Government of India Initiative
Scheme for Promotion and Investment in Circular Economy
The SPICE Scheme is a government initiative aimed at empowering small businesses to adopt sustainable practices, promote recycling, and contribute to a greener, more sustainable future. The scheme is designed to support the transition from a linear "take-make-dispose" model to a circular economy, where resources are reused, recycled, and repurposed to minimize waste and environmental impact.
- Credit-Linked Capital Subsidy for eligible MSEs
- 25% Capital Subsidy up to ₹12.5 Lakh
- Machinery & Equipment up to ₹50 Lakh
- Term Loan ₹5 L – ₹1 Cr — mandatory for eligibility
- Nil Collateral under CGTMSE cover
25%
Capital Subsidy
On eligible machinery investment
₹12.5 L
Maximum Subsidy
Per eligible enterprise
₹5 L – ₹1 Cr
Term Loan Range
Minimum to maximum admissible
Nil
Collateral under CGTMSE
Hypothecation of P&M only
Objectives & Eligible Activities
The scheme encourages MSEs to adopt resource-efficient and environmentally friendly processes across manufacturing
Objectives
- Promote Sustainable Business Practices: Encourage micro and small enterprises (MSEs) to integrate resource-efficient and environmentally friendly processes into their operations.
- Facilitate Waste Recycling: Support businesses in adopting technologies and processes for recycling waste and utilizing by-products.
- Drive Green Investments: Attract investments in circular economy projects, fostering innovation and job creation in sustainable sectors.
- Contribute to National Green Goals: Align with India's commitment to environmental protection and sustainable development.
Eligible Activities
The scheme supports a wide range of activities, including but not limited to:
- Adoption of cleaner production technologies
- Setting up recycling units or facilities
- Upgrading equipment for resource efficiency
- Implementing waste management and by-product utilization systems
- Developing innovative products from recycled materials
Eligible Beneficiaries
- Existing Micro and Small Enterprises (MSEs) engaged in manufacturing activities across India.
- Enterprises looking to implement circular economy practices, such as recycling, waste management, and resource efficiency.
Eligible Components
- Machinery & Equipment: Purchase and installation of machinery for recycling, waste processing, and resource efficiency.
- Technology Upgradation: Adoption of advanced and sustainable technologies.
- Infrastructure Development: Setting up or upgrading facilities to support circular economy operations.
- Capacity Building: Training and skill development for employees in sustainable practices.
Scheme at a Glance
Quick reference of all key scheme parameters
| Scheme Name | Scheme for Promotion and Investment in Circular Economy |
|---|---|
| Objective of the Scheme | Empowering small businesses to adopt sustainable practices, recycle waste, and contribute to a greener future. |
| Eligible Beneficiaries | Existing Micro and Small Enterprises (MSEs) — Manufacturing Industry all over India. |
| Eligible Activity |
|
| Eligible Components |
|
| Applicable Benefits |
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Critical Compliance Details
Key rules, thresholds and obligations every SPICE applicant must know before applying
Official Mutual Exclusion Clause (Anti-Stacking Policy)
As per SIDBI guidelines, an enterprise unit can choose to leverage either the green-focused MSE-GIFT Scheme or the circular economy-focused MSE-SPICE Scheme. Benefiting from both sub-schemes simultaneously is strictly prohibited.
| Scheme Parameter | Official Banking & SIDBI Mandate |
|---|---|
| Credit Linkage Rule | Subsidy is only applicable to capital machinery backed by formal financial institution term loans. Self-funded asset procurement does not qualify. |
| Term Loan Boundaries | Eligible loan applications must maintain a minimum threshold of ₹5.00 Lakhs up to an upper limit of ₹1.00 Crore. |
| Subsidy Calculation Boundary | The maximum admissible machine cost for calculating the exact 25% subsidy is mathematically capped at ₹50 Lakhs. While total project costs can exceed ₹50 Lakhs, the subsidy payout is strictly limited to the ₹12.50 Lakhs ceiling. |
| Collateral Obligations | Nil collateral requirement applies if the underlying transaction opts into the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) hybrid coverage grid. |
| Primary Security Asset | Hypothecation remains confined strictly to the physical plant, tooling, or circular-machinery components financed via the loan. |
Required Onboarding Artifacts
Essential documents per official SIDBI guidelines — must be submitted during application
Financial Documentation
- Past 3 years of audited balance sheets demonstrating operational performance.
- Profit & Loss statements and cash flow records for the last 3 financial years.
- CA Certificate validating turnover and financial health.
Operational & Impact Data
- Precise Installed Capacity details — current and proposed.
- Projected Incremental Benefits — e.g., carbon reductions, metric tons of waste diverted, water saved.
