and stage, and we'll tell you exactly which of these schemes you're eligible for and help you apply.
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