NSIC Schemes for Product Startups

A founder I know runs a packaging business in Rajkot. He spends about ₹12 lakh a month on raw materials — polymer, adhesives, and ink. He buys from the same three suppliers he has used since day one. He pays on delivery. He has never gotten a bulk discount because his volumes do not justify one on his own.

Last year, someone told him about NSIC. He registered, applied for the Raw Material Assistance scheme, and within two months was buying the same materials through NSIC’s bulk procurement arrangements — at 10% lower cost, with 90 days of credit instead of paying upfront. That is ₹1.2 lakh saved per month and three months of breathing room on cash flow. In a single registration.

He had never heard of NSIC before that conversation. And he is not unusual.

Most product founders know about Udyam and DPIIT. Almost none know about NSIC — and it is arguably more useful for physical product businesses than either of those.

The National Small Industries Corporation is a Public Sector Undertaking that comes under the Ministry of Micro, Small and Medium Enterprises of India. It was set up by the Government of India in 1955 to foster, promote, and aid the growth of micro, small, and medium enterprises.

NSIC provides integrated support to micro and small enterprises through raw material assistance, credit facilitation, marketing support, tender registration, and digital services. NSIC is a Mini Ratna government agency — an ISO 9001:2015 certified Government of India Enterprise with technical support through NSIC Technical Services Centres and a number of Training Incubation Centres spread across the country.

Think of NSIC as your government-backed operations partner. It cuts your raw material costs, gets you into government tenders, subsidises your exhibition presence, helps you get bank credit, and rates your creditworthiness to unlock better loan terms. And yet most product founders have never heard of it.

Here are the five schemes that matter most — and exactly how to use each one.

Scheme #1: Raw Material Assistance — your working capital lifeline

Raw Material Assistance Scheme provides financial assistance to Micro, Small and Medium Enterprises at the time of the purchase of raw material. This scheme provides an opportunity for the MSMEs to purchase quality raw material at low cost and give more attention on manufacturing quality products.

NSIC finances the purchase of key raw materials — both indigenous and imported — so MSMEs can buy in bulk, avail discounts, and enjoy credit periods of up to 90 to 180 days. NSIC facilitates the availability of key raw materials like steel, aluminium, copper, zinc, polymer, bitumen, emulsion, cement and more, from bulk producers by entering into MOUs with them and provides these raw materials at competitive prices to MSMEs.

Single MSME units can avail loans of up to ₹5 crore while a group of units engaged in manufacturing can avail loans of up to ₹15 crore. The rate of interest charged on loans availed under this scheme ranges between 9.50% and 12%. MSMEs availing loans under this scheme need to repay within 90 days, but this can be extended upon request.

The scheme is only applicable to entrepreneurs of micro, small and medium scale industries. Any business having Udyam registration can avail the NSIC Raw Material Assistance Scheme. If you are a D2C brand spending ₹15 lakh per month on raw materials, buying in bulk through NSIC could save ₹1 to 2 lakh per month AND give you three months of credit to manage cash flow. That is the kind of operational advantage that changes unit economics overnight.

Scheme #2: Single Point Registration — your gateway to government tenders

NSIC enlists Micro and Small Enterprises under the Single Point Registration Scheme for participation in Government Purchases. To solve the problem of filling applications and paying for Earnest Money Deposits, NSIC introduced the Single Point Registration Scheme. It was introduced in 1976 with the objective of avoiding multiple registrations.

The benefits for registered MSEs are massive:

• Issue of Tender Sets free of cost. Exemption from payment of Earnest Money Deposit.
• In tender participating MSEs quoting price within the price band of L1+15% shall also be allowed to supply a portion up to 25% of the requirement by bringing down their price to L1 Price, where L1 is non-MSEs.
• Every Central Ministry, Department, and PSU shall set an annual goal of minimum 25% of the total annual purchases from MSEs.
• Out of the annual requirement of 25% procurement from MSEs, 4% is earmarked for units owned by SC/ST and 3% for units owned by women entrepreneurs.

SPRS registered units are an integral part of the supply chain to Government. 358 items are reserved for exclusive purchase from the MSE Sector. That is 358 product categories where the government must buy from small enterprises like you — not from large corporations.

Think about what this means for a product startup. You get free access to government tender documents. You skip the earnest money deposit that blocks most small businesses from even bidding. You get a price preference that levels the playing field against larger competitors. And you access a guaranteed 25% procurement mandate from every central government department. That is not a vague policy promise — it is a gazette-notified requirement.

Scheme #3: Marketing support — subsidised exhibitions and buyer-seller meets

Marketing has been identified as one of the most important tools for business development. It is critical for the growth and survival of MSMEs in today’s intensely competitive market. NSIC acts as a facilitator and has devised a number of schemes to support enterprises in their marketing efforts, both domestic and foreign markets.

