Industrial Subsidy for Agriculture & Agri-Tech Startups and MSMEs

India’s agriculture sector is not only the backbone of the economy but also the breeding ground for innovation through Agri-Tech startups. To strengthen this ecosystem, both Central and State Governments(Check Schemes) offer various industrial subsidies for Agriculture & Agri-Tech industries. These subsidies encourage new entrepreneurs to set up processing units, adopt modern technologies, and promote exports.

If you’re planning to start an agri-tech business, understanding these schemes can help you reduce setup costs, increase productivity, and access new markets.

What is an Industrial Subsidy?

An industrial subsidy is a form of financial assistance or incentive provided by the government to industries or startups to promote economic growth. For the Agriculture & Agri-Tech industry, these subsidies often include:

• Capital Subsidy: Assistance on machinery, equipment, or infrastructure setup.
• Interest Subsidy: Reduced interest rates on business loans.
• Export Subsidy: Incentives for companies exporting agricultural or agri-tech products.
• Research & Development Grants: For developing new technologies, sensors, or AI-based solutions in farming.

How Much Subsidy Is Provided to New Agriculture & Agri-Tech Startups?

The amount of subsidy depends on the scheme and state. On average, 35%–75% subsidy is provided to new Agriculture & Agri-Tech startups on their project cost.

For instance:

• Central Government’s Agri-Processing Cluster Scheme under PMKSY provides up to 50% subsidy on plant and machinery.
• NABARD’s Agri-Infrastructure Fund offers interest subsidies up to 3% for creating post-harvest infrastructure.
• Agri-Tech Innovation Schemes under the Ministry of Agriculture offer grants up to ₹1 crore for technology-based(check subsidy) solutions.

State-Wise Subsidies on Agriculture & Agri-Tech Industry

1. Haryana

The Haryana Agri-Business and Food Processing Policy provides up to 50% capital subsidy for setting up agri-tech processing or cold chain units. Women-led enterprises get additional 10% subsidy.

2. Uttarakhand

Under the Uttarakhand MSME Policy, new agri-based industries can get up to 40% subsidy on plant and machinery and 100% exemption on stamp duty for rural setups.

3. Bihar

The Bihar Startup Policy and Agriculture Investment Promotion Policy provide 35%–50% subsidy for establishing agri-processing units and agri-tech startups, especially in Patna, Nalanda, and Muzaffarpur districts.

4. Madhya Pradesh

The MP Agro Policy provides 40% subsidy on infrastructure and interest subsidy up to 5% for agri and food startups. Women entrepreneurs receive additional 10% subsidy.

5. Punjab

The Punjab Agro Industries Corporation (PAIC) offers 25%–50% subsidy for agri-tech units focusing on sustainable farming and food processing.

6. Rajasthan

The Rajasthan Investment Promotion Scheme (RIPS) gives 50% capital subsidy for agri and agri-tech industries and 75% electricity duty exemption for 7 years.

7. Uttar Pradesh

Under the UP Food Processing Industrial Policy, entrepreneurs get 50% subsidy on machinery and 25% transport subsidy for export-based agri-tech products.

8. Gujarat

The Gujarat Agro and Food Processing Policy provides 35% capital subsidy and interest subsidy of 7% for agri-tech startups. It also promotes export subsidy for processed food items.

9. Himachal Pradesh

HP’s Agro & Allied Sector Policy gives 50% subsidy for setting up cold storages, packaging, and AI-based farm automation projects.

10. West Bengal

The West Bengal Agro-Industry Policy offers 30%–40% subsidy for agri-tech startups and full GST reimbursement for the first 5 years of operation.

Export Subsidy on Agriculture & Agri-Tech Industry

The Government of India also provides export subsidies to boost the global reach of Indian agri-products.

• Under the Transport and Marketing Assistance (TMA) scheme, exporters of agri-products receive up to 50% freight subsidy.
• The Agriculture Export Policy 2019 further encourages startups to invest in value-added products, organic exports, and digital supply chains.

Eligibility Criteria for Agriculture & Agri-Tech Subsidies

To avail of subsidies, your business must meet the following criteria:

1. Business Type: Should be registered as a startup, MSME(regsiter here), or private limited company.
2. Sector Focus: Engaged in farming technology, processing, cold chain, supply chain management, or agri-input manufacturing.
3. Location: Units set up in rural or backward areas often receive higher subsidies.
4. Women Enterprises: Women-led startups(check scheme) receive 5%–10% additional subsidy.
5. Compliance: Must have a valid Udyam Registration and follow state-specific environmental and operational norms.

Top Agriculture & Agri-Tech Startups That Benefited from Government Schemes

Several Indian agri-tech startups have leveraged subsidies and government support to grow rapidly:

• Ninjacart: Received state-level grants to improve agri-supply chains.
• DeHaat: Benefited from agri-financing and infrastructure subsidies under NABARD schemes.
• AgroStar: Supported by startup-friendly incentives for tech-based farming.
• Stellapps: Got funding through the Agri-Innovation Fund for dairy digitization.
• EM3 Agri Services: Leveraged capital subsidies to expand their farm equipment services.

These examples show how government incentives empower startups to create sustainable solutions for farmers.

How StartupFlora Guides You to Get Subsidy Under These Schemes

StartupFlora guide new businesses navigate the complex subsidy application process with expert guidance.
Here’s how StartupFlora supports Agri-Tech startups:

• Eligibility Check: Analyze which subsidy schemes best fit your business.
• Document Preparation: Help in preparing detailed project reports, cost breakdowns, and financial plans.
• Application Filing: Submit subsidy applications through central and state portals.
• Follow-Up & Approval: Ensure your project gets approved without unnecessary delays.
• Post-Approval Assistance: Guide on claim processing and fund disbursement.

With StartupFlora’s end-to-end consultancy, entrepreneurs can focus on innovation while the paperwork is managed professionally.

Conclusion

Government subsidies for the Agriculture & Agri-Tech industry are playing a transformative role in India’s rural economy. From reducing startup costs to promoting innovation, these incentives empower entrepreneurs to make farming smarter, efficient, and profitable.

If you are planning to set up your agri-tech business, explore state-specific subsidies, prepare your proposal carefully, and connect with experts like StartupFlora to simplify the subsidy process and start your journey toward success.

FAQ on Industrial Subsidy for Agriculture & Agri-Tech Industry

Q1. What is the industrial subsidy for Agriculture & Agri-Tech industry?
A: It’s financial support provided by government schemes to promote agricultural technology, food processing, and allied businesses. It may include capital, interest, or export subsidies.

Q2. How much subsidy is available for new Agri-Tech startups?
A: Most government schemes offer 35%–75% subsidy depending on the state, business scale, and type of project.

Q3. Which states offer the best subsidies for Agriculture & Agri-Tech startups?
A: Haryana, Madhya Pradesh, Rajasthan, Gujarat, and Uttar Pradesh are among the top states offering 40%–75% subsidies and tax exemptions.

Q4. Is there any export subsidy for Agriculture & Agri-Tech industry?
A: Yes. Exporters can claim up to 50% transport subsidy under the Transport and Marketing Assistance (TMA) scheme.

Q5. Can women entrepreneurs apply for these subsidies?
A: Absolutely. Women-led enterprises get 5%–10% higher subsidies and priority approval under many state policies.