Viksit Gujarat Industrial Policy 2026

Capital Subsidy in Gujarat under the Viksit Gujarat Industrial Policy 2026

Gujarat now pays manufacturing MSMEs 25% to 35% of their Eligible Fixed Capital Investment (EFCI) as capital subsidy, and Large, Mega and Ultra Mega units 10% to 35% — for units that start commercial production between 1 June 2026 and 31 May 2031.

20+ years in Gujarat incentives300+ projects99% filing success

Capital subsidy as a share of eligible fixed capital investment (EFCI): 35% for MSMEs in Category-A talukas, 25% to 30% in Category B, and 10% to 35% for Large, Mega and Ultra Mega units.

  • 25–35%of EFCI for MSMEs
  • 10–35%Large, Mega & Ultra Mega
  • 1 yrmicro units get it all in one year
Source GRsPDFMSME scheme GR 25.09.2026PDFLarge & Mega scheme GR 08.09.2026PDFTaluka category GR 08.09.2026Source: Industries & Mines Dept, Govt of Gujarat · Reviewed by NeoApex Saver, 6 Oct 2026
On this page
  1. At a glance
  2. Rates by size and taluka
  3. One ceiling, three components
  4. Calculator
  5. Worked examples
  6. What counts in EFCI
  7. Who is eligible
  8. Category A or B
  9. How to claim
  10. Old scheme or new
  11. Where claims get cut
  12. How we help
  13. Industrial areas
  14. FAQs
  15. Download the GRs
At a glance

Capital subsidy under VGIP 2026, in brief

Capital subsidy under the Viksit Gujarat Industrial Policy 2026 is a grant worked out as a percentage of your Eligible Fixed Capital Investment (EFCI): 25% or 35% for MSMEs (30% or 35% in selected thrust sectors) and 10% to 35% for Large, Mega and Ultra Mega units, paid within annual and combined ceilings. It is calculated on your investment, not your loan, and paid only after commercial production starts.

What is a capital subsidy? A government grant that returns part of what a manufacturer spends on fixed assets — new building, plant and machinery, utilities and certain project infrastructure. In VGIP 2026 it is Component-1 of a three-part package; interest subsidy and power tariff subsidy are the other two, and all three share one combined ceiling.

Operative period
1 June 2026 to 31 May 2031
Calculated on
EFCI: building, plant & machinery and related assets acquired and paid for from 1 January 2026. Land is excluded.
MSME rate
25% of EFCI in Category-B talukas, 35% in Category A; 30% / 35% in selected thrust sectors
Large and above
10% to 35% of EFCI by size (Large, Mega, Ultra Mega), sector and taluka
Paid
Micro — in one year. Small & medium — over five years. Large, Mega & Ultra Mega — equal annual instalments over 8, 10 or 12 years.
First deadline
MSMEs: eligibility certificate within six months of the date of commercial production, or of 25 September 2026 if later. Large units: registration before production starts (or by 8 December 2026, if later), then PEC within three months of production, registration or 8 September 2026, whichever is latest.
Rates

Capital subsidy rates by size, sector and taluka

MSMEs get 25% of EFCI in Category-B talukas and 35% in Category A — 30% and 35% in the five selected thrust sectors — in one year for micro units and over five years for small and medium. Units with more than ₹125 crore in plant & machinery come under the Large, Mega and Ultra Mega scheme: 10% to 35% of EFCI in equal annual instalments over 8 to 12 years.

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Capital subsidy for MSMEsGR No. IMD/WRT/e-file/9/2026/2630/CH dated 25.09.2026, paras 4.2 and 4.3
TalukaMicroSmall & mediumCombined ceiling*
General sectors
Category A35% of EFCIpaid in one year35% of EFCIpaid over five years45%over five years
Category B25% of EFCIpaid in one year25% of EFCIpaid over five years35%over five years
Selected thrust sectors
Category A35% of EFCIpaid in one year35% of EFCIpaid over five years50%over five years
Category B30% of EFCIpaid in one year30% of EFCIpaid over five years45%over five years

*Capital, interest and power tariff subsidy together, as a share of EFCI, over five years from the date of commercial production. Size is judged on gross fixed capital investment in plant & machinery across all your units in India — micro up to ₹2.5 crore, small up to ₹25 crore, medium up to ₹125 crore. Each year the three components together are limited to 9% of EFCI in Category A and 7% in Category B for small and medium units (10% / 9% in selected thrust sectors); micro units 37% / 27% in Year 1 (38% / 33%), then 2% a year (3%). Nothing cut by an annual ceiling carries forward.

