What is the MSME Innovative Scheme?
What is the MSME Innovative Scheme, and when was it launched?
The MSME Innovative Scheme is a Ministry of MSME program launched on 10 March 2022, alongside the MSME Idea Hackathon, that merges the earlier Incubation, Design, and Intellectual Property Rights schemes into a single framework to encourage innovation across the whole value chain, from an idea to a marketable product.
The scheme sits under the MSME Champions umbrella. The three verticals still operate separately but are connected, so a startup can move from incubation to design support and then to IPR protection without starting from scratch each time.
The Three Verticals
| Vertical | Purpose | Headline Support |
|---|---|---|
| Incubation | Turn ideas into viable business propositions | Up to Rs 15 lakh per idea through Host Institutes |
| Design | Improve product design and competitiveness | Government share of design project cost, higher for micro enterprises |
| IPR | Protect patents, trademarks, designs and GI | Reimbursement of filing costs, plus IP Facilitation Centres |
Incubation Support Under the Scheme
How much does the incubation component provide?
Incubation support is up to Rs 15 lakh per idea, released through recognized host institutes. The Ministry meets up to 85 percent of the approved cost, with the rest contributed by the applicant or partner, and it covers the full cost up to Rs 15 lakh for student innovators. Separately, host institutes can receive up to Rs 1 crore to acquire plant and machinery for incubation.
The money can be used for technology-related expenses such as machine usage, testing, calibration and raw materials, and for mentoring and hand holding support. Host Institutes are checked by the Ministry, and any unspent amount is refunded.
IPR Support: Patents, Trademarks, GI and Designs
| Type of Registration | Maximum Reimbursement |
|---|---|
| Foreign patent | Rs 5 lakh |
| Domestic patent | Rs 1 lakh |
| Geographical Indication registration | Rs 2 lakh |
| Design registration | Rs 15,000 |
| Trademark | Rs 10,000 |
This is a one time support for each registration and cannot be claimed if the same expense has been supported under another central or state scheme. The Ministry has also set up IP Facilitation Centres, which can receive grants of up to Rs 1 crore in milestone-based instalments, to counsel MSMEs and help draft and file applications.
Design Support for MSMEs
The design vertical brings Indian manufacturing and the design community onto a common platform. MSMEs work with design experts and institutions on projects such as improving product form and function, packaging and user experience. The government bears a large share of an approved project's cost, with a higher share for micro enterprises than for small and medium enterprises, and the balance is paid by the MSME. Exact caps and shares are set in the scheme guidelines, so confirm them on the official portal before budgeting.
Who Can Apply
- Innovators, entrepreneurs and students with a novel and commercially viable idea, for incubation
- Udyam registered MSMEs for design support and IPR reimbursement
- Educational and research institutions and incubators that apply to become Host Institutes
- Applicants must not have claimed the same IPR expense or the same idea support under another government scheme
How to Apply
- Decide which vertical fits: Choose between incubation for a new idea, design support for an existing product, or IPR reimbursement for protecting your innovation.
- Get Udyam Registration if you are an MSME: Udyam Registration is needed for design and IPR support, while incubation is open to innovators and students with a viable idea.
- Identify a recognized host institute: For incubation, choose a Host Institute from the scheme's network that suits your sector and technology.
- Submit your proposal: Apply on the official portal at innovative.msme.gov.in with a clear idea note, budget, milestones and expected outcome.
- Use the IP Facilitation Centres: For patents, trademarks, designs or GI, take help from an IP Facilitation Centre to draft and file the application correctly.
- Claim reimbursement and report progress: Submit proof of expenditure or filing for reimbursement, and report milestones so that instalments and support are released.
How It Differs From Other Innovation Schemes
| Scheme | Focus | Typical Support |
|---|---|---|
| MSME Innovative Scheme | Incubation, design and IPR for MSMEs and innovators | Up to Rs 15 lakh per idea plus IPR reimbursement |
| Startup India Seed Fund Scheme | Early stage startups through incubators | Up to Rs 20 lakh grant and up to Rs 50 lakh debt or convertibles |
| SAMRIDH | IT product startups through accelerators | Matching co-investment up to Rs 40 lakh |
Key Takeaways
- The MSME Innovative Scheme, launched on 10 March 2022, merges the incubation, design and IPR schemes of the Ministry of MSME.
- Incubation support is up to Rs 15 lakh per idea through recognized host institutes, which can also receive up to Rs 1 crore for plant and machinery.
- IPR reimbursement covers up to Rs 5 lakh for foreign patents, Rs 1 lakh for domestic patents, Rs 2 lakh for GI, Rs 15,000 for designs and Rs 10,000 for trademarks.
- Design support shares project cost with a higher government share for microenterprises.
- Applications and IPR claims are made on innovative.msme.gov.in, and IP Facilitation Centres help with drafting and filing.
FAQs
What is the MSME Innovative Scheme?
The MSME Innovative Scheme is a Ministry of MSME programme launched on 10 March 2022 that combines the earlier Incubation, Design and Intellectual Property Rights schemes into one framework to help innovators and MSMEs turn ideas into products, improve design and protect their intellectual property.
How much financial support is available for an idea under incubation?
The Ministry of MSME provides up to Rs 15 lakh per idea through recognised Host Institutes, with the Ministry meeting up to 85 percent of the approved cost and the applicant or partner meeting the rest, and the full cost up to the cap for student innovators.
How much can an MSME claim for patents and trademarks?
The IPR component reimburses expenses of up to Rs 5 lakh for a foreign patent, Rs 1 lakh for a domestic patent, Rs 2 lakh for a Geographical Indication registration, Rs 15,000 for a design registration and Rs 10,000 for a trademark, as a one time support subject to conditions.
What are Host Institutes under the scheme?
Host Institutes are recognised institutions such as universities, technical institutes, incubators and R and D bodies through which incubation funding is routed. They provide infrastructure, mentoring and facilitation, and are subject to checks by the Ministry, with unspent money refunded.
What is the design component of the MSME Innovative Scheme?
The design component helps MSMEs work with design experts and institutions to improve product design, packaging and competitiveness. The government bears a large share of an approved design project's cost, with a higher share for micro enterprises than for small and medium enterprises, and the balance paid by the MSME.
How do I apply for reimbursement of patent or trademark costs?
Applications for IPR reimbursement are made on the scheme's official portal at innovative.msme.gov.in, and the Ministry has also set up IP Facilitation Centres that help with counselling, drafting and filing of patents, trademarks, designs and Geographical Indications.
Conclusion
If you are an innovator or MSME planning to build a prototype, upgrade product design or protect your intellectual property and want help choosing between the MSME Innovative Scheme, SISFS, and other options, Growthora Advisory can guide the application. Book a free consultation with our funding team today.
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