MSME Innovative Scheme

In this era of economic prosperity that we are currently experiencing, MSMEs have proven to be the backbone of the new India and its growth engine. They have sparked the modernization of the nation as a whole and continuously promote the growth of the nation’s infrastructure and technology. The foundation of the Indian economy is MSMEs. More than 6 crore MSMEs, which operate covertly in various regions across the nation, are essential to the development of a more powerful and independent India. The GDP of the nation is significantly impacted by these modest economic drivers.

MSMEs account for an astounding 30% of the nation’s GDP, 45% of its industrial output, and almost 48% of its exports. Additionally, the MSME sector employs more than 11 crore people.

MSME Innovative Scheme

The MSME Innovative Scheme combines the MSME Ministry’s Incubation, Design, and IPR Schemes. These formerly three schemes functioned as independent verticals with links and interflows. Additionally, these verticals will be sequentially and concurrently included in a single formulation to encourage and support new activities for increased synergy and efficiency.

This will serve as a focal point for innovation activities, facilitating and directing the development of concepts into workable business ideas that can directly benefit society and be effectively sold. MSME Innovative Champions is a comprehensive strategy that combines, coordinates, and converges three sub-schemes and interventions for a single goal. It will be usual for these sub-schemes to use the implementation agencies (Host Institutes, IISc, IITs, NITs, and IPFCs, etc.) to guide them from the earliest stage of idea ideation through handholding to business development to final growth and outreach.

Purpose of MSME Innovative Scheme

• To encourage innovation in all its manifestations along the whole value chain, from transforming concepts into novel applications through incubation and design interventions.
• To offer the proper resources and assistance for the concept to market development, design competitiveness, and protection and commercialization of intellectual property produced by the MSME sector.
• To encourage the sharing of knowledge and cooperation between business, academia, governmental organizations, research labs, etc. in order to foster innovation and creative problem-solving culture.
• To act as a bridge between innovators and leaders in industry and academics in order to promote the creation of innovative products and provide support.
• Must concentrate on creating low-cost inventions that are both sustainable and commercially successful, and that can help a lot of people.

How Incubation works in MSME Innovative Scheme?

The scheme’s main goal is to encourage and support untapped creativity and the use of cutting-edge technologies in MSMEs that want to have their ideas validated at the proof-of-concept stage. The programme encourages interaction with enablers who can help MSMEs grow their businesses by assisting with design, strategy, and execution.

Eligibility Criteria: Registration as Host Institute (HI)

Technical Colleges, Universities, other Professional Colleges/Institutes, R&D Institutes, NGOs engaged in incubation activities, MSME-DIs/ Technology Centers, or any Institute/Organization of Central/State Government may submit an application for registration as an HI and act as a Business Incubator (BI) for nurturing ideas through HIs/ BIs from the early stages of conceptualization to the commercialization stage. The institutions can use the MIS portal on the DC MSME website (https://innovative.msme.gov.in) to submit an application for registration as HI.

Approval of Ideas of Incubatees submitted through Host Institute (HI)

The HI may solicit ideas from MSME or other parties after receiving approval as HI for the Incubation Scheme, and following due diligence, may submit the chosen ideas using the MIS portal of the DC MSME website (https://innovative.msme.gov.in). According to the following process, a committee in the Ministry of MSME will assess and/or approve these concepts:

Phase 1: Host Institute (HI)

When the HI receives ideas from various incubatees, they must first have the ideas examined by professionals from various universities and companies. On the incubation portal (https://innovative.msme.gov.in), only the ideas that have been shortlisted may be uploaded.

Phase 2: First Stage Screening

The Project Management Unit (PMU) will conduct the first stage screening after receiving the HI’s shortlisted suggestions. Only those concepts that have been submitted along with the necessary paperwork and satisfy all requirements as outlined in the scheme criteria will be processed. The proposal will be subject to rejection if it is submitted with insufficient or inconsistent information, after which the programme division will double-check that no eligible ideas have been missed. The Domain Expert Selection Committees will then get the ideas that passed musters (DESCs).