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Capital subsidy for Large, Mega & Ultra Mega unitsGR No. IMD/WRT/e-file/9/2026/2320/I dated 08.09.2026, paras 4B–4H · shown as Category A / Category B
CategoryCapitalPaid overCeilingPer yearMax / year
LargeGeneral sectors15% / 10%10 years20% / 15%2% / 1.5%₹150 crore
LargeThrust sectors25% / 15%8 years35% / 25%4.5% / 3.5%₹300 crore
MegaThrust sectors25% / 20%10 years35% / 30%3.5% / 3%₹750 crore
Ultra MegaThrust sectors30% / 25%12 years40% / 35%3.5% / 3%₹1,250 crore
LargeSelected thrust sectors35% / 30%8 years50% / 45%6.5% / 6%₹300 crore
MegaSelected thrust sectors35% / 30%10 years50% / 45%5% / 4.5%₹750 crore
Ultra MegaSelected thrust sectors35% / 30%12 years50% / 45%4.5% / 4%₹1,250 crore

“Ceiling” is the combined ceiling for capital, interest and power tariff subsidy; “Per year” is the annual ceiling as a share of EFCI; “Max / year” is the absolute annual ceiling in rupees. No carry-forward in any category. Large means more than ₹125 crore in plant & machinery. Mega (thrust sectors only) needs at least ₹1,000 crore of gross fixed capital investment and 250 direct employees, plus 50 more for every additional ₹200 crore; Ultra Mega at least ₹10,000 crore and 3,000 direct employees, plus 500 more for every additional ₹5,000 crore. A project that misses the employment test is assessed as Large in its sector; Mega and Ultra Mega projects can also be offered a customised package by the High Powered Committee chaired by the Chief Minister.

Thrust and selected thrust sectors

The 16 thrust sectors in Annexure-A of the Large GR (the scheme committee can add others) lift Large units to higher rates; together with the selected thrust sectors, they are the only route to Mega and Ultra Mega status. The five selected thrust sectors (highlighted) carry the highest rates at every size — for MSMEs they are the only sectors with higher rates.

  • Green energy & battery storage
  • Mobility, EVs & auto components
  • Capital equipment, wires & cables
  • Metals, minerals, ceramics & glass
  • Textiles & apparel
  • Sustainability & recycling equipment
  • Agro & food processing
  • Chemicals & petrochemicals*
  • Healthcare, medical devices & pharma*
  • Semiconductor ancillaries
  • Nuclear power equipment
  • Vehicle scrapping
  • E-waste recycling
  • Textile-waste recycling
  • Shipping containers
  • Heavy earth-moving equipment
  • Selected: sports goods
  • Selected: toys
  • Selected: footwear
  • Selected: robots
  • Selected: drones

*Chemical and pharmaceutical units must have a captive effluent treatment plant or access to a CETP.

How the ceiling works

One ceiling, three components

Capital, interest and power tariff subsidy are not added on top of each other — they share one combined ceiling. Take the full capital subsidy and exactly 10% of EFCI is left for the other two in general sectors, 15% in selected thrust sectors, and only 5% for general-sector Large units.

MSME, Category Ageneral sectors
MSME, Category Bgeneral sectors
MSME, Category Aselected thrust
MSME, Category Bselected thrust
Large, Category Bgeneral sectors
0%10%20%30%40%50% of EFCI

Capital subsidyRoom for interest + power tariffBeyond the combined ceiling

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What is left after the full capital subsidyShare of EFCI still available for interest and power tariff subsidy · Category A / Category B
SegmentCapital subsidyCombined ceilingLeft for interest + power
MSME — general sectors35% / 25%45% / 35%10% of EFCI
MSME — selected thrust sectors35% / 30%50% / 45%15% of EFCI
Large — general sectors15% / 10%20% / 15%5% of EFCI
Large, Mega, Ultra Mega — thrust sectors25–30% / 15–25%35–40% / 25–35%10% of EFCI
Large, Mega, Ultra Mega — selected thrust35% / 30%50% / 45%15% of EFCI

The room is also rationed year by year. Assuming equal instalments of capital subsidy, a small or medium enterprise has about 2% of EFCI a year for interest and power tariff together (3% in selected thrust sectors); a general-sector Large unit has 0.5% a year, and nothing carries forward. Size the term loan and the expected power bill before the loan is sanctioned — see how the interest subsidy and power tariff subsidy fill that room.

