Government Expands MSME-SPICE Scheme to Include Greenfield Projects After Low Uptake

New Delhi, Oct 13 (KNN) The Indian government is set to broaden the scope of its MSME‑SPICE scheme by allowing greenfield units to join, following low participation from existing businesses.

Launched in December 2023, MSME‑SPICE (Scheme for Promotion and Investment in Circular Economy) aims to help small and medium enterprises adopt circular economy practices—such as recycling, waste reduction, and resource efficiency—by providing subsidies for equipment and process upgrades. Initially, only existing (“brownfield”) units were eligible.

However, the scheme has seen limited uptake. Only six MSMEs have availed incentives so far, far below the target of supporting over 3,400 enterprises by 2026‑27. Of the allocated Rs 500 crore, just around Rs 2 crore has been disbursed.

A senior government official told Moneycontrol that including greenfield projects could boost demand. “We hope more MSMEs will invest in plant and machinery promoting circular processes,” the official said.

Under the scheme, MSMEs receive a capital subsidy of up to 25% of the cost of plant and machinery, capped at Rs 12.5 lakh per unit, to offset upfront investment in green technologies. 

The Small Industries Development Bank of India (SIDBI) is implementing the program.

By expanding eligibility, the government aims to stimulate stronger participation, encourage green investments, and advance the transition toward a more sustainable industrial sector in India.

(KNN Bureau)