Phase 3: Selection of Ideas by Domain Expert Selection Committee (DESC)

The ideas received would be segregated into the following five verticals, which will be evaluated by five DESCs.

These five Domain Expert Selection Committees (DESCs) will comprise experts from the Industry/Academia/Government in these five verticals. There will be a provision for honorarium for the experts. One expert from MSME DI and one member from the programme division for coordination will also constitute the DESC. DESCs will select the ideas from the ideas forwarded to them subsequent to the first stage screening.

S.No	Sector	Composition of DESC
	Agriculture, Rivers & Ocean Produce based industries, fertilizers, Agricultural Implements & Agro processing and any related sub-sector	1. Domain Experts from the industry/academia/government.2. One Expert from MSME DI3. One Member from ProgrammeDivision
	Healthcare & Life sciences, Medical Devices, Pharmaceuticals, Biotech, AYUSH and any related sub-sector	Same as above
	Power, Renewables, Electricals, Power Electronics, Energy Efficiency and any related sub-sector	Same as above
	Services, Education, Hospitality, Media, Publishing, Entertainment, Design, Wellness, Logistics, Sports and any related sub-sector	Same as above
	Miscellaneous Sector (Environment, Forests, Water & Sanitation; Foods, Beverages, FMCG, Consumer Goods; Infrastructure, Construction, Housing; IT, ITES, Electronics, White Goods, Telecommunication; Metals, Engineering, Machinery, Automation and Transportation,Automotive, E Vehicles, Railways, Aviation, UAV and any other sub-sector)	Same as above

The DESC will assess the proposals in accordance with the aforementioned criteria and choose proposals for submission to Project Monitoring and Advisory Committee (PMAC) for final approval. The number of ideas recommended must match the number of ideas submitted in order to guarantee that all the industries and verticals are fairly represented. The officer from the programme division will provide the cut-off ratio.

Phase 4: Project Monitoring and Advisory Committee (PMAC)

The DESC will assess the proposals in accordance with the aforementioned criteria and choose proposals for submission to PMAC for final approval. The number of ideas recommended must match the number of ideas submitted in order to guarantee that all the industries and verticals are fairly represented. The officer from the programme division will provide the cut-off ratio.

Financial Assistance to HI for developing and nurturing the ideas

HI will receive financial assistance up to a maximum of Rs. 15 lakh per idea. After PMAC has given the idea the green light, money will be disbursed. 15% of the total approved cost for any proposals approved by MSMEs or others will be paid for by them and deposited to the HIs. MoMSME would fund the remaining 85% up to a maximum of Rs. 15 lakh per idea. The Ministry of MSME will, however, cover the full cost of each proposal up to a maximum of Rs. 15 lakhs without requiring any payment from students.

Utilisation Certificate (UC) that has been properly approved by the responsible HI must then be provided; otherwise, the HI will be subject to penalties as determined by the Project Monitoring and Advisory Committee (PMAC) of the MoMSME. Additionally, the HI will be the subject of sporadic inspections and examinations by Ministry representatives, including MSME-DI (IA). In the event that an Incubatee abandons the idea or project incomplete, HI may continue the work/development by finding additional deserving Incubatees to finish the task. The Ministry will receive a reimbursement for the unused amount.

The following two payments will be made for the funds:

1. 70% of the authorized project cost, as shown in the table below, following PMAC approval of the concept and the execution of a contract between the Host Institute and Incubatee.
2. 30% of the approved project cost once the appropriate Implementing Agency has submitted a physical verification report and used 60% of the first installment.