Outside the ceiling: EPF reimbursement and electricity duty exemption are separate provisions of the GRs and do not use up this ceiling. Across all state and central schemes, total incentives cannot exceed your EFCI.

Calculator

Capital subsidy calculator

Pick your unit type, sector and taluka category, then enter your expected EFCI in ₹ crore. The estimate applies the GR rates, the combined ceiling and the annual ceilings shown above — and tells you how much room is left for interest and power tariff subsidy.

Taluka category

Don’t know where your taluka falls? Look it up in the taluka category GR (PDF, district-wise list) or read Category A or B below. Category A carries the higher rates; if in doubt, ask us to confirm it in writing.

Estimated capital subsidy

—

Enter your EFCI (in ₹ crore) to see the estimate.

  • Per year, if released in equal instalments—
  • Combined ceiling—
  • Left for interest + power tariff—
  • Usable per year for interest + power tariff—

Indicative only — not a sanction. EFCI is fixed after asset verification, and the Provisional Eligibility Certificate initially covers up to 40% of it.

Get this estimate checked
Illustrations

Worked examples

Three round-figure illustrations of how the rate, the payout schedule and the ceilings interact. Actual EFCI is fixed only after asset verification.

Small enterprise · Category B · general sector

A ₹10 crore plant in Sanand

Sanand (Ahmedabad) is a Category-B taluka. EFCI of ₹10 crore: ₹3 crore building and ₹7 crore plant & machinery.

  • Capital subsidy (25% of EFCI)₹2.5 crore
  • Per year, assuming equal instalments over five years₹50 lakh
  • Combined ceiling (35% of EFCI)₹3.5 crore
  • Left for interest + power tariff₹1 crore
  • Usable per year within the 7% annual ceiling₹20 lakh

While the capital subsidy is being paid, interest and power tariff subsidy together cannot exceed about ₹20 lakh a year — plan the term loan around that.

Micro enterprise · Category A · general sector

A ₹3 crore unit in Becharaji

Becharaji (Mehsana) is a Category-A taluka. EFCI of ₹3 crore: ₹2 crore plant & machinery and ₹1 crore building — still micro, because size is judged on plant & machinery alone.

  • Capital subsidy (35% of EFCI), paid in Year 1₹1.05 crore
  • Year-1 ceiling (37% of EFCI)₹1.11 crore
  • Room for interest + power tariff in Year 1₹6 lakh
  • Room in each of Years 2 to 5 (2% of EFCI)₹6 lakh
  • Combined ceiling over five years (45%)₹1.35 crore

Under the Aatmanirbhar Gujarat Scheme this unit would get no capital subsidy: that scheme pays it only to micro enterprises, defined there as plant & machinery up to ₹1 crore, and caps it at ₹10–35 lakh.

Large unit · Category B · general sector

A ₹500 crore project in the Dahej belt

Vagra taluka (Bharuch), home to the Dahej industrial belt, is Category B. EFCI of ₹500 crore in a general sector, with more than ₹125 crore in plant & machinery.

  • Capital subsidy (10% of EFCI)₹50 crore
  • Equal annual instalments over 10 years₹5 crore
  • Combined ceiling (15% of EFCI)₹75 crore
  • Left for interest + power tariff₹25 crore
  • Usable per year within the 1.5% annual ceiling₹2.5 crore

In a thrust sector such as capital equipment or chemicals, the Category-B capital subsidy would rise to 15% — ₹75 crore over 8 years.

The base

What counts in EFCI — and what doesn’t

EFCI is the base every percentage is applied to: new building, plant & machinery, utilities and some project infrastructure acquired and paid for from 1 January 2026 — never land, working capital or second-hand machinery.

