Phase II of the Capital Goods Competitiveness Scheme

Figure 1: Indian female engineer monitors advanced precision manufacturing on a modern factory floor. [AI Generated]

What is Phase II of the Capital Goods Competitiveness Scheme?

Phase II of the Capital Goods Competitiveness Scheme is a national ecosystem-building initiative by the Ministry of Heavy Industries to help domestic manufacturers design and build heavy machinery in India (MHI Portal). It has a total financial outlay of ₹1,207 crore, providing ₹975 crore in government budgetary support and ₹232 crore from industry contributions (PIB Release). Rather than handing out individual subsidies, the scheme funds shared infrastructure—like advanced research labs, common machining facility centres, and testing hubs—to lower the cost of technology development for you (PIB Release).

Who it's for

This scheme is designed for you if you operate in any of the following categories:

• Heavy equipment manufacturers: Companies manufacturing machine tools, plastic machinery, textile machinery, earthmoving equipment, or power metallurgy systems (PIB Release).
• Hardware startups and MSMEs: First-time founders needing precision prototyping, engineering validation, or advanced machining without buying expensive tools (PIB Release).
• Academic and research institutions: Universities or government labs partnering with an industry member to co-develop or commercialize new industrial technologies (PIB Release).

What you get

The scheme organizes support across six primary components to lower your technology and development costs:

• Advanced Centres of Excellence (CoEs): You can partner with academic institutions (such as the IITs or IISc) to co-develop advanced industrial technologies (PIB Release). For these joint research projects, the government provides up to 80% of the cost as a grant, requiring your consortium to cover the remaining 20% (MHI Portal).
• Common Engineering Facility Centres (CEFCs): You gain pay-per-use access to state-of-the-art tooling, rapid prototyping, and smart manufacturing setups, saving you from heavy upfront capital investments (PIB Release).
• Testing and Certification Centres: You can test and certify your heavy machinery locally at upgraded national test labs, avoiding the high cost and delay of shipping hardware prototypes abroad for global compliance (PIB Release).
• Technology Innovation Portals: You get free access to six online collaborative portals (TechNovuus, SANRACHNA, DRISHTI, ASPIRE, KITE, and SURGE) to identify technological gaps, find academic research partners, and explore technology-transfer opportunities (MHI Portal).
• Industry Accelerators: You can access specialised guidance and funding to transition your functional prototypes into mature, market-ready capital goods (PIB Release).
• Skill Development: You can enroll your workforce in specialized Industry 4.0 training programs and qualification packs (Level 6 and above) to operate next-generation industrial machinery (PIB Release).

Figure 2: Phase II of the Capital Goods Competitiveness Scheme funding, eligibility, and process milestone roadmap. [AI Generated]

How it works

To leverage the benefits under the scheme, you must follow these steps:

1. Identify the right portal: Visit and register on the Technology Innovation Portal corresponding to your sector (MHI Portal). Register on TechNovuus for mobility and automotive systems, SANRACHNA for heavy engineering and power equipment, DRISHTI for sensors and advanced manufacturing, ASPIRE for automotive design, KITE for robotics and machine tools, or SURGE for machine tool design.
2. Browse active challenges or post requirements: Search for active indigenization challenges or list your specific engineering/R&D gaps to invite solutions from academic researchers (MHI Portal).
3. Form a consortium: For R&D projects or setting up a new CEFC, team up with a premier academic or research institution. You must draft an agreement specifying intellectual property rights and commercialization plans (MHI Portal).
4. Submit a project proposal: Prepare and submit a Detailed Project Report (DPR) detailing your proposed technology development, funding requirement, and indigenization plan via the MHI portal (MHI Portal).
5. Clear committee review: The Project Review and Monitoring Committee (PRMC) will evaluate your proposal. Once approved, the government will release the grant in phases tied to project milestones (MHI Portal).
6. Access CEFCs and testing facilities: For direct testing or prototyping, locate the nearest Common Engineering Facility Centre or Testing Centre on the portals and book your time slots on a pay-per-use basis (PIB Release).

What you'll need

To participate in the scheme's programs, prepare the following documents and details:

• Company registration: Proof of incorporation in India as a registered company, LLP, DPIIT-recognized startup, or MSME (PIB Release).
• Consortium agreement: Signed MoU with your academic/research partner outlining the research scope and IP sharing (MHI Portal).
• Detailed Project Report (DPR): Technical blueprint showing the technology gap, indigenization target, cost estimates, timelines, and commercialization roadmap (MHI Portal).
• Financial capability proof: Audited financial statements or bank commitments proving you can fund the 20% industry contribution (MHI Portal).

Important constraints

Before submitting your application, note these constraints:

• No direct machinery purchase subsidy: This scheme does not fund the purchase of standard machinery for your individual factory floor (PIB Release). If you need a direct subsidy for upgrading your MSME plant, apply for the Credit-Linked Capital Subsidy Scheme (CLCSS) instead (MHI Portal).
• Demand-driven selection: Funding is not guaranteed upon submission; proposals are competitive and must be approved by the PRMC (PIB Release).
• Shared IP conditions: R&D grants are tied to academic partnership, meaning you must share intellectual property or licensing rights with the partnering institute according to the MHI guidelines (MHI Portal).

Next step

If you are planning to build advanced machinery, visit the official Ministry of Heavy Industries portal to read the full guidelines, or explore related resources on our Make in India scheme page to discover complementary startup benefits.