State IncentiveAP Industries Dept.Verified 7 May 2026Official source

AP MSME & Entrepreneur Development Policy 4.0 — Capital Investment Subsidy

Capital Investment Subsidy for new and expanding manufacturing and service MSMEs in Andhra Pradesh under MSME & Entrepreneur Development Policy 4.0 (2024–2029), operative via G.O.Ms.No.69. General category: 25% of Fixed Capital Investment, capped by enterprise size — Micro: ₹25 lakh, Small: ₹1.5 crore, Medium: ₹7 crore. Special category (Women, SC, ST, BC, Minorities, Specially-abled, Transgenders): 35% of FCI with the same size-based caps. Additional incentives: 100% stamp duty reimbursement, 100% net SGST reimbursement, and power cost reimbursement. Applications are managed through the AP MSME ONE single-window portal. Micro and Small claims are approved by the District Level Committee (DLC); Medium claims by the State Level Committee (SLC). Disbursement is in annual instalments over 2–4 years after commencement of commercial production.

Maximum amount
₹7.0Cr
Typical payout
₹1.5Cr
Processing time
12–24 weeks

Eligibility criteria

Company type
Private Limited, LLP, Proprietorship, Partnership Firm
Stage
Early Stage (Revenue < ₹1Cr), Growth Stage (₹1Cr–₹25Cr), Scaling (₹25Cr+)
States
Andhra Pradesh
Sectors
manufacturing, food_processing, textile, chemicals, engineering, pharma, agritech
Prerequisites
  • Udyam (MSME) registration required

Documents required

1
Udyam Registration Certificate
Active Udyam Registration Certificate confirming MSME status — mandatory for all units applying under the AP MSME & Entrepreneur Development Policy 4.0 (2024–2029).
Tip: Ensure the Udyam certificate reflects the correct MSME category (Micro/Small/Medium) matching your investment size. Subsidy caps differ per category: Micro ₹25L, Small ₹1.5Cr, Medium ₹7Cr.
2
Aadhaar Card of All Directors / Partners / Promoters
Aadhaar card copies of all directors (for companies), partners (for firms), or promoters for KYC verification. Required for all founding members with equity stake.
Tip: Submit Aadhaar for each promoter individually. Masked Aadhaar (last 4 digits visible) is acceptable. Ensure the name matches the PAN and business constitution documents.
3
PAN Card of All Directors / Partners / Promoters
PAN card copies of all directors, partners, or promoters for KYC verification. Both individual promoter PANs and the entity PAN are required.
Tip: Submit the entity PAN (company/firm PAN) in addition to individual promoter PANs. The name on each PAN must match the business constitution documents exactly.
4
Business Constitution Documents
Entity formation documents appropriate to the business structure: Partnership Deed for firms, or Certificate of Incorporation plus Memorandum of Association (MoA) and Articles of Association (AoA) for Private Limited/OPC companies. Confirms the legal structure of the enterprise.
Tip: All documents must be registered and authenticated. For companies, include the ROC-stamped MoA/AoA. For partnership firms, submit the registered partnership deed.
5
Detailed Project Report (DPR)
Comprehensive project report covering the project cost breakdown (land, building, plant & machinery), means of finance, production capacity, technology details, and employment projections. Central to the capital subsidy calculation.
Tip: The DPR must clearly itemise Fixed Capital Investment (FCI) as the subsidy is calculated as 25% (general) or 35% (special category) of FCI. Bank-approved DPRs are preferred. Include the AP MSME ONE application number if available.
6
Land and Infrastructure Proof — APIIC Allotment Letter or Lease Deed and Building Plan Approvals
Land/shed allotment letter from APIIC (Andhra Pradesh Industrial Infrastructure Corporation) for industrial estate units, or a private lease deed / sale deed for non-APIIC plots. Also includes approved building plan from local authority confirming construction legality.
Tip: APIIC allotment letter is the preferred proof for industrial estate units. For private land, submit a registered lease deed of sufficient tenure (typically 10+ years). Building plan approval from the local municipality or industrial authority is mandatory — unapproved construction is not eligible.
7
GST Registration Certificate and Recent GSTR Returns
GSTIN registration certificate and recent GSTR-1 and GSTR-3B filings confirming tax compliance. The GST registration must be in Andhra Pradesh (state code 37) for SGST reimbursement claims.
Tip: Ensure GST returns are filed and up to date. For the SGST reimbursement benefit (100% net SGST), maintain clean GSTR filing history. The state code on the GSTIN must be 37 (AP).
8
Investment Evidence — Original Machinery Invoices and Bank Payment Proofs
Original purchase invoices and bank payment statements (RTGS/NEFT confirmations or cheque payment proofs) for all plant, machinery, and equipment installed in the unit. Used to verify Fixed Capital Investment (FCI) for subsidy calculation.
Tip: All invoices must be in the enterprise's name with full GST details. Payments must be through formal banking channels — cash payments for machinery are typically not considered for FCI computation. Retain originals for physical verification during DIC site inspection.
9
Utility Proof — Power Connection Sanction Order and Electricity Bills
Power connection sanction order from APEPDCL/APSPDCL confirming the power load sanctioned for the unit, along with recent electricity bills as proof of active commercial operations.
Tip: The sanctioned load on the power connection must be consistent with the installed machinery capacity. For new units, the connection sanction order alone suffices initially — bills can be submitted during the commencement verification stage.
10
Special Category Certificate — Caste, Gender, Disability, or Minority Proof
Conditional — required to claim the enhanced 35% FCI subsidy for special category entrepreneurs. SC/ST/BC entrepreneurs submit caste certificates; women entrepreneurs submit shareholding/directorship proof of majority women ownership; differently-abled/transgender applicants submit disability or transgender certificates; minority entrepreneurs submit community certificates.
Tip: Special category subsidy requires the applicant to hold majority ownership (typically 51%+). Submit the certificate applicable to your category — multiple categories can be stacked in some cases. Certificate must be from a competent government authority.
11
Bank Loan Sanction Letter and Disbursement Statements
Conditional — required if the project is bank-financed. Sanction letter from the lending bank or financial institution specifying the loan amount, purpose, interest rate, and repayment terms, along with disbursement statements confirming funds were actually released.
Tip: Both the sanction letter and actual disbursement proof are required. Required for interest subvention and for projects where bank-financed FCI is included in the capital subsidy calculation.
12
Certificate of Commencement of Production (CoP) and CA Certificate on Incremental FCI
Conditional — required for expansion/diversification units only. Certificate of Commencement of Production (CoP) for the new expansion phase, plus a CA-certified certificate quantifying the incremental Fixed Capital Investment above the pre-expansion baseline.
Tip: For expansion units, only the incremental FCI (investment added during expansion) qualifies for subsidy — not the total existing investment. The CA certificate must clearly state the pre-expansion FCI, new investment added, and total post-expansion FCI.
13
Chartered Engineer's Certificate (CEC) for Self-Fabricated Machinery
Conditional — required only when the unit has self-fabricated or in-house manufactured plant and machinery (instead of purchasing from vendors). A Chartered Engineer's Certificate valuing the self-fabricated machinery for inclusion in FCI.
Tip: Applicable when part of the plant and machinery is designed and built in-house. The CEC must specify the fair market value / cost of fabrication. Standard purchased machinery with vendor invoices does not require a CEC.