Counts towards EFCI

  • New building, including the administrative block — at actual cost or the R&B Schedule of Rates, whichever is lower; compound wall, gates, internal roads, bore well, water tank and internal water and gas pipelines
  • New plant & machinery, utilities, dies and moulds, with transport, foundation, erection, installation and electrification
  • Captive power plant, in-premises vehicles and material handling, water purification or desalination, and pollution control plant
  • Technology, design, drawings and patents — up to 10% of EFCI in plant & machinery
  • DG sets up to 50% of connected load (maximum 5 MW for MSMEs, 25 MW for Large units)
  • Project infrastructure such as staff housing, feeder road, dedicated pipelines, a training centre and worker buses — 50% of cost for MSMEs; for Large units 100% inside the premises and 20% outside

Does not count

  • Land and land development
  • Working capital, goodwill, royalty, and preliminary and pre-operative expenses
  • Second-hand plant & machinery, imported or domestic
  • Interest capitalised during construction
  • Rented or leased assets — except constructed GIDC sheds, and for MSMEs a building they put up on their own land, a GIDC plot or land leased or rented for the incentive period
  • Power plants other than captive use within the premises, and renewable-energy plants for third-party sale; renovation, rehabilitation or rationalisation of an existing unit (for Large units, modernisation too)

How the final EFCI is fixed. It is the lowest of three figures:

  • the investment actually made;
  • the cost certified in the bank’s Project Completion Certificate;
  • the Commissionerate’s asset-verification report.

For a self-financed project it is the lower of a certificate from your statutory auditor, Chartered Accountant, Chartered Engineer or Company Secretary and the asset-verification report — which is why capital subsidy does not need a term loan.

Investment window · MSMEs
Assets acquired and paid for from 1 January 2026 until 12 months after the date of commercial production — 18 months if plant & machinery is above ₹50 crore
Investment window · Large and above
From 1 January 2026 until 18 months after the date of commercial production (up to ₹1,000 crore), 24 months (up to ₹10,000 crore), 36 months (up to ₹1,00,000 crore) or 48 months beyond that
Eligibility

Who is eligible: new units, expansion and diversification

New units qualify if they start commercial production within the operative period. Expansions and diversifications qualify only if they clear the GR’s investment and capacity tests.

New unit

Starts commercial production between 1 June 2026 and 31 May 2031, with Udyam Registration (MSMEs) or an IEM, MCA21 filing or other Government of India licence. Expanding at a different site also counts as a new unit if it keeps separate books and separately identifiable investment.

From 1 Jun 2026Separate books

Expansion at the same premises

Gross fixed capital investment (excluding land) up by at least 50%, at least 60% of it in plant & machinery, and installed capacity up by at least 50%. Small, medium and large units must also have used 75% of existing capacity in one of the three preceding financial years; micro units are exempt.

50%+ investment60%+ in P&M50%+ capacity

Diversification

A new product line at the same premises, with gross fixed capital investment up by at least 25% for micro and small units or 50% for medium and large units, at least 60% of it in plant & machinery.

25% or 50%+60%+ in P&M

For MSMEs, an expansion becomes eligible only one year after the existing unit’s project completion or date of commercial production, whichever is later, and only while the unit remains within the MSME definition. Large, Mega and Ultra Mega units can claim for an applied project at most twice in the operative period.

Location

Category A or Category B: why your taluka matters

Your taluka’s category sets the rate. Under the 2026 classification, 130 talukas are Category A, with the higher rates, and 138 are Category B.

130Category-A talukas

The higher rates — for example Dholera (Ahmedabad), Becharaji (Mehsana), Dahod, and every taluka of the Botad and Chhota Udepur districts.

138Category-B talukas

Most established industrial belts — for example Sanand, Vapi, Ankleshwar, Halol, Morbi, Rajkot and Vagra (Dahej).

The classification comes from GR No. IMD/HMR/e-file/9/2026/2211/I dated 8 September 2026, applies to every VGIP 2026 scheme and replaces the earlier three-way (Category I, II, III) system. A project spread across two talukas belongs to the one holding the largest share of its land. Newly created talukas can differ from their neighbours — Nanapodha, carved partly out of Vapi, Kaprada and Pardi, is Category A while Vapi is Category B — so we confirm the category for your exact location in writing before you file.

Download the taluka category list (GR annexure, PDF)District-wise list of all 268 talukas — find yours before you plan.

Process

How to claim capital subsidy: steps and deadlines

Capital subsidy is claimed after production starts, but every deadline runs from the date of commercial production — and the structuring has to happen before you invest.

  1. Register — Large, Mega and Ultra Mega units

    Registration with the Industries Commissionerate is mandatory, with the IEM, proof of land possession, GPCB consent to establish where applicable, the detailed project report and any term-loan sanction.

