Innovation is no longer optional for MSMEs—it’s essential for survival and growth. To support innovation, intellectual property creation, and entrepreneurship, the Government of India introduced the MSME Innovative Scheme. This flagship initiative brings multiple support programs under one umbrella to help MSMEs become more competitive, technology-driven, and future-ready.
This article explains the MSME Innovative Scheme in simple terms, focusing on how MSMEs can actually benefit from it.
What is the MSME Innovative Scheme?
The MSME Innovative Scheme is an initiative by the Ministry of Micro, Small and Medium Enterprises (MoMSME) that aims to promote innovation, research, incubation, and intellectual property rights (IPR) among MSMEs and startups.
Instead of running multiple scattered schemes, the government consolidated them into one integrated framework, making it easier for MSMEs to access support.
Objectives of the MSME Innovative Scheme
The scheme is designed with clear goals that directly benefit MSMEs:
- Encourage innovation and entrepreneurship
- Support commercialization of new ideas
- Promote IPR protection (patents, trademarks, designs)
- Strengthen incubation centers for MSMEs
- Improve competitiveness and sustainability of MSMEs
Key Components of the MSME Innovative Scheme
The MSME Innovative Scheme has three major components, each addressing a specific need of MSMEs.
1. Incubation Component
This component focuses on nurturing innovative business ideas. This vertical supports the “Proof of Concept” (PoC) stage. If you have an innovative idea but lack the machinery or laboratory to test it, this is for you.
Financial Aid: Up to ₹15 lakh per idea for nurturing innovative concepts.
Infrastructure Support: Up to ₹1 crore for Host Institutes (HIs) to purchase plant and machinery to help MSMEs with R&D.
How MSMEs benefit:
- Financial support for developing innovative ideas
- Access to MSME incubators and technical guidance
- Support for converting ideas into viable products or services
Ideal for:
- Early-stage entrepreneurs
- MSMEs with innovative product or process ideas
- Startups linked with MSME sector
2. Design Component
Good design improves market acceptance and brand value. This component helps MSMEs enhance their product design.
Financial Aid: The government contributes 75% (Micro) or 60% (Small & Medium) of the project cost, up to a maximum of ₹40 lakh.
Student Projects: Support for design work by students is also available up to ₹2.5 lakh.
Benefits for MSMEs:
- Financial assistance for professional design services
- Help in product redesign, packaging, and branding
- Improved product quality and market appeal
Result: Better customer acceptance, higher sales, and stronger brand identity.
3. IPR (Intellectual Property Rights) Component
Protecting innovation is crucial. This component supports MSMEs in securing their intellectual property.
Reimbursement Limits:
- Domestic Patent: Up to ₹1 lakh
- Foreign Patent: Up to ₹5 lakh
- Trademark: Up to ₹10,000
- GI Registration: Up to ₹2 lakh
Support provided:
- Reimbursement of expenses for patents, trademarks, and designs
- Awareness programs on IPR importance
- Assistance in domestic and international IPR filing
Why it matters for MSMEs:
- Prevents idea theft
- Builds business valuation
- Enables global expansion
Eligibility for MSME Innovative Scheme
To avail benefits under this scheme:
- The applicant must be a registered MSME
- The MSME should have a unique, innovative idea or product
- Startups associated with MSME incubators may also be eligible
- Compliance with scheme-specific guidelines is required
Why MSMEs Should Use the MSME Innovative Scheme
This scheme is a powerful growth tool for MSMEs because it:
- Reduces innovation and R&D costs
- Encourages technology adoption
- Supports idea-to-market journey
- Enhances competitiveness in domestic and global markets
- Aligns MSMEs with Make in India and Atmanirbhar Bharat
How to Apply: A Step-by-Step Guide
- Visit the Portal: Go to the official MSME Innovative Portal.
- Register: Log in using your Udyam Registration Number and mobile number.
- Choose Your Vertical: Select whether you are applying for Incubation, Design, or IPR reimbursement.
- Find a Host Institute (HI): For Incubation and Design, you must choose a recognized Host Institute (like an IIT, NIT, or MSME-DI) to guide your project.
- Submit Proposal: Upload your business plan, cost estimates, and necessary ID proofs.