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Business & Entrepreneurship

Capital Subsidy

"Capital Subsidy" by the MSME Dept, Govt of Tamil Nadu, assists MSMEs in reducing their burden of capital procurement. The subsidy is provided for 25% of eligible plant and machinery costs for MSMEs, with an additional capital subsidy for MSMEs set up by Women/SC/ST/Transgender/PwD entrepreneurs.

Authority

State/ UT

Region

Tamil Nadu

Status

Verified 2026

Updated

March 2026

What you get

- 25% capital subsidy on the value of eligible plant and machinery, subject to a maximum of ₹ 150,00,000. | - Additional capital subsidy for enterprises set up by Women / Scheduled Caste / Scheduled Tribe / Differently Abled and Transgender entrepreneurs at the rate of 5% on the value of eligible plant and machinery, subject to a maximum of ₹ 5,00,000. | - Additional Capital subsidy of 10% for micro-enterprises on the investment made in plant and machinery value, subjected to a maximum of ₹ 5,00,000. | - All existing Micro and Small Manufacturing Enterprises set up anywhere in Tamil Nadu graduating to higher category by undertaking expansion/diversification are eligible for a 5% additional capital subsidy subject to a maximum of ₹ 25,00,000 for scaling up. | - Additional Capital Subsidy at the rate of 25% of plant and machinery value installed to promote such technology subjected to a maximum of ₹ 10,00,000 for new and existing enterprises promotes cleaner and environmentally friendly technologies.

Who can apply

All new micro manufacturing enterprises established anywhere in the state.; All new small and medium enterprises under following 24 thrust sectors established anywhere in the state (excluding additional capital subsidy and employment generation subsidy):; All new small and medium manufacturing enterprises established in any of the 254 industrially backward blocks in the state.; All new agro-based small and medium manufacturing enterprises established in any of the 388 blocks in the state.; Existing manufacturing enterprises of the above categories which have taken up substantial expansion/diversification of the existing activities.

Required Paperwork

  • Aadhaar Card
  • PAN Card
  • Income Certificate
  • Residence Proof (Domicile)

Common Questions

Can enterprises engaged in job work-based manufacturing apply for the scheme?

Yes, enterprises involved in manufacturing on a job-work basis can apply, and the first sale invoice after production commencement is a required document.

Is there a subsidy for agro-based small and medium manufacturing enterprises?

Yes, new agro-based enterprises established in designated blocks can avail of the capital subsidy scheme.

What is the maximum capital subsidy for micro-enterprises on plant and machinery investments?

Micro-enterprises can benefit from an additional 10% capital subsidy, capped at [?]5,00,000, on their plant and machinery investments.

Are there specific sectors under which small and medium enterprises are eligible?

Yes, 24 thrust sectors, including electronics, pharmaceuticals, and aerospace, qualify for the scheme, excluding certain subcategories.

Can existing enterprises graduating to a higher category get additional subsidies?

Yes, existing Micro and Small Manufacturing Enterprises scaling up are eligible for a 5% additional capital subsidy, up to [?]25,00,000.

Is there a capital subsidy for enterprises adopting cleaner technologies?

Yes, a 25% additional capital subsidy, up to [?]10,00,000, is available for promoting cleaner and environmentally friendly technologies.

What documents are required for application?

Documents include Udyog Aadhaar Memorandum, TN Electricity Board sanction order, invoices, CA certificates, and others. All files should be in PDF format and under 200 kb.

Are there benefits for enterprises in industrially backward blocks?

Yes, new small and medium manufacturing enterprises in industrially backward blocks are eligible for a 5% additional capital subsidy, capped at [?]25,00,000.

What is the maximum capital subsidy available for enterprises set up by women entrepreneurs?

Women entrepreneurs can avail an additional 5% capital subsidy, up to [?]5,00,000, on eligible plant and machinery costs.

Who is eligible to apply for the Capital Subsidy scheme?

New micro manufacturing enterprises, small and medium enterprises in designated sectors, and existing enterprises undergoing substantial expansion/diversification are eligible.