State IncentiveUP MSME Dept.Verified 7 May 2026Official source

UP MSME Promotion Policy 2022 — Capital Investment Subsidy

Capital Investment Subsidy for new and expanding manufacturing MSMEs in Uttar Pradesh under MSME Promotion Policy 2022. Subsidy rate depends on both region and enterprise size — Bundelkhand & Purvanchal (higher-priority regions): Micro 25%, Small 20%, Medium 15%; Madhyanchal & Paschimanchal: Micro 20%, Small 15%, Medium 10%. SC/ST and women entrepreneurs get an additional 2% across all regions. Maximum subsidy: ₹4 crore per unit. Land cost may be included in Fixed Capital Investment but is capped at 10% of total FCI. Disbursement is in two installments: 50% after factory construction is complete, and 50% after the unit reaches 50% of planned production capacity. Additional benefits: Micro units get a 50% interest subsidy on term loans for 5 years (up to ₹25L; 60% for SC/ST/Women); 100% stamp duty exemption in Bundelkhand/Purvanchal (women get 100% statewide); 75% reimbursement of quality certification costs (ZED, GMP, Hallmark, ISO) up to ₹5L. Apply via the MSME 1-Connect platform (Sandes app OTP required).

Maximum amount

₹4.0Cr

Typical payout

₹20.0L

Processing time

6–16 weeks

Eligibility criteria

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

Documents required

Sandes App Profile (OTP prerequisite)

Active profile on the Sandes messaging app, used to receive OTP for account creation and login on the MSME 1-Connect portal.

Tip: Download the Sandes app from the Play Store or App Store, create a profile using your registered mobile number, and keep the app accessible during the entire application process.

Udyam Registration Certificate

Valid Udyam Registration Certificate classifying the enterprise as Micro, Small, or Medium. The enterprise size determines your subsidy rate.

Tip: Subsidy rates: Bundelkhand/Purvanchal — Micro 25%, Small 20%, Medium 15%. Madhyanchal/Paschimanchal — Micro 20%, Small 15%, Medium 10%. Confirm your enterprise size before submitting.

Business Constitution Proof

Partnership deed and LLP agreement (for firms/LLPs), or Memorandum of Association, Articles of Association, and Certificate of Incorporation (for companies).

Tip: For proprietorships, a self-declaration of ownership is sufficient. All documents must be registered and match the entity name in the Udyam certificate exactly.

PAN and GSTIN of Entity and All Directors / Partners / Proprietor

Permanent Account Number and GST registration certificate of the entity, plus individual PANs of all directors, partners, or the sole proprietor.

Tip: Entity PAN must match the name used in the Udyam certificate and bank account. GSTIN must be active and registered for the manufacturing activity.

Land Ownership Proof

Registered land purchase deed (if owned) or a duly executed lease agreement valid for a minimum of 5 years (if leased), confirming the unit is located within Uttar Pradesh.

Tip: Land purchase cost can be included in FCI but is capped at a maximum of 10% of total Fixed Capital Investment. Unregistered lease agreements are not accepted.

Term Loan Sanction Letter

Formal bank or financial institution loan documentation detailing the credit facility extended for plant, machinery, building, or other eligible infrastructure.

Tip: Required for all financed units. Must specify the sanctioned amount, purpose, and disbursement schedule. Micro units may additionally claim a 50% interest subsidy on this loan for 5 years (up to ₹25L; 60% for SC/ST/Women).

CA Certificate on Fixed Capital Investment

Chartered Accountant certificate providing an audited, itemised breakdown of all expenses incurred towards Fixed Capital Investment (FCI), covering land, building, plant & machinery.

Tip: Land cost must be separately stated and must not exceed 10% of total FCI. P&M must be new (not second-hand). The CA must include UDIN and certify that all assets are installed and operational.

Special Category Certificate (SC / ST / Women)Optional

Caste certificate issued by a gazetted authority (for SC/ST) or gender declaration with shareholding proof (for women entrepreneurs), to claim the additional 2% subsidy.

When needed: Required to claim the additional 2% capital subsidy for SC/ST or Women entrepreneurs

Tip: SC/ST and women entrepreneurs get +2% capital subsidy across all regions. Women entrepreneurs also get 100% stamp duty exemption statewide and a 60% interest subsidy rate (vs 50% for others).

Chartered Engineer's CertificateOptional

Certificate from a registered Chartered Engineer validating the valuation of self-fabricated or custom-built industrial machinery that does not have a standard purchase invoice.