    Before production starts, or by 8 Dec 2026 if later
  2. Invest inside the eligible window and start production

    Acquire and pay for assets from 1 January 2026; after the date of commercial production, MSMEs have 12 or 18 months to complete the investment and Large projects 18 to 48 months. The date of commercial production (DoCP) is the date of the first commercial sale bill for the product the project was set up to make — for an expansion, the first sale bill from the new project.

    DoCP starts every clock
  3. Apply for the eligibility certificate

    Apply for a Provisional Eligibility Certificate (PEC), issued for up to 40% of EFCI, or go straight to the Final Eligibility Certificate (FEC) if the investment is complete.

    MSMEs: 6 months from DoCP (25 Mar 2027 at the earliest) · Large: 3 months from DoCP or registration (8 Dec 2026 at the earliest)
  4. Asset verification and sanction

    The Commissionerate verifies the assets and fixes EFCI. Micro and small units are sanctioned by the GM, District Industries Centre, medium units by the MSME Commissioner, and Large units by the committee for their investment size.

  5. Disbursement

    Micro units receive the subsidy in one year, small and medium units over five years, and Large units in equal annual instalments over 8 to 12 years. The unit must stay in continuous production for the whole incentive period.

Late is expensive. An MSME that files its FEC after the six-month limit, but within two years, has both the incentive period and the amount cut in proportion to the delay; after two years the claim is not entertained. For Large units the outer limit is one year.

Transition

Old scheme or new? Your six-month option window

If your unit had not started commercial production before 1 June 2026, you can opt for the old Aatmanirbhar Gujarat Scheme instead of VGIP 2026 by applying within six months of the relevant GR — by 25 March 2027 for MSMEs, 8 March 2027 for Large units — and only if commercial production starts by 4 October 2027. The choice is final; after the window, VGIP 2026 applies. A unit that started production before 1 June 2026 stays on the old scheme.

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Aatmanirbhar Gujarat Scheme vs VGIP 2026 — MSMEsKey differences for capital subsidy
Aatmanirbhar Gujarat (2022)VGIP 2026
Operative period5 Oct 2022 – 4 Oct 20271 Jun 2026 – 31 May 2031
MSME upper limit (plant & machinery)₹50 crore₹125 crore
Capital subsidy — who gets itMicro enterprises only (plant & machinery up to ₹1 crore)Micro, small and medium
Capital subsidy — amount10–25% of the term loan by taluka category, up to ₹10–35 lakh25–35% of EFCI (30–35% in selected thrust sectors)
Interest subsidy5–7% by taluka, up to ₹25–35 lakh a year, 5–7 years7% (8% for women, first-generation and start-up MSMEs), 5 years, up to 10% of EFCI (20% in selected thrust sectors)
Taluka categoriesThree (I, II, III)Two (A, B)

The better choice depends on your numbers: for some units the old scheme’s net SGST reimbursement may still outweigh the new capital subsidy. We model both before you exercise the option.

Avoid these

Where capital subsidy claims get cut

In our experience, capital subsidy is lost more often to procedure than to eligibility — a missed filing deadline, an asset bought outside the investment window or wrongly classified, or a condition breached after sanction.

  1. Filing late.Eligibility-certificate windows are six months for MSMEs and three for Large units; late FECs are cut in proportion.
  2. Assets outside the window, or the wrong costs.Anything paid for before 1 January 2026 or after the eligible investment period drops out of EFCI — as do land, working capital, pre-operative expenses, capitalised interest and second-hand machinery.
  3. An expansion that misses a test.Check the 50% investment, 60% machinery, 50% capacity and 75% utilisation tests before you invest.
  4. Employment conditions.At least 85% of all employees, and 60% of managers and supervisors, must be domiciled in Gujarat.
  5. Stopping production or stacking subsidies.The unit must stay in production unless a stoppage beyond its control is condoned; state and central incentives together cannot exceed EFCI. On breach, disbursed subsidy is recoverable with 18% interest a year.
NeoApex Saver

How we help with capital subsidy

NeoApex Saver Pvt Ltd (formerly Apex Consultants) has worked on Gujarat industrial incentives for over two decades. On a capital subsidy file we:

  • Confirm taluka category, MSME or Large status and sector against the GRs — in writing, before you commit capital
  • Model the capital, interest and power tariff mix within the combined and annual ceilings
  • Structure EFCI: which assets go in, which stay out, and the invoices and payment proofs behind each
  • File registration, PEC and FEC applications inside their windows, and support asset verification through to every instalment
20+years of Gujarat incentive work
300+projects filed
99%filing success rate
15+services we offer

