All schemes
Subsidy MSME

CLCSS — Credit Linked Capital Subsidy

15% capital subsidy for technology upgradation (max ₹15L)

Maximum benefit
₹15 L
Typical processing
60–120 days from loan disbursement to subsidy credit; depends on Nodal Agency processing
Apply on official portal

About this scheme

The Credit Linked Capital Subsidy Scheme (CLCSS) provides a 15% upfront capital subsidy on institutional finance availed by Micro and Small Enterprises for induction of well-established and improved technology in approved sub-sectors. Administered by the Office of Development Commissioner (MSME), the scheme covers 51 sub-sectors of manufacturing. Maximum subsidy is Rs. 15 lakh on a maximum eligible loan of Rs. 1 crore.

What you get

  • 15% capital subsidy on the eligible plant & machinery (upfront, credit-linked)
  • Maximum subsidy: Rs. 15 lakh (i.e., on machinery cost up to Rs. 1 crore)
  • Subsidy credited directly to the loan account, reducing outstanding principal
  • Applies to both new units and existing units upgrading to improved technology
  • Can be combined with CGTMSE (no collateral) and Stand-Up India schemes
  • No restriction on the residual loan amount — only the subsidy portion is capped
  • Once-in-a-lifetime per enterprise — you get one CLCSS subsidy per MSE

Who qualifies

Micro and Small Enterprises (MSEs) — proprietorships, partnerships, LLPs, private limited, OPCs — engaged in manufacturing in one of the 51 CLCSS-approved sub-sectors. The sub-sectors span Bio-tech, Chemicals, Dyes & Intermediates, Drugs & Pharma, Electronic Industry, Food Processing, Glass & Ceramic items, Leather products, Machine tools, Paints, Paper, Plastic moulded/extruded products, Rubber products, Textile machinery, Toys, Wood products and 35 more. The borrower must be Udyam-registered as Micro or Small. Loan must be from a recognised Primary Lending Institution (PLI) — SIDBI, NABARD, scheduled commercial banks, RRBs, NSIC, etc.

Industries (NIC divisions)
Food processingBeveragesTobaccoTextilesApparelLeatherWood productsPaperPrintingCoke / petroleumChemicalsPharmaPlastics / rubberNon-metallic mineralsBasic metalsFabricated metalsElectronics / computersElectrical equipmentMachineryMotor vehiclesOther transportFurnitureOther manufacturingRepair of equipment
Business types
ProprietorshipsPartnershipsPrivate LimitedLLPsOne Person Companies

Available across India (central scheme).

How to apply

  1. 1Identify approved technology and machinery vendor (vendor must be DIC/state-listed)
  2. 2Apply for term loan with a Primary Lending Institution; mention CLCSS subsidy is sought
  3. 3On loan sanction, lender requests CLCSS subsidy via the online portal (my.msme.gov.in)
  4. 4Nodal Agency (typically SIDBI or NABARD) verifies eligibility and forwards to MSME Ministry
  5. 5On approval, subsidy is released to the lender within 60–90 days of loan disbursement
  6. 6Lender credits subsidy to borrower's loan account — outstanding principal is reduced
  7. 7Continue regular EMI servicing on the reduced balance

Key terms and conditions

  • Subsidy is credit-linked — only borrowers with sanctioned loan from a PLI are eligible
  • No upfront cash to borrower — subsidy reduces loan principal
  • Three-year operational lock-in — closing the unit or selling machinery within 3 years requires subsidy refund
  • Subsidy is on plant & machinery only — not on land, building, or working capital
  • GST, transport, and installation costs included in eligible machinery cost

What disqualifies you

  • Medium enterprises are NOT eligible (only micro and small)
  • Services sector excluded — only the 51 manufacturing sub-sectors qualify
  • Second-hand machinery is not eligible — must be new and approved technology
  • Trading entities excluded — must be a manufacturing unit
  • Same beneficiary cannot claim CLCSS twice
  • Self-financed projects without a PLI loan are ineligible

Documents typically required

  • Udyam registration
  • Project report
  • Bank loan sanction
  • Machinery invoice
  • GST registration

Frequently asked questions

Q. My sub-sector is not in the 51 approved list — can I still apply?
No. CLCSS is restricted to the 51 listed sub-sectors. Check the official list at clcss.dcmsme.gov.in. Other sub-sectors may be eligible under different schemes like MSE-CDP or PM FME.
Q. Can I claim CLCSS on imported machinery?
Yes, imported machinery is eligible if it represents approved improved technology and is purchased through formal channels with proper invoicing.
Q. How much margin money do I need?
The bank requires you to bring at least 15-25% as margin. The CLCSS subsidy effectively reduces your loan burden after the fact — it does not substitute for margin money.
Q. What happens if I close my business within 3 years?
You will have to refund the CLCSS subsidy with interest. The Nodal Agency monitors compliance via the lender.

The content above is compiled from public information published by the scheme authority. Eligibility, benefits, and procedures are subject to change. Confirm details directly with the official portal before applying. BharatSeal does not process scheme applications.