- Detailed Project Report (DPR) covering technical and financial feasibility.
Machinery & Equipment
- Itemised machinery invoices with clear cost breakdown.
- Engineering specifications and technical datasheets for each equipment.
- Supplier quotations with GST details.
Statutory & KYC Documents
- Udyam Registration Certificate (MSME).
- PAN, GST registration, Aadhaar of promoters.
- Land documents / lease deed and building plan approval.
- Pollution NOC / consent from State Pollution Control Board.
- Bank sanction letter for the term loan.
Applicable Benefits
25%
Capital Subsidy on eligible machinery investment
₹12.5 L
Maximum subsidy per eligible enterprise
- Subsidies: Financial assistance in the form of subsidies for eligible investments.
- Technical Support: Guidance on adopting best practices and technologies for the circular economy.
- Consultancy Services: End-to-end support for assessing eligibility, preparing project reports, and submitting applications.
How to Apply
Simple 4-step journey to avail SPICE Scheme benefits
Application Steps
- 1Eligibility Assessment: Evaluate your business's eligibility for the scheme.
- 2Documentation: Prepare necessary documents such as business registration, financial statements, project reports, and compliance certificates.
- 3Application Submission: Submit your application through the designated government portal or with the help of a consultancy service.
- 4Approval & Disbursement: Upon approval, receive financial and technical support to implement your circular economy project.
Why Choose SPICE Scheme?
- Direct Capital Support: Credit-linked subsidy reduces your effective project cost.
- Aligned with Green Goals: Contribute to India's circular economy and sustainability commitments.
- Technology Upgradation: Financial support to adopt advanced, resource-efficient machinery.
- Waste-to-Value: Turn waste and by-products into new revenue streams.
- Term-Loan Linked: Structured, bankable financing path for growth.
- Nationwide Coverage: Open to eligible MSEs across all Indian states.
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Complete explanation of the SPICE Scheme by Amplus Subsidy Solutions
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Frequently Asked Questions
Got any questions? Find quick answers below.
Who is eligible to apply for the scheme?
All Micro and Small Enterprises (MSEs) registered with the UDYAM portal of the Ministry of MSME are eligible. The enterprise must also comply with Extended Producer Responsibility (EPR) and waste recycling targets in one of the 11 identified circular economy sectors.
What is the maximum subsidy available under the SPICE Scheme?
A 25% Capital Subsidy on eligible machinery & equipment investment, subject to a maximum of ₹12.5 Lakh per enterprise.
What are the term loan thresholds?
The scheme is credit-linked, so a formal bank/financial institution term loan is mandatory. The loan amount must be a minimum of ₹5.00 Lakhs and can go up to a maximum of ₹1.00 Crore. Self-funded asset purchase is not eligible.
Is the machinery cost limit of ₹50 Lakhs a hard cap on the whole project?
No. The ₹50 Lakhs cap applies only to the eligible machine cost for calculating the 25% subsidy. Your total project cost can exceed ₹50 Lakhs — but the subsidy payout remains fixed at the ₹12.50 Lakhs ceiling.
Can I claim both MSE-GIFT and MSE-SPICE schemes?
No. As per SIDBI guidelines, an enterprise unit must choose either the green-focused MSE-GIFT Scheme or the circular economy-focused MSE-SPICE Scheme. Benefiting from both simultaneously is strictly prohibited.
What collateral is required?
Nil collateral is required if the credit line is covered under the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) Trust Cover. The primary security is strictly limited to hypothecation of the newly acquired plant & machinery financed by the term loan.
What documents are required during onboarding?
Key documents include: past 3 years' audited balance sheets, installed capacity details, projected incremental benefits (carbon reduction, waste diverted), itemised machinery invoices with engineering specifications, Udyam registration, bank sanction letter, land documents, and Pollution NOC.
Which sectors/activities are covered?
Manufacturing enterprises adopting waste management, cleaner production technologies, recycling units, resource-efficiency upgrades, by-product utilization, and innovative products from recycled materials.
What is the application process?
Step 1: Eligibility assessment → Step 2: Documentation → Step 3: Submission via the designated government portal → Step 4: Approval & disbursement. Expert consultancy support is available at every step.
How can Amplus Subsidy Solutions help?
We provide end-to-end consultancy — from eligibility assessment, DPR preparation, and documentation to application filing and post-approval follow-up for subsidy disbursement.
Disclaimer: The information provided on this page is for general awareness and preliminary guidance. Scheme terms, eligibility, subsidy percentage, caps, term loan thresholds, collateral rules, and application procedures are subject to changes issued by the Government of India / Ministry of MSME / SIDBI / partner banks through notifications and guidelines from time to time. Applicants should verify the latest official guidelines and confirm details with the implementing authority before applying.