Prepared by the NeoApex Saver advisory teamNeoApex Saver Pvt Ltd (formerly Apex Consultants) is a Gujarat government-incentive advisory based in Ahmedabad and Gandhinagar, led by Ashish Shah, Managing Director. Every VGIP 2026 figure on this page is taken from the Government Resolutions linked below; worked examples and calculator assumptions are ours.Last reviewed 6 October 2026 · Report a correction

Where we work

Capital subsidy across Gujarat’s industrial belts

For an MSME the capital subsidy is 25% of EFCI in a Category B taluka and 35% in Category A (10% to 35% for larger units), so the taluka decides the rate before the sector does. In the 2026 taluka list most of the established estates — Sanand and Bavla, Vatva and Naroda (Ahmedabad City), Kadi and Mehsana, Vadodara, Halol and Savli, Bharuch, Ankleshwar, Jhagadia and Vagra, Surat and Hazira (Chorasi), Vapi, Gandhidham, Anjar, Mundra and Bhuj — are listed as Category B, while Dholera, Netrang in Bharuch district and the tribal talukas of Narmada, Tapi and Chhota Udepur are Category A. Confirm the category in writing before you file; it is fixed by the plant’s location.

South Gujarat

Bharuch, Ankleshwar, Jhagadia, Panoli and Dahej; Surat, Hazira and Sachin; Vapi, Sarigam and Umbergaon. Chemical and pharma projects here are plant-and-machinery heavy, which is exactly what EFCI counts; a GIDC shed counts, a leased private factory does not. The ₹125 crore plant and machinery limit keeps many a ₹200 crore chemical project inside the MSME 25% rate.

Dahej · Jhagadia · AnkleshwarSurat · HaziraVapi · Sarigam

Ahmedabad belt

Sanand, Changodar, Bavla, Vatva and Naroda; Kadi, Mehsana, Becharaji and Mandal; Himmatnagar. Auto components, engineering and ceramics at 25%; the same investment inside the Dholera SIR, a Category A taluka, earns 35% — a ten-point gap for an identical project.

Sanand · ChangodarMehsana · BecharajiDholera · Himmatnagar

Vadodara

Vadodara, Halol, Savli, Waghodia and Nandesari. Capital goods and pharma units where building cost is high: the GR counts a new building at actual cost or the R&B schedule of rates, whichever is lower, so the SOR check decides a meaningful slice of EFCI here.

Halol · SavliWaghodia · Nandesari

Kutch

Gandhidham, Anjar, Mundra and Bhuj. Steel, pipes, timber and edible-oil plants close to the ports; land is often leased, which changes nothing because land never counts towards EFCI. Imported machinery counts at its cost including transport, foundation, erection and installation.

Gandhidham · AnjarMundra · Bhuj

Also served. Saurashtra — Rajkot, Morbi, Jamnagar, Bhavnagar and Surendranagar — where most industrial talukas are Category B and the arithmetic is the same.

  • Changodar
  • Vadodara
  • Savli
  • Jhagadia
  • Surat
  • Hazira
  • Jamnagar
  • Bhavnagar
  • Surendranagar
  • Gandhidham
  • Mundra
  • Anjar
  • Himmatnagar

Taluka categories are from GR IMD/HMR/e-file/9/2026/2211/I; the 2026 list replaced the earlier three-tier classification, so a category quoted from an older project report is worth re-checking.

FAQs

Capital subsidy in Gujarat: frequently asked questions

What is capital subsidy under the Viksit Gujarat Industrial Policy 2026?

Capital subsidy, also called a capital investment subsidy, is a grant worked out as a percentage of your Eligible Fixed Capital Investment (EFCI): 25% (Category B) or 35% (Category A) for MSMEs in general sectors, 30% or 35% in the five selected thrust sectors, and 10% to 35% for Large, Mega and Ultra Mega units, paid within annual and combined ceilings. It applies to units that start commercial production between 1 June 2026 and 31 May 2031.

Do I need a term loan to claim capital subsidy?

No. Under VGIP 2026 capital subsidy is calculated on EFCI, not on a loan. The MSME GR expressly covers self-financed projects, whose investment is certified by a statutory auditor, Chartered Accountant, Chartered Engineer or Company Secretary. A term loan matters only for the interest subsidy.

