Gujarat Announces Comprehensive MSME Assistance Scheme Under Industrial Policy 2026

Gandhinagar, October 9, 2026: The Gujarat government has introduced a comprehensive assistance scheme for micro, small and medium enterprises (MSMEs) under the Viksit Gujarat Industrial Policy-2026, offering incentives for capital investment, interest payments, electricity consumption, employment generation, technology adoption, artificial intelligence (AI) and quality certification.

Announced by the Industries and Mines Department under the leadership of Chief Minister Bhupendra Patel and Deputy Chief Minister Harsh Sanghavi, the scheme came into effect on June 1, 2026, and will remain operational until May 31, 2031.

The scheme provides multiple assistance components, allowing eligible MSMEs to avail one or more incentives subject to prescribed conditions and limits. It also offers enhanced benefits to identified thrust sectors, including sports equipment, toys, footwear, robots and drones.

Capital, interest and electricity assistance

Under the scheme, the maximum combined assistance for eligible MSMEs will be capped at 45% of eligible fixed capital investment (EFCI) in Category-A talukas and 35% in Category-B talukas. For identified thrust sectors, these limits rise to 50% and 45%, respectively.

Eligible enterprises can receive capital assistance of up to 35% of EFCI in Category-A areas and 25% in Category-B areas, subject to different disbursement periods for micro enterprises and small and medium enterprises.

The scheme also provides interest assistance of 7% on term loans for five years and electricity tariff assistance of up to ₹2 per unit in Category-A areas and ₹1 per unit in Category-B areas for five years.

Women entrepreneurs, manufacturing startups and first-generation entrepreneurs will be eligible for an additional 1% interest assistance within the prescribed limits. Micro enterprises will also receive higher annual incentive limits during their initial years of operation.

EPF reimbursement to support employment

Industries generating new employment can claim reimbursement of up to 100% of the employer’s Employees’ Provident Fund (EPF) contribution for eligible new employees for five years.

The monthly assistance limit will be the lower of 12% of the employee’s basic salary, dearness allowance and retaining allowance, or ₹1,800 for male employees, ₹2,500 for female employees and ₹3,000 for employees with disabilities.

Additional employment created through expansion or diversification will also qualify, subject to the scheme’s conditions.

Support for quality certification and digital technology

To improve product quality and operational efficiency, the scheme provides assistance of up to 65% of capital expenditure on enterprise resource planning (ERP) systems, capped at ₹1 lakh.

For national and international quality certification, eligible enterprises can receive assistance of up to 50% of certification fees and the cost of required testing equipment and machinery, subject to a combined maximum of ₹10 lakh. Assistance is also available for Zero Defect, Zero Effect (ZED) certification.

For digitalisation and Industry 4.0 adoption, MSMEs can receive up to 65% of eligible capital expenditure on information and communication technology facilities, capped at ₹5 lakh.

Technology acquisition from recognised institutions will qualify for assistance of up to 65% of the eligible expenditure, capped at ₹50 lakh for general MSMEs and ₹1 crore for enterprises in identified thrust sectors.

Incentives for patents, intellectual property and AI

The scheme provides patent registration assistance of up to 75% of eligible expenditure, capped at ₹25 lakh per applicant or enterprise. In identified thrust sectors, assistance of up to 75% of eligible expenditure, capped at ₹1 crore, is available for intellectual property rights covering patents, designs, copyrights, trademarks and geographical indications.

Micro enterprises and artisans in identified thrust sectors can receive assistance covering up to 80% of AI subscription fees, capped at ₹1 lakh annually for three years.

Energy and water conservation

MSMEs undertaking energy or water audits can receive assistance of up to 75% of the audit cost, capped at ₹50,000 for each category.

A further one-time incentive of up to 25% of the cost of equipment recommended by the auditor, capped at ₹20 lakh, is available for implementing conservation measures. Enterprises must achieve at least 10% savings in energy or water consumption compared with their average monthly consumption during the preceding 12 months.

Assistance for fundraising and collateral-free loans

MSMEs raising equity capital through an SME Exchange under Securities and Exchange Board of India (SEBI) guidelines can receive one-time assistance of up to 25% of eligible fundraising expenditure, capped at ₹5 lakh.

The scheme also provides for reimbursement of up to 100% of the annual service fee paid under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for eligible collateral-free term loans for five years.

Eligible MSMEs located outside Gujarat Industrial Development Corporation (GIDC) estates or approved industrial parks can receive assistance of up to 35% of distribution licensee charges for a new electricity connection, additional load or alteration of a connection or service line, capped at ₹5 lakh.

For manufacturing units operating from rented or leased industrial sheds, assistance will cover up to 65% of rent paid. Enterprises with 100% women ownership will be eligible for assistance of up to 75%, subject to a maximum of ₹3 lakh annually for five years.

Enhanced package for thrust sectors

Identified thrust sectors will receive additional incentives, including 100% reimbursement of stamp duty and registration charges paid on the purchase or lease of land.

Other benefits include assistance of up to 75% for intellectual property rights, up to 65% for technology acquisition, and 100% reimbursement of international certification fees, subject to a maximum of ₹5 crore.

Eligible enterprises can also receive employee training assistance of up to ₹8,000 per employee per month during the first 12 months. Assistance of up to 50% of the cost, capped at ₹5 crore, is available for establishing a Creative Design Studio in identified thrust sectors.

Local employment requirements

Industries availing benefits under the scheme must ensure that at least 85% of their total workforce comprises residents of Gujarat. At least 60% of employees at managerial and supervisory levels must also be residents of the state.

The provision links industrial incentives with employment opportunities for local residents.

Investments from January 2026 to be considered

Eligible asset purchases and payments made from January 1, 2026, will be considered under the scheme, subject to the prescribed conditions.

The eligible investment period will be 12 months from the Date of Commercial Production (DoCP) for plant and machinery investments of up to ₹50 crore. For investments exceeding ₹50 crore and up to ₹125 crore, the period will be 18 months.

The scheme seeks to support MSMEs across investment, employment, technology, quality improvement and market expansion, with enhanced incentives for selected manufacturing sectors and provisions for greater participation by women entrepreneurs, startups and first-generation business owners.