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Grant MSME

MSE-CDP — Cluster Development Programme

Up to ₹15 Cr cluster infrastructure for MSE clusters

Maximum benefit
₹15 Cr
Typical processing
12–18 months from DPR submission to first fund release; full project span 30–36 months
Apply on official portal

About this scheme

Micro & Small Enterprises Cluster Development Programme (MSE-CDP) is a Government scheme that funds cluster-level interventions for enhanced productivity, competitiveness, and capacity building. Common interventions include setting up Common Facility Centres (CFCs), upgrading infrastructure in industrial estates, and capacity building. Government grants up to 70% of project cost (90% in NER, J&K, hilly areas).

What you get

  • Common Facility Centre (CFC) funding: up to Rs. 15 crore per cluster (Government grant)
  • Government grant: 70% of project cost (90% in special category areas)
  • Beneficiary contribution: 30% (10% in special category) — typically pooled by member MSEs
  • Infrastructure upgradation in existing industrial estates: up to Rs. 10 crore
  • New industrial estate development: up to Rs. 15 crore
  • Capacity building: 90% Government funded
  • Convergence with other MSME schemes (CLCSS for individual machinery, SFURTI for traditional industries)

Who qualifies

Special Purpose Vehicle (SPV) representing a cluster of at least 20 MSEs (or 10 in NER/hilly/J&K) in manufacturing. The SPV must be a Section 8 company or registered cluster association/federation. Cluster Diagnostic Study (DSR) is mandatory — done by approved Implementing Agency. The cluster must demonstrate common needs (testing labs, common machinery, training facilities, packaging units, etc.) and member commitment to use the CFC.

Industries (NIC divisions)
Food processingBeveragesTobaccoTextilesApparelLeatherWood productsPaperPrintingCoke / petroleumChemicalsPharmaPlastics / rubberNon-metallic mineralsBasic metalsFabricated metalsElectronics / computersElectrical equipmentMachineryMotor vehiclesOther transportFurnitureOther manufacturingRepair of equipment
Business types
Section 8 Companies

Available across India (central scheme).

How to apply

  1. 1Identify cluster with at least 20 MSEs and common challenges
  2. 2Form an SPV (Section 8 company / cluster federation)
  3. 3Engage approved Implementing Agency (state MSME directorate, NSIC, etc.) for Cluster Diagnostic Study
  4. 4IA submits Detailed Project Report (DPR) to MSME Ministry
  5. 5Steering Committee approval; sanction issued
  6. 6Land acquisition (if needed) and construction over 18-24 months
  7. 7CFC commissioned and operational under SPV management
  8. 85-year sustainability monitoring by MoMSME

Key terms and conditions

  • 30% beneficiary contribution (10% in NER/J&K/hilly) — non-financeable
  • Funds released in 4 tranches based on project milestones
  • Annual user fee model — SPV operates CFC with usage charges from member MSEs
  • Sustainability plan mandatory — CFC must remain viable post-project
  • 5-year post-project compliance and reporting

What disqualifies you

  • Trading clusters not eligible — must be manufacturing
  • SPV with less than 20 MSEs (or 10 in special category) not eligible
  • Same cluster cannot get MSE-CDP funding twice within 10 years
  • Land must be unencumbered — disputed land disqualifies
  • Members must be Udyam-registered MSE — large enterprises cannot dilute the cluster

Documents typically required

  • SPV registration
  • Cluster diagnostic study
  • DPR
  • Land documents
  • Member list

Frequently asked questions

Q. Can my factory get MSE-CDP funding directly?
No — MSE-CDP funds clusters via SPVs, not individual units. You can be a member of an SPV that gets MSE-CDP funding for a Common Facility Centre.
Q. How many members do we need for an SPV?
Minimum 20 MSEs (10 for NER, J&K, hilly areas). All members must be Udyam-registered Micro or Small Enterprises in the same/related manufacturing sub-sector.
Q. What does the CFC actually provide?
Depends on cluster needs: testing labs, calibration equipment, design centres, common machinery (CNC, lasers), packaging units, training facilities, etc. Identified in Cluster Diagnostic Study.

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.