Top Government Funding Schemes for Manufacturing Businesses in India

Introduction

Manufacturing is the backbone of India’s economy. From small workshops to large factories, every business needs financial support to start and grow. To help entrepreneurs, the Government of India has launched many funding schemes for manufacturing businesses. These schemes provide loans, subsidies, and grants to reduce financial pressure and promote growth.

What is Government Grants?

Government grants for the manufacturing sector are financial benefits provided by the central or state government. These grants may include loan subsidies, capital subsidies, interest subvention, or raw material support. Unlike loans, some grants don’t need to be repaid, making them very useful for new businesses.

Eligibility Criteria for Government Grants

Eligibility varies from scheme to scheme, but common points are:

• Applicant must be an Indian citizen.
• Business should be in the non-farm sector.
• Minimum age: 18 years (for PMEGP/MUDRA).
• Both new and existing manufacturing units can apply.
• MSME registration or Udyam Aadhaar may be required.

Why Funding Schemes Are Important for MSMEs and Startups?

MSMEs and startups are the growth engines of India’s economy, but they often face problems like lack of capital, raw materials, and technology. Funding schemes for new businesses and MSME manufacturing schemes 2025 help overcome these challenges by providing low-cost finance, subsidies, and government support.

Top Government Funding Schemes for Manufacturing Businesses

1. Prime Minister’s Employment Generation Programme (PMEGP)

• Provides a subsidy on bank loans for new enterprises.
• Project cost: Up to ₹50 lakh for manufacturing units.
• Eligible for individuals 18+ years, with special benefits for women, SC/ST, and minorities.

2. Pradhan Mantri MUDRA Yojana (PMMY)

• Offers collateral-free loans to micro and small enterprises.
• Loan categories: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), Tarun (₹5–₹20 lakh).
• Helps small manufacturers, shop owners, and artisans.

3. Production Linked Incentive (PLI) Scheme

• Provides financial incentives to increase domestic production.
• Target sectors: Automotive, electronics, pharmaceuticals, IT hardware, solar, etc.
• Encourages large-scale and high-tech manufacturing.

4. Raw Material Assistance Scheme (by NSIC)

• Helps MSMEs purchase raw materials (imported or indigenous).
• NSIC pays suppliers directly, and MSMEs can repay in easy instalments.
• Reduces working capital pressure for small manufacturers.

5. PM Vishwakarma Scheme

• Supports artisans and traditional craftspeople like carpenters, blacksmiths, potters, and goldsmiths.
• Provides modern toolkits, training, certification, and loan support.

6. Credit Linked Capital Subsidy Scheme (CLCSS)

• Offers subsidy for technology upgradation.
• Helps MSMEs buy modern machinery and improve productivity.

7. Technology Upgradation Fund Scheme (TUFS / ATUFS)

• Special scheme for the textile and garment sector.
• Provides subsidies for replacing old machines and adopting new technology.

8. MSME Credit Guarantee Fund Trust Scheme (CGTMSE)

• Provides collateral-free loans to MSMEs through banks and NBFCs.
• Reduces risk for lenders, making it easier for small businesses to access finance.

9. Stand-Up India Scheme

• Provides loans between ₹10 lakh and ₹1 crore.
• Specially for women entrepreneurs and SC/ST business owners.

10. Prime Minister’s Formalisation of Micro Food Processing Enterprises (PM-FME) Scheme

• Supports micro food processing units.
• Offers subsidies, training, and branding assistance to help units grow.

How to Apply for Manufacturing Funding Schemes in India (Step by Step)

1. Identify the right scheme for your business needs.
2. Register your business under Udyam or MSME portal.
3. Apply online through portals like JanSamarth, NSIC, or Stand-Up India.
4. Upload required documents: project report, Aadhaar, PAN, and bank details.
5. Application is reviewed, and loan/subsidy is approved by the bank or authority.

Which Funding Scheme Is Best for Your Manufacturing Business?

• For new small units/startups: PMEGP, MUDRA, CGTMSE.
• For large-scale/high-tech manufacturing: PLI Scheme.
• For raw material support: NSIC Raw Material Assistance.
• For artisans/traditional workers: PM Vishwakarma.
• For textile businesses: TUFS/ATUFS.

Why Choose StartupFlora for Manufacturing Business Funding?

• Expert team with deep knowledge of Government Grants for Manufacturing Sector.
• End-to-end support from eligibility check to loan sanction.
• Assistance in preparing DPRs (Detailed Project Reports) for schemes like PMEGP, MUDRA, and PLI.
• Trusted by 10,000+ MSMEs and startups across India.

With StartupFlora, entrepreneurs don’t just apply for schemes—they actually secure funding and build strong, sustainable manufacturing businesses.

Conclusion:

The Indian government aims to make the country a global manufacturing hub. With schemes like Funding Scheme for Manufacturing Sector, Government Funding Schemes in India, and MSME Manufacturing Schemes 2025, entrepreneurs can now start and expand their businesses with less financial burden. These initiatives will create more jobs, strengthen exports, and boost India’s economic growth.

FAQ

1. What are the top government funding schemes for manufacturing sector?
PMEGP, MUDRA Yojana, PLI Scheme, CLCSS, CGTMSE, TUFS, Stand-Up India, and PM-FME are the top schemes for manufacturing businesses.

2. Who can apply for government grants for manufacturing business?
Any Indian citizen above 18 years with a non-farm manufacturing unit can apply. MSMEs, startups, women, and SC/ST entrepreneurs get special benefits.

3. What is the PMEGP loan scheme for manufacturing?
PMEGP provides subsidy on bank loans for new manufacturing units with a project cost up to ₹50 lakh.

4. How does the CGTMSE loan scheme for MSMEs work?
CGTMSE offers collateral-free loans to MSMEs. The government gives guarantee cover so banks can easily lend to small businesses.

5. Which scheme is best for technology upgradation?
The Credit Linked Capital Subsidy Scheme (CLCSS) and TUFS help manufacturers modernize machinery with subsidies.