Table: Indicative list of activities and likely expenditure for the idea/ project are as below (GoI assistance will be spent on pro-rata basis in the ratio of expenditure mentioned in the table below, if the assistance is less than Rs. 15 lakh): –

S.No	Items	Likely Expenditure(Rs in lakh)
	Technology related expenditure like machine usage charges, electricity charges, procurement of raw materials, testing/calibration charges and any other technology related expenditure essential for development of idea.	10.00
	Charges for mentors/handholding supporting team.	3.00
	Travelling Expenses or any other overhead/administrative expenditure not covered above may be allowed as per need for development of the idea.	2.00
	Total	15.00

Note: – After approval of idea/ project, variation up to 25 % of expenditure under various subheads is permitted within the total budget of maximum up to Rs. 15.00 lakh per idea.

Financial assistance for Plant and Machinery to HI up to Rs. 1.00 cr

For the purchase and installation of pertinent plant and machinery, including hardware and software, among other things, in BI for R&D activities and common facilities for incubatees of BI, financial assistance for plant and machinery to HI up to Rs. 1.00 cr. (maximum) shall be provided. The recipients of this assistance must have at least two concepts that have been accepted under the Incubation Scheme. The financial help will be used to purchase the necessary equipment to develop those expressly authorized ideas. Through the MIS portal of the DC MSME website (https://innovative.msme.gov.in), the HIs may post the proposal. A Domain Expert Selection Committee (DESC) that has been specifically established for the purpose will make recommendations to PMAC, which will then approve the proposal for the plant and machinery.

Mechanism of Selection, Disbursement and Management of Plant and Machinery Support Selection:

A Domain Expert Selection Committee (DESC), made up of various government officials, experts, and the industry, would be established to choose the recipients of the Plant and Support grant.

The proposed composition is as follows:

1. Joint Secretary, AFI, MoMSME, Chairman

2. Economic Adviser, MoMSME

3. Representative of Ministry of Heavy Industries

4. Representative of Niti Aayog dealing with AIC Programme

5. Representative of Ministry of Railways dealing with Plant and Machinery

6. Representative of IAs of MSME Innovative Scheme

7. Representative from MSME Associations (on rotation basis)

8. Any other member as decided by the Chairman, DESC

9. Director (T&P), MoMSME as Member Secretary of the Committee

Disbursement:

• This financial aid will be given upfront, and within nine months of the money’s release, the Utilisation Certificate for 50% of the grant will be given.
• The financial support would cover the capital as well as maintenance expenditure for the plant and machinery for a maximum of five years or until the validity of the scheme or whichever is earlier. 
• The complete UC for machinery and plant procurement and commissioning must be submitted within 18 months, failing which the HI will face penalties as determined by PMAC.
• If there are any expenses exceeding Rs. 1.00 crore, HI would cover these on its own. Other costs, such as those associated with purchasing land, buildings, or human resources, are not covered by this help.
• Any equipment or infrastructure that was already in place prior to obtaining financial assistance will not be taken into account. As a result, the HI must include a list of all current machinery, plants, and equipment with the application.

Implementation Mechanism

Each and every MSME-DI/TC shall serve as an implementing agency (IAs). The MSME DIs, however, will not be qualified for Grant in Aid under GFR. Any financial support provided to MSME DIs would come from budgetary support under the appropriate budget head.

Role of Implementing Agency (IA):

The IAs whose jurisdiction area the proposed HI will come under will receive the online requests for registration as HIs. If the proposal isn’t complete, IA will go back to HI to have it finished there in accordance with the scheme’s requirements. IAs will send its recommendation to the PMAC after physically verifying all the parameters entered into the application for registration by HIs. IA must submit its recommendation to PMAC within 15 days of receiving the complete proposal.

Before sending the proposal to the DC Office, the IA may be sent to the AICTE or UGC to request due diligence, affiliations, recognitions, complaints, grievances, current status, and clearance. The proposal should then be forwarded with their appropriate suggestion on the MIS portal.

IA will carry out all tasks in accordance with PMAC’s general instructions and within the framework of those instructions.

IA shall make sure that any project of an HI is completed within the parameters of the scheme after financial assistance to that project has been approved. IA will deliver a completion report and a closure report to the DC Office after the project is finished. IA should make sure HI doesn’t use any grant money for purposes other than those for which it has been approved.

