MSME Innovative Scheme: Design Component

• Revenue-stage manufacturing, deeptech or AI startups incorporated for at least 3 years.

About this scheme

The MSME Innovative Scheme: Design Component is a pivotal central government initiative, spearheaded by the Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. This scheme addresses a critical need in India's manufacturing sector: the integration of professional design expertise to drive innovation and enhance global competitiveness. By empowering Micro, Small, and Medium Enterprises (MSMEs) with access to high-quality design services, the program aims to elevate product quality, functionality, and aesthetic appeal. This aligns with national goals such as 'Make in India' and 'Atmanirbhar Bharat,' ultimately supporting MSMEs in developing ground-breaking new products and significantly enhancing their existing offerings, thereby improving their market position and fostering a culture of continuous innovation. SIIC IIT Kanpur, the Startup Incubation and Innovation Centre at IIT Kanpur, serves as a prominent implementing agency. Renowned as one of India's oldest and most respected technology business incubators with a strong track record in nurturing deep-tech startups, SIIC IIT Kanpur plays a crucial role in facilitating this access, offering localized support and expertise particularly within its designated region, ensuring enterprises benefit effectively from the scheme.

For eligible manufacturing MSMEs, the scheme provides substantial financial assistance of up to INR 40 Lakhs per project. The Government of India contributes a significant portion of this funding: 75% for micro-enterprises and 60% for small and medium enterprises. This tiered support system ensures that smaller entities receive higher backing, acknowledging their greater need for financial aid. Funds are disbursed in a structured, milestone-based manner across three distinct project phases: 40% during the initial Strategy & Concept phase, which covers preliminary research and conceptualization; 30% for the Detail Design phase, focusing on technical specifications and prototypes; and the remaining 30% upon the Implementation phase completion, ensuring the design is brought to fruition.

The funding is versatile and can be utilized for various design-related activities, including product design, user experience (UX) design, prototyping design, and packaging design support. Beyond monetary aid, the program offers crucial non-monetary support by connecting MSMEs with professional design agencies empanelled under the scheme. This network ensures access to expert guidance, cutting-edge tools, and specialized resources essential for successful product development and enhancement. The scheme covers a broad range of domains such as Agriculture, Healthcare Devices, Power & IT, and general manufacturing, along with Service and Miscellaneous categories, demonstrating its wide applicability across India's industrial landscape.

Who can apply

• The applicant must be a Registered MSME with a valid Udyam Registration Certificate.
• This is fundamental to ensure the entity is officially recognized and falls within the scope of MSME definitions.
• The MSME must primarily operate within the manufacturing sector, as the scheme is specifically designed to boost manufacturing capabilities and innovation.
• The enterprise must have been incorporated for a minimum of 3 years; this criterion ensures a certain level of operational stability and experience, making it more likely that the MSME can effectively utilize the design support and bring innovative products to market.
• Furthermore, the MSME must demonstrate profitability in at least one of its last three financial years, indicating financial viability and a capacity for sustained growth.
• Finally, the project must involve a clear design component, focused on new product development or the enhancement of an existing product, directly aligning with the scheme's core objective of fostering design-led innovation.

Eligible entity types: Private Limited, LLP, Partnership, Proprietorship

Benefits & funding

• Up to INR 40 Lakhs per project (75% for micro, 60% for small/medium enterprises), disbursed across three phases.
• Funds can be used for product, UX, prototyping, and packaging design.
• Non-monetary benefits include connections to professional design agencies, expert guidance, cutting-edge tools, and localized support from SIIC IIT Kanpur for proposal refinement and navigating the application process.

How the application process works

The journey below is informational, compiled from the official program guidelines. Applications are submitted directly with Ministry of MSME, in your own name.

1. 1

   Applicants submit detailed proposals via the official MSME Innovative portal.

2. 2

   Proposals are evaluated based on their articulation of the design challenge, proposed solution, methodology, outcomes, and budget.

Documents checklist 1

• Udyam Registration Certificate

Need help getting these in order? IncorpX provides assistance for incorporation, DPIIT recognition, MSME and GST registrations along with document preparation.

Frequently asked questions