How to apply for AP MSME Policy 4.0

1
Register on the AP MSME ONE Portal. Create an account using your enterprise PAN and promoter Aadhaar details. This is the single window for all AP MSME incentive applications — all subsequent submissions, tracking, and disbursement requests are managed here.Open portal
2
Navigate to the "Incentives" section and select "Capital Subsidy" under the AP MSME & Entrepreneur Development Policy 4.0 (2024–2029). Fill out the Common Application Form (CAF) with enterprise details, Udyam number, Fixed Capital Investment breakdown (land capped at applicable rate, building, plant & machinery), and bank account details for disbursement.Open portal
3
Upload all mandatory documents in PDF format: Udyam certificate, KYC (Aadhaar + PAN of all promoters), constitution documents, Detailed Project Report, land/APIIC allotment proof, building plan approvals, GST certificate with returns, investment invoices with bank payment proofs, and power connection sanction order with electricity bills. Add applicable conditional documents.Open portal
4
Submit the completed CAF and note the auto-generated application reference number. Track your application status through the portal dashboard — status updates from "Submitted" → "Under Verification" → "Inspection Scheduled" → "Approved" are visible here.Open portal
5
Physical site inspection by a District Industries Centre (DIC) officer. The officer cross-verifies all installed plant and machinery against the submitted invoices and DPR, checks building construction against approved plans, and confirms that commercial operations have commenced. Ensure all assets are installed and operational on the inspection date.
6
Committee review based on investment size: Micro and Small enterprise claims are reviewed by the District Level Committee (DLC); Medium enterprise claims go to the State Level Committee (SLC). The committee verifies eligibility against G.O.Ms.No.69 (the operative government order for Policy 4.0) and the inspection report.
7
A formal Sanction Order is issued to the enterprise upon committee approval. The sanction order states the approved subsidy amount, the instalment schedule, and any conditions to be met for each instalment. Download and preserve the Sanction Order from the portal.
8
Subsidy is disbursed in annual instalments over 2 to 4 years after the Commencement of Commercial Production (CoD) — the exact number of instalments depends on the enterprise category and approved amount. Submit an annual utilisation certificate and operational status report on the portal to trigger each instalment. Funds are credited directly to the registered bank account.Open portal

Does your startup qualify for AP MSME Policy 4.0?

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Frequently asked questions

Who is eligible for AP MSME Policy 4.0?

AP MSME Policy 4.0 is available to Private Limited, LLP, Proprietorship, Partnership Firm companies at the Early Stage (Revenue < ₹1Cr), Growth Stage (₹1Cr–₹25Cr), Scaling (₹25Cr+) stage, across Andhra Pradesh. Udyam (MSME) registration is required.

How much funding does AP MSME Policy 4.0 provide?

AP MSME Policy 4.0 provides up to ₹7.0Cr. Most applicants receive around ₹1.5Cr.

How long does AP MSME Policy 4.0 approval take?

The typical processing time from submission to disbursement is 12–24 weeks.

Is AP MSME Policy 4.0 currently accepting applications?

Yes, AP MSME Policy 4.0 is currently active and accepting applications.

Do I need Udyam registration for AP MSME Policy 4.0?

Yes, Udyam (MSME) registration is required. Register at udyamregistration.gov.in before applying.

Information is based on publicly available scheme guidelines. Last verified 7 May 2026. Always verify with official sources before applying.