All ideas should contain, inter-alia, following basic types of Innovation Processes:

• Marketing & Branding: Innovation related to the customer experience.
• Ideation: Innovation related to the product idea & concept.
• Technology: Innovation related to the product functionality.
• Co-creation: Innovation related to the customer involvement.
• Social Innovation: Innovation related to the corporate culture.
• Entrepreneurship: Innovation related to through entrepreneurial thinking.
• Open Innovation: Innovation related to with stakeholders.
• Business Model Innovation: Innovation related to the purpose and strategy.

DESIGN COMPONENT

The two main components of the design scheme are the design projects and the design awareness programme.

1. Design Project: Using interventions and consulting, to assist MSMEs in creating new design strategies and/or designing associated goods.
2. Design Awareness Programme: Through seminars, speeches, workshops, and other events, the goal is to increase public awareness of and sensitization to the importance and power of design for businesses. These programmes are meant to educate MSMEs about how design and innovation are used in various areas of their industry.

Eligibility Criteria

According to MSMED’s definition of a registered micro, small, or medium enterprise, the beneficiary unit(s) must normally possess a valid UAM or Udyam Registration. The PMAC can soften the standards so that manufacturing MSMEs can be profitable, ideally in at least one of the last three fiscal years. The industrial designers that a unit hires under this scheme should be qualified and have experience in that area. All pertinent documentation should be verified by implementing authorities.

Financial Assistance under Design Component

Design Project: Through interventions and consulting, assist MSMEs in creating innovative design strategies and/or relevant products. The designated IAs will accept design proposals from MSMEs. By establishing a suitable Project Assessment Panel (PAP) to evaluate these projects, the IAs will exercise due diligence. They will then submit the projects they recommend to MoMSME for PMAC approval. Following PMAC’s approval of the Design Project, funds will be made available.

The money provided under this activity will be used to pay for the costs associated with developing the prototype or product as well as the hiring of design consultants for design interventions. For design projects authorized for any MSME, the GoI will contribute up to a maximum of Rs. 40 lakh for 75% (Micro) and 60% (Small & Medium) of the entire project cost. The remaining project cost will be covered by MSMEs and deposited to the IA. Three stages of grants will cover the entire project cost:

• Stage 1 – Strategy & Concept- 40%
• Stage 2 – Detail Design – 30%
• Stage 3 – Successful Completion of the prototype/product and Final Report submission – 30%.

The IA is required to verify that the design project is finished within a year of receiving financial assistance and that the UC is presented in accordance. If the MSME abandons the project, the MoMSME’s Project Monitoring and Advisory Committee (PMAC) will decide what kind of punishment.

Student Design Project: All students at any AICTE/UGC-accredited institution may use this subcomponent. The suggested student design project must encourage student involvement in aiding MSMEs in developing their design capabilities. There are two approaches to involve students: either MSMEs seek students or students offer their services to MSMEs. MSME will use the Design Scheme portal (https://innovative.msme.gov.in) to submit the proposal for the student design project to the Implementation Agency.

This component offers financial help up to Rs. 2.5 lakh for the design work of genuine students. 75 percent of the overall project cost, up to a maximum of Rs. 2.5 lakh, would be covered by the GoI for student design projects that are authorized for any MSME, with the remaining project costs being covered by the MSME and deposited to the IA.

This permissible cost would comprise the student designer’s pay (where applicable until the project is completed), project-related transportation costs, documentation costs, and costs linked to the creation of a prototype, model, or product. The IAs will be quite specific about the project’s deliverables. The financial award will be repaid in the following ways, over the course of two stages:

• Stage 1 – Application approval – 50%
• Stage 2 – Successful Completion and Final Report Submission – 50%.

The IA must ensure completion of the design project within a period of one year of the receipt of financial assistance and UC is submitted accordingly. In case, the MSME drops out of the project, penalty will be imposed as decided by the Project Monitoring and Advisory Committee (PMAC) of MoMSME.