To showcase the core competencies of MSEs in India and to capitalise on market opportunities, NSIC participates in National and International Trade Fairs and Exhibitions every year. NSIC facilitates the participation of the MSEs by offering concessions in rental. Participation in these events exposes MSE units to international practices and improves their business competencies.

For international exhibitions, the scheme reimburses up to 75% of the actual charges for renting exhibition space in trade fairs abroad. For domestic exhibitions, NSIC provides space at subsidised rates.

But marketing support goes beyond exhibitions:

• Small enterprises face problems procuring and executing large orders, which denies them a level playing field. NSIC forms consortia of units manufacturing the same products, pooling capacity. NSIC applies for tenders on behalf of single MSEs or consortia to secure orders. These orders are then distributed amongst MSEs in tune with their production capacity.
• NSIC is offering Infomediary Services through its MSME Global Mart (msmemart.com), a Business-to-Business web portal — a free B2B platform where you can showcase products and receive trade leads
• Special support for SC/ST entrepreneurs in marketing programmes

For a product startup with a marketing budget of zero, this is transformative. You get exhibition space at a fraction of the cost, a consortia structure that lets you bid on orders you could never handle alone, and a B2B portal that provides leads and visibility — all backed by the government.

Scheme #4: Credit facilitation plus Performance and Credit Rating

Credit facilitation

Through tie-ups with multiple banks, NSIC helps MSMEs get fund-based and non-fund-based limits; NSIC assists in documentation and follow-up with banks at no extra cost. NSIC is not a bank; it facilitates credit through partner banks and provides direct assistance mainly in the form of raw material support, marketing services, and scheme-linked benefits.

In August 2025, NSIC entered into MOUs with various private sector banks such as Axis Bank, Dhanlaxmi Bank, Karnataka Bank, AU Small Finance Bank, and IndusInd Bank under its MSME Credit Facilitation programme, to extend handholding support to MSMEs and help them link to the formal financial system. This means NSIC does the documentation work, follows up with the bank on your behalf, and leverages its institutional relationships to get you approved faster.

Performance and Credit Rating Scheme

The NSIC credit rating scheme for performance and credit rating seeks to establish independent, trusted third-party opinion on capabilities and credit-worthiness of MSEs, and makes credit available at attractive interest rates.

The benefits of getting rated are significant:

• Provides an independent and unbiased opinion on the financial and operational performance of a business. Easy access to bank funding as it creates credibility amongst bankers. Confidence building with business partners including investors, suppliers, customers, and other stakeholders. A self-improvement tool that can be used as a benchmark. Visibility on the internet and amongst bankers as the rating would be published by the rating agency.

And the rating is heavily subsidised by the government. For enterprises with up to ₹50 lakh turnover, the government reimburses 75% of the fee charged by the rating agency, subject to a ceiling of ₹15,000. For enterprises above ₹50 lakh to ₹2 crore turnover, 75% is reimbursed subject to a ceiling of ₹30,000. Above ₹2 crore turnover, 75% subject to a ceiling of ₹40,000.

NSIC authorises performance and credit rating through empanelled agencies like CRISIL, ICRA, Dun and Bradstreet, Brickworks, and ONICRA. A CRISIL or ICRA rating on your business is a trust badge that banks, government buyers, and enterprise customers all recognise. For a small product startup, this kind of credibility usually costs lakhs. Through NSIC, you pay a fraction — and the government covers the rest.

Scheme #5: Technology support, training, and incubation

NSIC offers small enterprises support services through its Technical Services Centres. Material testing facilities through accredited laboratories. Advice on application of new techniques. Common facility support in machining, EDM, CNC. Product design including CAD. Energy and environment services at selected centres. Classroom and practical training for skill upgrading.

The range of technical services provided through these centres includes skill development in hi-tech as well as conventional trades, material and product testing at testing laboratories accredited by NABL and BIS, common facilities, energy audit, and environment management.

NSIC is operating a scheme for entering into franchisee arrangements with private partners for setting up Training-cum-Incubation Centres at various locations across the country under Public-Private Partnership mode. NSIC Training-cum-Incubation Centres provide an opportunity to first-generation entrepreneurs to acquire skills for enterprise building and also incubate them to become successful small business owners.

For hardware founders and product manufacturers, this is enormous. Instead of spending ₹50 lakh or more setting up your own testing and prototyping lab, you can use NSIC’s Technical Services Centres to test materials, prototype with CNC and EDM machines, and get product design support via CAD — all at subsidised rates. The labs are NABL-accredited, which means the test results carry formal credibility with buyers and regulators.

