MSME Incentives under Viksit Gujarat Industrial Policy 2026 (Scheme GR of 25 September 2026)

The Government of Gujarat notified the Scheme for assistance to MSMEs under Viksit Gujarat Industrial Policy 2026 on 25 September 2026 (Industries and Mines Department GR No. IMD/WRT/e-file/9/2026/2630/CH, operative 1 June 2026 to 31 May 2031). Micro, small and medium enterprises can combine a capital subsidy of 35% of eligible fixed capital investment in Category A talukas or 25% in Category B, an interest subsidy of 7% a year on the term loan for 5 years up to 10% of EFCI (8% for women entrepreneurs, registered manufacturing startups and first-generation entrepreneurs), and power tariff support of ₹2 or ₹1 per unit for 5 years up to 25% of EFCI, within an overall ceiling of 45% (Category A) or 35% (Category B); 50% and 45% in the five selected thrust sectors. Per-year ceilings apply with no carry forward: 9% or 7% of EFCI a year for small and medium units, 37% or 27% in year 1 and 2% thereafter for micro units.

The GR adopts the revised MSME definition (plant and machinery up to ₹2.5 crore, ₹25 crore and ₹125 crore), computes the capital subsidy on the full EFCI with self-financed projects eligible, fixes a 12- or 18-month investment window after commercial production, sets Provisional Eligibility Certificate applications at six months, and quantifies every support scheme from ERP to patents. EPF reimbursement for 5 years and electricity duty exemption come on top. This page, by the Chartered Accountants at ADAPT & Associates LLP, Ahmedabad, quotes the GR directly, compares it with the 2020 scheme, and includes an estimator built on the same figures.

MSME definition (GR para 1.2)

Micro: gross fixed capital investment in plant and machinery up to ₹2.5 crore. Small: above ₹2.5 crore up to ₹25 crore. Medium: above ₹25 crore up to ₹125 crore, counted across all of the enterprise's units in the country; status is fixed on the date of project completion. Above ₹125 crore is a Large industrial undertaking under the GR of 8 September 2026.

Incentives for MSMEs (GR para 4.2)

An MSME chooses any one component or any combination of capital subsidy, interest subsidy and power tariff, within each component's cap and the overall ceiling. Capital subsidy is on eligible fixed capital investment (para 5.1); self-financed projects qualify on a Chartered Accountant, Chartered Engineer or Company Secretary certificate (para 2.3). Interest subsidy needs a term loan from a bank or RBI-recognised financial institution; NBFC loans are excluded (para 1.8).

Selected thrust sectors: sports goods, toys, footwear, robots, drones (para 4.3)

Annual ceilings, no carry forward (paras 4.2 c-e, 4.3 c-e)

The per-year ceiling is the binding constraint. A Small or Medium unit in Category A receives 7% of EFCI a year as capital subsidy against a 9% annual ceiling, so interest and power tariff together can add at most 2% a year; the 45% total needs all five years at the ceiling. A Micro unit takes its whole capital subsidy in year 1 against a 37% year-1 ceiling, then 2% a year. Anything above the ceiling in a year is forfeited.

On top of the ceiling

EPF reimbursement: 100% of the employer's statutory contribution for new employees without a prior UAN, for 5 years from commercial production, capped at 12% of basic plus DA or ₹1,800 a month (male), ₹2,500 (female) and ₹3,000 (specially-abled), paid quarterly (para 7). Support schemes with fixed amounts (paras 8 to 18):

Selected thrust sectors additionally (para 19): 100% stamp duty and registration reimbursement on project land; IPR 75% up to ₹1 crore; technology acquisition 65% up to ₹1 crore; international certification 100% up to ₹5 crore; training ₹8,000 per Gujarat-domiciled employee per month for 12 months; creative design studio 50% up to ₹5 crore; AI subscription fees 80% up to ₹1 lakh a year for 3 years for micro enterprises and artisans. From the policy document, under separate schemes and not in this GR: SC/ST entrepreneurs' additional 5% of the ceiling (Dr. Babasaheb Ambedkar and Bhagwan Birsa Munda schemes), cleaner production and zero-liquid-discharge grants, and startup sustenance and seed support.

Eligibility and process (paras 1, 2, 3, 5, 6, 21)

New units and expansions or diversifications commencing commercial production between 1 June 2026 and 31 May 2031, with Udyam registration, IEM, letter of intent or equivalent. Expansion needs at least 50% more gross fixed capital investment (excluding land) with 60% in plant and machinery and 50% more capacity, after 75% utilisation in one of the previous three years; diversification needs 25% (micro and small) or 50% (medium). Eligible investment counts from 1 January 2026, with 12 months after production for plant and machinery up to ₹50 crore and 18 months up to ₹125 crore. EFCI is new building (actual cost or R&B schedule of rates, whichever is lower), other construction, new plant and machinery including captive power, in-premises vehicles, pollution control, technology and patents up to 10% of plant and machinery and DG sets up to 50% of load or 5 MW, and 50% of project-related infrastructure; land, working capital, second-hand machinery, rented assets, capitalised interest and consultancy fees are excluded. Provisional Eligibility Certificate within six months of production or of the GR (25 March 2027), whichever is later, covering up to 40% of EFCI; Final Eligibility Certificate on a bank completion certificate or asset verification; applications delayed up to two years are cut proportionately and later ones are not entertained. At least 85% of employees and 60% of managerial staff Gujarat-domiciled, GPCB certificate, continuous production; breach is recovered with 18% interest. Micro and small units are sanctioned by the General Manager, District Industries Centre; medium units by the MSME Commissioner. Units not yet in production may opt for the 2022 scheme until 25 March 2027, irrevocably, provided production starts by 4 October 2027.

What changed from the 2020 policy

Status as of 21 October 2026: policy document issued 15 June 2026; taluka GR and Large, Mega and Ultra Mega GR issued 8 September 2026; MSME scheme GR No. IMD/WRT/e-file/9/2026/2630/CH issued 25 September 2026 and announced publicly on 9 October 2026 with the same figures. Every MSME figure on this page is from that GR. Each incentive has its own six-month application window: see every application deadline.

Source documents: Scheme GR IMD/WRT/e-file/9/2026/2320/I (PDF) and Taluka classification GR IMD/HMR/e-file/9/2026/2211/I (PDF), both dated 8 September 2026, and MSME scheme GR IMD/WRT/e-file/9/2026/2630/CH (PDF) dated 25 September 2026. Related: subsidy calculator, taluka category list, Large, Mega and Ultra Mega explainer, MSME scheme GR decoded.