Project Selection Procedure

The MSME would use the IA to submit their application online on the site. After receiving the application, the IA will perform a preliminary assessment and may contact the applicant design Consultant/company and applicant MSME for additional information or clarification.

IA will submit the application and its recommendation to the Project Monitoring & Advisory Committee (PMAC) for review after screening. Before submitting a project proposal to the PMAC, it should first be debated and reviewed by the Project Assessment Panel (PAP).

The Project Assessment Panel (PAP) would be made up of MSME-DI representatives, experts, businesspeople, designers, academics, and industrialists. Its duties include evaluating applications and project budgets, providing recommendations, and keeping track of accepted applications.

It may be necessary for the applicant MSME and its project team members as well as the applicant design consultant/company/academic institution to attend assessment meetings in order to present their applications and respond to inquiries.

Assessment Criteria

In considering an application, due consideration, inter-alia, will be given to the following factors, wherever applicable:

• to what extent the project can help integrate design into business process;
• to what extent the project can help transform design activity into tradable deliverables
• that manifests exploitation and deployment in the form of intellectual property, which
• may comprise patent, copyright, know-how or industrial design;
• to what extent the project can add value to the products concerned and increase their competitiveness;
• to what extent the project can help commercialisation of new products and finding pathways to market;
• to what extent the project can contribute towards cost competitiveness, energy efficiency, environmental impact, process/product efficiency, quality enhancement, waste reduction, material optimisation, safety improvements, ergonomic and aesthetic enhancement;
• to what extent the project is innovative and unique;
• to what extent the project can exhibit upscaling and replication potential;
• to what extent the project can contribute towards import substitution/export enhancement;

The primary evaluation criterion would be based on the quantifiable benefits that a design intervention will bring to the MSME, either in absolute revenues (which would indicate increased profitability) or in percentage terms.

Implementation Mechanism 

Implementing Agencies (IAs):

Indian Institute of Science (IISc), Bengaluru, IITs (Kanpur, Indore, BHU, Roorkee, Ropar, Bhubaneshwar), and NITs (Tiruchirappalli, Warangal, Silchar, Arunachal Pradesh, Jaipur, Allahabad, J&K, Bhopal, Nagpur, Calicut, Kurukshetra, Surathkal, and Raipur) are currently the organisations responsible for These will continue to serve as implementing agencies, and more may be added, including reputable industrial design institutes, tool rooms, the Indian Institute of Technology (IIT), the National Institute of Technology (NIT), and others.

IAs will receive 15% of the GoI grant released under the Design/Student Projects category as implementation fees.

The following will be offered in phase two:

1. All IAs will have a MoMSME Chair in charge of advancing design research and innovations in MSMEs through coursework, fellowships, scholarships, product-specific issue solutions, and similar activities.
2. The creation of a specialised Center of Excellence (MoMSME-CoE) to support research, ideation, technological advancement, the development of futuristic technologies, the provision of specialised solutions, the preservation of historical domestic technology, the creation of sandboxes and simulators for testing products, and other activities for the MSME sector.

Roles & Responsibilities of Implementing Agency (IA):

