Gujarat Announces New MSME Policy With Subsidies Up to 50%

GANDHINAGAR: Gujarat has rolled out a five-year industrial incentive scheme to help small businesses expand, adopt artificial intelligence and compete in global markets. The Viksit Gujarat Industrial Policy-2026 offers financial support across investment, employment, technology, quality certification and energy conservation.

The scheme, announced by the Industries and Mines Department, took effect on June 1, 2026, and will remain in force until May 31, 2031. Chief Minister Bhupendra Patel and Deputy Chief Minister Harsh Sanghavi are leading the state’s push to strengthen the micro, small and medium enterprises (MSME) sector.

Capital and Interest Subsidies for MSMEs

Eligible businesses can receive combined incentives of up to 45% of eligible fixed capital investment in Category-A areas and 35% in Category-B areas. Selected priority sectors can receive assistance of up to 50% and 45%, respectively.

The scheme also offers 7% interest assistance on term loans for five years. Electricity tariff support will reach ₹2 per unit in Category-A areas and ₹1 per unit in Category-B areas for five years.

Women entrepreneurs, manufacturing startups and first-generation entrepreneurs can receive an additional 1% interest subsidy within the prescribed limits.

Employment Incentives and Local Hiring

The government will reimburse up to 100% of employers’ EPF contributions for eligible new employees for five years. Monthly support limits vary by employee category.

Beneficiary industries must also meet local employment requirements. At least 85% of their workforce must comprise Gujarat residents. Residents must account for at least 60% of managerial and supervisory staff.

Push for AI, Technology and Quality

The policy supports digital transformation and innovation. MSMEs can receive up to ₹5 lakh for information and communication technology facilities. Technology acquisition assistance can reach ₹50 lakh, rising to ₹1 crore in selected sectors.

Businesses can also claim up to ₹25 lakh for patent registration. Selected sectors can receive enhanced intellectual property support of up to ₹1 crore.

The scheme offers assistance for ERP systems, quality certification, energy audits and water conservation. Eligible micro-enterprises and artisans in selected sectors can receive up to 80% of AI subscription costs, capped at ₹1 lakh annually for three years.

Special Benefits for Priority Industries

Sports equipment, toys, footwear, robotics and drones are among the selected thrust sectors. Eligible businesses can access stamp duty reimbursement, international certification support and employee training assistance.

The policy also supports rented manufacturing sheds and collateral-free loans.

By linking financial incentives with technology adoption and local employment, Gujarat aims to help MSMEs move beyond basic manufacturing and build globally competitive businesses.