Figure 1: Indian leather craftsman assembling a shoe inside a modern production facility. [AI Generated]
Can you get government funding to modernize your leather and footwear manufacturing unit?
Yes, you can secure substantial government subsidies to upgrade your manufacturing infrastructure through the Integrated Development of Leather Sector (IDLS) sub-scheme under the Indian Footwear and Leather Development Programme (IFLDP) (NSWS Portal). The programme provides backend investment grants covering 20% to 40% of the cost of new plant and machinery to help you scale production and modernize technology (NSWS Portal). All applications must be submitted online through the National Single Window System (NSWS) (NSWS Portal).
Who it's for
This scheme is designed for Indian entrepreneurs, Micro, Small, and Medium Enterprises (MSMEs), and larger industrial units involved in the manufacturing of footwear, leather products, saddlery, and related components (Cabinet Release). Whether you are establishing a brand-new manufacturing unit or upgrading an existing tannery, assembly line, or accessories workshop, you can apply for these technology grants.
What you get
On 19 January 2022, the Union Cabinet approved the continuation of the IFLDP with a total financial outlay of ₹1,700 crore through 31 March 2026 (Cabinet Release). Under the IDLS sub-scheme, the government provides financial subsidies based on the cost of your eligible plant and machinery:
- MSME Units: You get a 30% subsidy on the landed cost of new plant and machinery, which increases to 40% if your manufacturing unit is located in the North Eastern region (NSWS Portal).
- Non-MSME Units: You receive a 20% subsidy on new plant and machinery, which increases to 30% in the North Eastern region (NSWS Portal).
- Domestic Procurement Incentive: You receive an additional 5% subsidy on top of the standard rates if you purchase machinery manufactured domestically in India (NSWS Portal).
- Subsidy Limit: The maximum financial grant you can claim under this scheme is capped at ₹15 crore per project (NSWS Portal).
The eligible cost calculations cover the machine's invoice value, applicable Goods and Services Tax (GST), transportation, customs duties, transit insurance, and installation charges (with installation capped at 5% of the machine's landed cost) (NSWS Portal).
Figure 2: Explainer: How to Access Machinery Subsidies under the Indian Footwear and Leather Development Programme (IFLDP) funding, eligibility, and process milestone roadmap. [AI Generated]
How it works
The IDLS scheme operates as a backend investment grant, meaning you must first secure the machinery and demonstrate operational compliance before the subsidy is disbursed to your bank account (NSWS Portal). To access the grant, you must register your business on the National Single Window System, complete the Common Application Form, and submit a detailed project proposal (NSWS Portal). A designated project appraisal committee under the Department for Promotion of Industry and Internal Trade (DPIIT) reviews the machinery specifications, verifies your employment plans, and approves the subsidy sanction (NSWS Portal).
What you'll need
To submit a successful application, you must prepare the following credentials and documents:
- Registration Certificates: Udyam Registration (for MSMEs) or Industrial Entrepreneur Memorandum (IEM) for larger enterprises (NSWS Portal).
- Machinery Quotes: Invoices or proforma quotes detailing technical specifications for brand-new plant and machinery.
- Proof of Finance: A bank loan sanction letter or self-funding validation showing you have the capital to purchase the machinery upfront (NSWS Portal).
- EPFO Registration: Existing Employee Provident Fund Organisation (EPFO) registration details to verify your current workforce size (NSWS Portal).
- Employment Plan: A commitment plan detailing how the new investment will generate local employment.
Important constraints
When planning your machinery acquisition, keep these critical policy constraints in mind:
- No Second-Hand Equipment: The scheme strictly excludes used or refurbished machinery; only brand-new equipment qualifies for the subsidy (NSWS Portal).
- Employment Ratio Targets: You must meet minimum job creation thresholds relative to your investment size. For footwear, garment, and saddlery units, you must generate at least 250 new jobs per ₹1 crore of machinery investment (NSWS Portal). For accessory and component units, the threshold is 150 jobs per ₹1 crore (NSWS Portal).
- Limited Timeline: While the Cabinet approved the IFLDP framework through 31 March 2026, individual sub-scheme application portals on the NSWS can close early if the allocated sub-scheme budget cap is reached (NSWS Portal). You should apply as early in your expansion phase as possible.
Next step
Navigate to the National Single Window System portal to create your developer account and begin your Common Application Form, or check your eligibility requirements on NirmanKit.