• IA will serve as a conduit between the government (office of the DC) and MSMEs (MSME). Additionally, it would serve as a single point of contact for the DC office (MSME)
• IAs will assist MSMEs in identifying Design Issues with their goods and will offer knowledgeable counsel and affordable remedies.
• IA will assemble a Project Assessment Panel (PAP) to examine and assess the submitted proposals. The IA should make sure that the MSME is prepared to pay its matching fund and that it can be verified.
• IA will make sure that the Project is finished on schedule in accordance with the parameters of the scheme. IA will present the prototype product to the PMAC and submit a completion report after the project is complete. 
• IA is not allowed to use any grant funds for purposes other than those for which they have been approved.
• IA would be in charge of keeping track of a separate ledger account for the scheme’s funds. The C&AG of India, the PAO of the Ministry of MSME, or any other officer designated for this purpose by the office of DC (MSME) shall open this account for inspection.
• According to reports on the status of the scheme’s implementation and the good work of the respective Industrial Designers, directly distribute the monies to the beneficiaries and Industrial designers. Additionally, it will deliver the required Utilization Certificate (UC) in accordance with the GFR’s current format, as well as an audited Statement of Expenditures and a thorough Report, to the Office of DC (MSME).
• IA would provide the top body with quarterly updates on the overall status of the programme. Additionally, it would raise any exception complaints regarding any unresponsiveness or subpar performance on the part of any beneficiaries or designers.
• IA will make sure that no government-sponsored programmes, state government initiatives, or other public funding sources have benefited in the same way from the Design Project. It must be stated on writing with a notary stamp that no other government-sponsored programmes or other public funding sources have offered equivalent benefits.
• If the IA/MSMEs were unable to use the grant-in-aid money within the allotted time, the same grant-in-aid money must be refunded to the government account in accordance with government regulations or a sanction order.
• IA would make sure that no debt would be accrued to the Government of India while using the financial aid.

INTELLECTUAL PROPERTY RIGHT (IPR) COMPONENT

This component provides assistance with filing for various forms of intellectual property, such as patents, trademarks, copyrights, designs, geographical indications (GI), etc. Through the development of Intellectual Property Facilitation Centers (IPFCs) across the nation, the initiative also offers IP advisory, consultancy, patentability searches, technology gap analyses, and IP commercialization.

Intellectual Property Facilitation Centre (IPFC) 

Eligibility for registration as IPFC

Eligible Agencies:

Technology Centers, MSME-Development Institutes, and any other connected Field Organizations that are directly or indirectly managed by the Ministry of MSME.

The scheme will continue to be implemented by the current IPFCs for the remainder of their terms, and the new rules for financial aid will apply. They will have to reapply after their project period is through.

NGOs representing or working for MSMEs, Government Bodies/Departments/Autonomous Organizations being Run on Autonomous or Commercial Lines, MSME Industry Associations, Societies/ Cooperatives/Firms/Trust and Other Profit and Non-Profit Bodies, Research/Technical & Educational Institutions, Universities/Colleges with a Track Record of Assisting MSMEs, etc., subject to the following:

• They must have a well-established project execution infrastructure, built-up space with human resources (IP experts, business development, finance/accounting and admin staff), capital infrastructure like computers, printers, and offices with furniture.
• They must have proven they have the necessary work experience in matters relating to intellectual property through pilot studies, research studies, knowledge-sharing activities, and internal IP advisory resources.
• The agency must have been in operation for at least two years as of the application date, and if it is a non-government organization.
• It must provide audited annual reports for the previous two years. 
• They shouldn’t have accepted another grant from either Central Ministry or State Government for the same project.

Duration: Initial recognition as an IA would be granted to the IPFC for a period of three years; this recognition may be extended dependent on the IPFC’s performance following PMAC approval.

Stakeholders & Their Expected Role:
Ministry of MSME – PMAC

PMAC will direct, review, monitor, and offer overall guidance for the implementation of the programme at the highest level.

It will be in charge of overall policy development, Scheme implementation, proposal approvals, and project oversight.

It will have the authority to make all significant decisions regarding the plan, proposals, or recommendations to approve minor amendments or procedural changes to the rules for operational expediency, etc.

Pick and appoint active IPFCs as implementing organizations to carry out, introduce, and put into action various schemes of the MoMSME. 

MSME DIs

1. The DI office will serve as a liaison between the MoMSME and the IPFCs and assist, direct, and oversee the operation of IPFCs.

2. It shall evaluate the request to appoint agencies as IPFCs and submit the ideas, together with a recommendation, to PMAC for review.

3. It will forward the complaints, suggestions, and requests made by IPFCs to the PMAC for resolution and appropriate action. Along with its comments, it will also submit a Monthly Progress Report of IPFC activities to MoMSME.

