| Scheme | What you get | Who it suits |
|---|---|---|
| PMEGP | Bank loan + 15–35% subsidy, project up to ₹50 lakh | First-time entrepreneurs, new micro units |
| CGTMSE | Collateral-free loans guaranteed up to ₹10 crore | Micro and small enterprises borrowing from banks |
| PM MUDRA Yojana | Loans up to ₹20 lakh (Shishu, Kishore, Tarun, Tarun Plus) | Micro businesses and small workshops |
| EPCG | Import capital goods at zero customs duty against an export obligation | Units that will export |
| PLI schemes | Cash incentive on incremental sales in 14 sectors | Larger manufacturers meeting investment thresholds |
| Startup India | Recognition, tax benefits, fund-of-funds access | Innovative, scalable startups |
Government schemes for manufacturers in India: PLI, PMEGP, CGTMSE, MUDRA and more
Updated · ImportGap guides
India has schemes for every stage of a manufacturing business: subsidised loans to start, credit guarantees so you don't need collateral, duty-free machinery imports, and production-linked incentives once you scale. Here is how the main ones compare.
At a glance
CGTMSE: loans without collateral
The Credit Guarantee Fund Trust for Micro and Small Enterprises guarantees bank loans so lenders don't ask for collateral or a third-party guarantee. The ceiling was raised from ₹5 crore to ₹10 crore per borrower from April 2025, and the annual guarantee fee was reduced. Ask your bank to cover the loan under CGTMSE.
MUDRA loan categories
| Category | Loan amount |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishore | ₹50,000 to ₹5 lakh |
| Tarun | ₹5 lakh to ₹10 lakh |
| Tarun Plus | ₹10 lakh to ₹20 lakh, for borrowers who have repaid a Tarun loan |
Production Linked Incentive (PLI) schemes
PLI schemes pay a percentage of incremental sales to manufacturers in sectors such as electronics, IT hardware, advanced chemistry cell batteries, pharmaceuticals, medical devices, telecom, textiles, specialty steel, solar modules and food processing. Thresholds are high, so they suit established firms; smaller units often benefit as suppliers to PLI beneficiaries.
Our business pages list the sector-specific schemes for each product, for example lithium-ion batteries.
State schemes
Every state adds its own capital subsidy, interest subvention, stamp-duty and electricity-duty concessions under its industrial policy. Ask the District Industries Centre (DIC) or check your state single-window portal; these often matter as much as the central schemes.
Limits are as published in 2025–26. Schemes are revised often, so confirm on the official site before applying.
Frequently asked questions
Which government scheme is best for starting a small factory?
For a first-time founder, PMEGP is usually the best start because part of the cost is a subsidy. Combine it with a CGTMSE-covered loan and your state's capital subsidy.
Can I get a business loan without collateral in India?
Yes. Banks can cover loans to micro and small enterprises under CGTMSE, up to ₹10 crore, so collateral is not required; MUDRA loans are also collateral-free.
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