Is there a rupee limit on MSME capital subsidy?

The MSME GR sets capital subsidy only as a percentage of EFCI, within the combined and annual ceilings; it does not specify a separate rupee cap. Large, Mega and Ultra Mega units have absolute annual ceilings of ₹150 crore to ₹1,250 crore across all components.

Can I claim capital subsidy and interest subsidy together?

Yes. You can combine capital, interest and power tariff subsidy, but all three share one ceiling: 45% (Category A) or 35% (Category B) of EFCI for MSMEs, and 50% or 45% in selected thrust sectors. After the full capital subsidy, 10% of EFCI remains for interest and power tariff in general sectors and 15% in selected thrust sectors.

How do I know whether my taluka is Category A or B?

Check the annexure to GR No. IMD/HMR/e-file/9/2026/2211/I dated 8 September 2026, which lists 130 Category-A and 138 Category-B talukas across 34 districts. Most established industrial belts, such as Sanand, Vapi, Ankleshwar and Morbi, are Category B; Dholera and Becharaji are Category A.

Do MSMEs in thrust sectors like chemicals or textiles get a higher capital subsidy?

No. The MSME GR gives higher rates only to the five selected thrust sectors — sports goods, toys, footwear, robots and drones. The 16 thrust sectors in Annexure-A, such as chemicals, textiles and capital equipment, matter for Large, Mega and Ultra Mega units.

Does an expansion of an existing unit qualify?

Yes, if gross fixed capital investment (excluding land) rises by at least 50%, with at least 60% of it in plant and machinery, and installed capacity rises by at least 50%. Small, medium and large units must also have used at least 75% of existing capacity in one of the three preceding financial years. Renovation, rehabilitation or rationalisation alone does not qualify (for Large units, modernisation too).

What is the deadline to apply for capital subsidy?

MSMEs must apply for the Provisional or Final Eligibility Certificate within six months of the date of commercial production, or of 25 September 2026 if that is later. Large, Mega and Ultra Mega units must register with the Industries Commissionerate before production starts (or within three months of 8 September 2026, if later) and apply for the PEC within three months of production, the registration certificate or 8 September 2026, whichever is latest. Late final applications are accepted only with a proportionate cut. A unit that started production before 1 June 2026 stays under the Aatmanirbhar Gujarat Scheme.

Is land included in EFCI?

No. Land and land development, working capital, preliminary and pre-operative expenses, capitalised interest, second-hand machinery, and rented or leased machinery and buildings are excluded — though GIDC sheds count, and MSMEs can count a building they put up on land leased or rented for the incentive period. Units in selected thrust sectors, and Ultra Mega units, separately get 100% of the stamp duty and registration charges on project land reimbursed, outside EFCI.

Official documents

Download the Government Resolutions

Every VGIP 2026 figure on this page comes from three Government Resolutions of the Industries & Mines Department. Read them yourself — or send us your project and we will read them for you.

PDF32 pages · 3.4 MB

Scheme for assistance to MSMEs

GR No. IMD/WRT/e-file/9/2026/2630/CH · 25.09.2026

Capital, interest and power tariff subsidy, EPF, CGTMSE, rent and the other MSME components.

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PDF23 pages · 3 MB

Scheme for Assistance to Large, Mega and Ultra Mega Industries

GR No. IMD/WRT/e-file/9/2026/2320/I · 08.09.2026

Definitions, incentive matrices for every category, registration and PEC/FEC rules, thrust-sector list.

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PDF6 pages · 123 KB

Category-wise classification of talukas

GR No. IMD/HMR/e-file/9/2026/2211/I · 08.09.2026

District-wise annexure of the 130 Category-A and 138 Category-B talukas that set the rates.

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Sources. Industries & Mines Department, Government of Gujarat — the three Government Resolutions above, read in full. Old-scheme figures refer to the Aatmanirbhar Gujarat Scheme for assistance to MSMEs (GR MIS-102022-1271(1)-I(Ch) dated 05.10.2022). Rates are the maximums the GRs allow; your entitlement is fixed by the sanctioning authority after asset verification. Worked examples use round figures and our reading of the GRs’ ceilings. The MSME Commissioner may issue separate implementation guidelines (para 22.5 of the MSME GR); we update this page when they appear. Useful official portals: Industries Commissionerate, Gujarat and the Investor Facilitation Portal.

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