4. In order to help MSME beneficiaries find an IPFC that is appropriate for their particular needs, it will provide IPFC information such as the working domain, location, entity type, key strengths, service portfolio, and progress summary.

5. It shall carry out awareness campaigns, seminars, workshops, and webinars in accordance with the goals outlined by MoMSME.

IPFC

1. To achieve successful project operations and efficient IPFC service delivery to the beneficiaries, IPFCs must hire IP specialists, consultants, business development and marketing executives, finance/accounting, and administrative staff.

2. IPFCs are required to offer IP filing services, including the registration of patents, trademarks, designs, and copyrights.

3. To encourage more MSME benefits, IPFCs shall offer additional IP support, such as IP advisory & Consultancy, IP Searches, Prior art Searches, Novelty Search, Validity Search, Freedom to Operate (FTO) analysis, Drafting & Filing of application, Support for Enforcing IPR, Infringement, Opposition suits, prosecution Valuation of IP Assets, IP Monetization, IP Due Diligence & Risk Analysis, IP Audits, Tech.

4. Through thorough validation of the submitted applications and supporting papers, IPFCs shall assist and handle the reimbursement requests for granted patents, trademarks, designs, and geographical indications submitted by qualifying applicants.

5. IPFCs must get in touch with MSME DI to report any problems, errors, or requests for help with the project’s implementation.

6. IPFCs must provide monthly activity progress reports to DI for compilation and subsequent submission.

7. For the MoMSME to offer IPFC financial assistance, IPFC will submit proof of achievement (Utilisation Certificate, audited statement of expenditure, detailed progress reports, etc.).

8. The National Patent Offices, Regional Patent Offices, and other National/International Agencies in charge of overseeing the implementation of IPR-related matters are expected.

9. The Indian government won’t incur any liabilities when these centres are established.

10. A steering committee must be established for each IPFC, and it must be led by the director, the MSME Development Institute, as well as other interested parties and industry professionals. Every three months, the steering committee shall have meetings, and each MSME-DI should assess the IPFC’s performance.

Financial Assistance for IPFC:

1. PMAC will assess IPFCs for financial support. A Grant of up to Rs. 1 crore would be given to an IPFC in three or more instalments dependent on milestones. Based on its review of the proposals, the PMAC will determine the precise amount of funding and instalments for each IPFC.
2. The initial payment amount may not exceed 40% of the entire approved project cost, or IPFC’s requested amount, whichever is less. The IPFC may ask for the following instalment, which will only be granted once documentation of reaching milestones is provided.
3. Subject to PMAC approval, the IPFC may request further funding after the grant has been used appropriately, which must occur on or before three years and exceed the project’s total cost of Rs. 1 crore.
4. The IPFC’s accreditation will be renewed three years after it has been approved, pending satisfactory performance and PMAC approval. Renewal of the IPFC’s certification will be a condition of any additional funding.
5. The first instalment grant must be used entirely by the IPFC within three years of the date of the first installment’s receipt; otherwise, the IPFC won’t be given consideration for registration renewal. All unused cash will be returned together with interest.
6. 6. The IPFC must provide MSMEs with free professional services ranging from pre-filing to IP commercialization, as well as support for the establishment of innovation-based businesses and the strengthening of their IP portfolio globally to position them as MSME Champions.
7. Overhead, consumables, contingency, and other such heads’ administrative/implementation costs may not total more than 15% of the individual instalments. The Indian government won’t incur any liabilities as a result of the establishment of these facilities.

These expenditure subheads are detailed as follows:

Administrative/Implementation Expenditure Heads: 

• Stationery, Telephone bills, Internet costs, Printer cartridges and toners, printing supplies, travel for meetings with MSME ecosystem stakeholders, including innovators, government officials, subject experts, institutions, and any other applicable expenses pertaining to IP facilitation.

• Up to a maximum of 15%, IPFC will be allowed to charge 2% in implementation fees for managing IPR reimbursement.