When needed: Required if the unit includes self-fabricated or custom-built machinery in the FCI claim

Tip: Required when any machinery was fabricated in-house or through a non-standard vendor. The Chartered Engineer must be registered with the relevant professional body and provide their registration number.

Power Connection Sanction Letter and Meter CardOptional

Official electricity allocation letter from the state utility board (UPPCL or equivalent) confirming the industrial load sanction, plus the active factory meter card.

When needed: Required to verify the unit is operationally powered; submit if the unit has a dedicated factory electrical connection

Tip: The meter must be in the name of the enterprise. Ensure the sanctioned load is appropriate for the manufacturing activity stated in the Udyam certificate.

First Commercial Sale InvoiceOptional

The initial bill of sale for finished goods manufactured at the unit, used to officially timestamp the date commercial operations commenced.

When needed: Required once commercial production has commenced — submit as part of the Second Installment claim (50% production capacity milestone)

Tip: This invoice is critical for determining the "date of commercial production" and establishing the eligibility window for the claim. The claim must typically be filed within a defined period from this date.

Environmental Clearances / Consent to OperateOptional

Consent to Establish and Consent to Operate from the UP Pollution Control Board, plus any sector-specific environmental clearances required for the manufacturing activity.

When needed: Required if the manufacturing activity requires environmental clearance from the UP Pollution Control Board

Tip: Required for manufacturing processes involving emissions, effluents, or hazardous materials. Check with the UP Pollution Control Board for applicability to your NIC code.

How to apply for UP MSME 2022

Download the Sandes app and create a profile using your registered mobile number. The MSME 1-Connect portal uses Sandes for OTP-based verification — you will not be able to register or log in without an active Sandes profile.Open portal

Register on the MSME 1-Connect platform. Select "Login / Registration", supply basic corporate identifiers (enterprise name, Udyam number, PAN), verify your mobile via Sandes OTP, and set up your login credentials.Open portal

Log in to MSME 1-Connect. Navigate to "Apply for LOC date", choose the "MSME Policy 2022" pathway, and use the Incentive Calculator on Nivesh Mitra to estimate your eligible subsidy based on your region (Bundelkhand/Purvanchal or Madhyanchal/Paschimanchal) and enterprise size (Micro/Small/Medium) before proceeding.Open portal

Fill the capital incentive form with all industrial statistics: Fixed Capital Investment (land limited to 10% of FCI, building, plant & machinery), date of commencement, employment details, and banking information for disbursement.Open portal

Upload all required documents: Sandes-verified mobile proof, Udyam certificate, constitution proof, PAN & GSTIN, land/lease deed, term loan sanction letter, and CA certificate on FCI. Also upload conditional documents as applicable (special category certificate, chartered engineer's certificate, power sanction letter, environmental clearances).Open portal

Submit the form and save the auto-generated system receipt / tracking code. Track application status on the Nivesh Mitra portal using this code. Sandes OTP may be required at submission.Open portal

District Industries & Enterprise Promotion Centre (DIEPC) reviews your documentation and conducts a physical site inspection to verify all invoiced plant and machinery are installed and operational. Address any queries or document deficiencies promptly to avoid application reversion.

The case moves through three committee levels: District-level Committee (DLC) → Divisional-level Committee → State-level Committee (SLC). Once SLC grants final approval, subsidy is disbursed electronically in two instalments: Instalment 1 (50%) after factory construction is complete; Instalment 2 (50%) after the unit reaches at least 50% of its planned commercial production capacity.Open portal

Does your startup qualify for UP MSME 2022?

Answer a few questions about your company and get a personalised eligibility report across all active government schemes — including UP MSME 2022.

Check your eligibility — free

Frequently asked questions

Who is eligible for UP MSME 2022?

UP MSME 2022 is available to Private Limited, LLP, Proprietorship, Partnership Firm companies at the Early Stage (Revenue < ₹1Cr), Growth Stage (₹1Cr–₹25Cr), Scaling (₹25Cr+) stage, across Uttar Pradesh. Udyam (MSME) registration is required.

How much funding does UP MSME 2022 provide?

UP MSME 2022 provides up to ₹4.0Cr. Most applicants receive around ₹20.0L.

How long does UP MSME 2022 approval take?

The typical processing time from submission to disbursement is 6–16 weeks.

Is UP MSME 2022 currently accepting applications?

Yes, UP MSME 2022 is currently active and accepting applications.

Do I need Udyam registration for UP MSME 2022?

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.