NSIC also offers subsidised ERP, CRM, and accounting software through its digital services programme — tools that most startups pay full price for without realising a government-subsidised option exists.

Why most product founders have never heard of NSIC

Here is the honest answer. The startup ecosystem in India is heavily biased toward tech. When we talk about “government schemes for startups,” the conversation always gravitates toward DPIIT recognition, Startup India Seed Fund, angel tax exemption, and venture capital. Those schemes are important — but they are designed primarily for technology companies raising equity capital.

If you make soap, or package food, or manufacture components, or produce textiles, or build furniture — you are invisible to most of the startup ecosystem. You are not on LinkedIn talking about your Series A. You are not pitching at demo days. You are running a real business, managing inventory, fighting for margins, and trying to get your products in front of buyers.

NSIC was built for you. It was established in 1955 — decades before “startup” became a word — specifically to help small manufacturers and product businesses compete against larger enterprises. India has approximately 6.3 crore MSMEs and over 6 crore MSMEs across manufacturing and services sectors employ over 11 crore people. The MSME sector is the backbone of the Indian economy. And NSIC is its most under-utilised support system.

The NSIC Venture Capital Fund — a bonus most founders miss

Here is something even many NSIC-registered businesses do not know about. NSIC runs a venture capital fund specifically for MSMEs — the NSIC Venture Capital Fund Limited (NVCFL), operating as a Mother Fund.

Since its inception in October 2021, 69 Daughter Funds have been empanelled with NVCFL, and the SRI Fund has assisted 682 MSMEs by way of investment totalling ₹1,823 crore. This is equity capital — not debt, not a loan — specifically for micro, small, and medium enterprises. The fund exists because one of the biggest challenges faced by MSMEs in India is the inadequate availability of capital. MSMEs have limited access to external equity primarily because only a handful of players provide early-stage equity capital. The current VC ecosystem seeks technology-driven enterprises and has exponential exit stipulations.

If you are a manufacturing or product MSME that cannot access traditional venture capital because you are “not tech enough,” NSIC’s venture capital programme is designed specifically for your situation.

How to stack NSIC with other government schemes

NSIC is powerful on its own. But it becomes transformative when you combine it with other schemes that are already available to you.

Each scheme solves a specific problem. Together, they create an integrated support system that covers procurement, credit, marketing, technology, and market access. No single scheme does everything. But the combination — which costs almost nothing to access — creates advantages that most product startups spend years and lakhs of rupees trying to build on their own.

Your 3-week NSIC registration action plan

Stop ignoring NSIC. Here is your step-by-step setup plan.

What NSIC registration costs — and what it saves

Let me put the cost-benefit in perspective, because this is where many founders hesitate unnecessarily.

The registration fee is nominal — ₹3,000 to ₹5,000 depending on your enterprise size, with the certificate valid for 2 years. Renewal within 6 months of expiry keeps you active, and MSEs coming for early renewal get a 50% discount on the renewal fee.

For that ₹3,000 to ₹5,000, you get: free tender documents that normally cost thousands per set, EMD exemption that frees up lakhs in blocked deposits, a price preference that can win you contracts you would otherwise lose, access to raw materials at 8 to 15% lower cost with 90 to 180 days of credit, subsidised exhibition space at domestic and international trade fairs, a government-backed credit rating at 75% subsidy, bank credit facilitation at no additional cost, and access to NABL-accredited testing labs and CNC facilities at subsidised rates.

The return on a ₹3,000 registration fee is measured not in multiples — but in orders of magnitude.

Why this matters more in 2026 than ever before

The Indian government is actively expanding support for MSMEs. MSMEs in Tier 2 and 3 cities have reported an average 20% growth in revenues after their integration with the government’s Open Network for Digital Commerce. The ecosystem of government support — from ONDC to GeM to NSIC to MUDRA — is becoming more integrated, more digital, and more accessible.

The MSME sector is very important for the Indian economy in terms of contribution to GDP and employment generation. India has over 6 crore MSMEs across manufacturing and services sectors which employ over 11 crore people. MSMEs also contribute immensely in exports from the country.

And yet, most of these MSMEs operate without the support systems that exist specifically for them. They pay full price for raw materials when bulk discounts are available. They skip government tenders because the EMD requirement blocks them. They exhibit at trade fairs on their own budget when 75% reimbursement exists. They approach banks without a credit rating when a subsidised one is available.

Every one of those missed opportunities is money left on the table. Not because the schemes do not exist — but because nobody told the founders they were there.

You are already paying taxes. These schemes exist to help you grow. The only cost is the time it takes to register. The return is measured in lower procurement costs, government contracts, bank credibility, and marketing reach you could not afford on your own.