8. The cost of the project will include the hiring of professional services (IP expert, IP Attorney/Agent) if needed.
9. The project approval stage, which will be approved by the PMAC, requires that the aforementioned cost information be included.

Eligibility for Reimbursement of Patent/ Geographical Indications/ Trademarks/ Design

For Patent, Trademark and Design Reimbursement:

• The applicant, entity, or unit is required to hold a current Udyam Registration.
• Subject to having an Udyam Registration in their name and having full ownership of the business, persons who have patents, trademarks, or designs registered in their names are also eligible for reimbursement. In the case of a partnership firm, the applicant must show proof of ownership of at least 51% of the company’s shares.
• The applicant must certify that they are not requesting financing from any federal or state governments for the same patent, trademark, or design.

For Geographical Indication Reimbursement:

All organizations, associations, institutions, non-profit organizations, NGOs, societies, trusts, or other such non-commercial bodies with valid incorporation/establishment documents, a PAN number, etc.

Financial Assistance for MSMEs:

Reimbursement for registration of Patent, Trademark, Geographical Indications (G.I.), Design:

• The applicant must submit the refund request using the scheme’s site. Following careful examination by the IPFC, the same will be properly submitted to MoMSME for necessary approval. The IPFC will handle the reimbursement following MoMSME approval of the application.
• The following is the maximum amount of financial aid available to qualified applicants for the IPR component:

S.No.	Item	Maximum Financial Assistance (in lakhs INR)
	Foreign Patent	5.00
	Domestic Patent	1.00
	GI Registration	2.00
	Design Registration	0.15
	Trademark	0.10

• The government of India will provide a one-time support under the scheme for the reimbursement of costs incurred for the registration of patents, trademarks, designs, and geographical indications, provided that the applicant has not already claimed the same support under another Central Government or State Government programme.
• Patent: The applicant may be eligible for a 100% reimbursement of the actual costs or expenses incurred toward the registration of a patent with a competent authority, including but not limited to facilitation fees, all government fees, design/diagram and drawing fees, attorney fees, consultancy fees, prior art search and analysis fees, charges for drafting a patent application (provisional and complete specifications), fees for the prosecution and hearings of patent applications, examination fees. A maximum upper limit of Rs. 1 lakh for an Indian patent and up to Rs. 5 lakh for a foreign patent should be provided as proper support for this. It will not, however, pay for the costs associated with application renewals or any other costs associated with IP assignment, application correction, etc.
• Trademark: The applicant may be eligible to receive a full reimbursement of the actual costs or expenses incurred in order to register a trademark with the appropriate authority (including, but not limited to, facilitation fees, all government fees, attorney fees, consultancy fees, search fees, application drafting fees, charges for TM application prosecution and hearing, Examination fees, fee and charges associated with international/foreign TM fillings, other incidental charges, etc.) after filing the appropriate paperwork.
• Design: The applicant may be entitled to a 100% reimbursement of the actual costs or expenses incurred in order to register a design with the appropriate authority (including, but not limited to, facilitation fees, all government fees, attorney fees, consultancy fees, search fees, application drafting fees, fees for the prosecution and hearing of design applications, examination fees, fee and charges associated with filing international/foreign design applications, other incidental charges, etc.).
• Geographical Indication (GI): The applicant may be eligible for a 100% reimbursement of the actual costs or expenses incurred to register a GI with the appropriate authority, including but not limited to facilitation fees, attorney fees, maintenance fees, all government fees, consultancy fees, application drafting fees, fees for GI application prosecution, hearing and meetings with GI registry/consultative group, costs incurred for information gathering, GI logo fees, design fees, and other related costs.
• The MSME unit may make as many requests for reimbursement as necessary, but the total amount will be capped at the amounts listed in the table above for each IP registration.
• Subject to receipt of a copy of the MSME Udyam Registration certificate, a copy of the patent, trademark, design, or GI registration certificate, a copy of the bank mandate form, and the original bills and vouchers, reimbursement will be given to qualifying MSME enterprises.