Introduction: A Green Industry with Huge Government Backing

As we enter 2025, we are well on our way to transformation with sustainability trends continuing to grow. India has been at the forefront of this movement with the banning of single-use plastics and shifting the public’s priorities toward biodegradable alternatives.

One industry that has benefited immensely from these global movements is that of paper cups.

As a leading Paper Cup Making Machine Manufacturer, we, at SBS Machinery, have seen a strong upward swing in demand from first-time entrepreneurs and small businesses. The good news is that the Government of India offers various subsidies, start-up loans, and backing to individuals who want to get into this space.

Assuming you are considering starting or building a paper cup unit, this post outlines five government schemes and subsidies that can help alleviate some of your upfront costs, interest costs, or accelerate your progress.

1. PMEGP (Prime Minister’s Employment Generation Programme)

The PMEGP Scheme is the most popular entry point for new manufacturing entrepreneurs in India.

What You Get

• Subsidy up to 35% for rural entrepreneurs (25% for urban)
• Project cost funding up to ₹25 lakh
• Interest rates are subsidized compared to market loans
• No collateral up to ₹10 lakh (through CGTMSE)

Eligibility

• Age: 18+
• Education: Minimum 8th pass
• Business must be new (not already in operation)

Pro Tip from SBS Machinery

PMEGP is ideal for first-time buyers investing in semi-automatic or automatic cup machines. We provide DPRs (Detailed Project Reports) tailored for this scheme, along with a complete machine quote.

2. Stand-Up India Scheme

This scheme is aimed specifically at women entrepreneurs and SC/ST entrepreneurs. It promotes inclusive growth by offering easy access to working capital for greenfield projects, including paper cup units.

Benefits

• Loans between ₹10 lakh to ₹1 crore
• Margin money as low as 10–15%
• Repayment period of up to 7 years
• Moratorium period of up to 18 months

Why This Matters

Paper cup businesses tick all boxes for Stand-Up India: greenfield project, eco-friendly product, and employment generation. This makes approval easier compared to high-tech sectors.

SBS Machinery Advantage

We’ve supported multiple female-led startups with full project documentation, making the approval process smoother and faster.

3. MUDRA Loans under PMMY

The MUDRA (Micro Units Development and Refinance Agency) loans are perfect for small-scale manufacturing units, especially for entrepreneurs launching with limited capital.

Loan Categories

• Shishu: Up to ₹50,000 (perfect for single-die units)
• Kishore: ₹50,001 to ₹5 lakhs
• Tarun: ₹5 lakhs to ₹10 lakhs

Features

• No collateral
• Minimal paperwork
• Low interest compared to personal loans
• Coverage under CGFMU (Credit Guarantee Fund for Micro Units)

Real Impact

Clients have used MUDRA to invest in small-footprint automatic paper cup machines and scale up production within 6 months.

4. State-Specific MSME Policies

Every Indian state has its own set of MSME subsidies for promoting manufacturing industries. These typically include:

Common Benefits

• Capital subsidy (10–30% on machinery cost)
• Interest subsidy (up to 5%)
• Power tariff concessions
• Stamp duty exemptions
• GST reimbursements (in some states)

Examples

• Tamil Nadu NEEDS Scheme: 25% subsidy, plus soft skills training
• Gujarat MSME Policy 2020: Interest subsidy up to ₹35 lakh
• West Bengal Udyog Bandhu Scheme: Reimbursement of electricity and tax

SBS Machinery Tip

We provide custom state-specific invoices and factory layout plans required by DIC offices to speed up your application.

5. NABARD & SIDBI Green Manufacturing Finance

NABARD (National Bank for Agriculture and Rural Development) and SIDBI (Small Industries Development Bank of India) are major institutional funders offering refinance and soft loans for eco-friendly units.

Funding Areas

• Energy-efficient manufacturing
• Biodegradable product units
• Rural employment-linked enterprises

What You Get

• Low-interest, long-tenure loans
• Interest subsidy (up to 4%)
• Technical support grants (in some states)

Why Paper Cups Qualify

Paper cups reduce plastic waste, support small farmers (via rural sales points), and promote biodegradable solutions — a perfect match for NABARD’s green agenda.

Final Thoughts

With rising environmental concerns, plastic bans, and growing demand for disposable paper products, there has never been a better time to enter the paper cup business.

Government subsidies and loan schemes are designed to lower the financial barriers. All you need is the right information, the right machine—and a reliable partner.

Let SBS Machinery be that partner.