Mill Gate Price Subsidy Scheme (Gujarat Handloom)

What is the Mill Gate Price Subsidy Scheme?

The Mill Gate Price Subsidy Scheme makes yarn available to handloom weavers at the price the yarn carries at the mill gate, rather than at the price a weaver would pay after freight, depot margin and trader markup. In Gujarat the scheme is administered as part of the handloom programme of the Commissioner of Cottage and Rural Industries under the Industries and Mines Department, with yarn supplied through National Handloom Development Corporation (NHDC) depots and the Gujarat State Handloom Corporation.

Yarn is the single largest input cost in handloom weaving. A weaver buying small quantities from a local trader pays materially more per kilogram than a mill buyer, which is exactly the disadvantage that makes handloom cloth uncompetitive against powerloom cloth. The scheme attacks that gap in two ways at once: it delivers yarn at mill gate price, and it pays a price subsidy on top.

Key objectives

• Give handloom weavers regular access to their primary raw material at a fair price.
• Reduce the cost of handloom cloth so it competes with mill and powerloom output.
• Support handloom cooperative societies, which remain the backbone of Gujarat's handloom sector: over 246 handloom cooperative societies in Gujarat recorded sales of more than Rs 290 crore in 2024-25.

Main features

• Yarn at mill gate price from approved depots.
• A price subsidy on eligible yarn. Gujarat's Commissioner of Cottage and Rural Industries publishes the rate as 10 percent; NHDC's citizen charter states 15 percent price subsidy paid through DBT with quantitative restrictions. Because the two published figures differ, confirm the rate applicable to your purchase at the depot before you place an indent.
• Freight reimbursement to depot-operating agencies to 2.5 percent in plain areas and 7.5 percent in the north-east and hilly regions, with lower rates for silk, so the transport cost does not reach the weaver.
• Depot operating charges reimbursed at 2 percent of yarn value, capped at Rs 15,000 a month.
• Quantity caps per loom per month by yarn type, which is how the scheme prevents diversion into the trade.

Who is eligible for the Mill Gate Price Subsidy Scheme?

You can apply if you are:

• An individual handloom weaver with registration or a weaver identity card.
• A self-help group (SHG) or joint liability group (JLG) of weavers.
• A weavers' cooperative society registered under the Cooperatives Act.
• A handloom producer company.
• A weaver entrepreneur running handloom production.
• A handloom NGO or a handloom apex institution at national, state, regional or primary level.

You cannot apply if you are:

• A powerloom unit. The scheme is confined to handloom production and powerloom operators are not eligible.
• A mill-sector textile manufacturer.
• A yarn trader buying for resale. Reselling subsidised yarn is the abuse the quantity caps exist to prevent.
• An unregistered buyer with no weaver identity card and no registered handloom organisation behind the purchase.
• A weaver whose monthly quantity cap for that yarn type is already exhausted; further purchases in the same month are possible but not at the subsidised rate.

What documents are required?

How to buy subsidised yarn and claim the subsidy

1. Register as a handloom weaver with the district cottage industries office in Gujarat, or ensure your cooperative society or producer company is registered and its handloom status is on record.
2. Link your bank account to Aadhaar. The price subsidy is paid by Direct Benefit Transfer, so an unlinked or dormant account stops the money even when the purchase is valid.
3. Locate your nearest approved yarn depot — an NHDC depot or a Gujarat State Handloom Corporation depot. The district cottage industries office holds the current depot list.
4. Raise a yarn indent at the depot, stating yarn type, count and quantity against your loom capacity, and stay within the monthly cap for that yarn type.
5. Pay the mill gate price and collect the invoice. The invoice is the document on which the subsidy is calculated, so check that the yarn type, count, quantity and your name or society name are correct on it.
6. Submit the invoice and claim details as the depot directs, along with your weaver card and bank details.
7. Receive the price subsidy by DBT into the linked bank account after the claim is processed.

How to apply through the district office in Gujarat

1. Visit the District Industries Centre or the district cottage industries office and ask for the handloom section.
2. Complete handloom weaver registration if you do not already hold a weaver identity card, submitting Aadhaar, loom details and proof of weaving activity.
3. Obtain the list of approved yarn depots operating in or near your district.
4. Return with purchase invoices to have subsidy claims processed if your depot routes claims through the district office rather than directly.

For scheme-level queries, the Commissioner of Cottage and Rural Industries sits at Udyog Bhavan, Block 7, Gandhinagar. NHDC operates a national helpline for the yarn supply scheme on 1800 208 9988.

How much benefit does the scheme provide?

The benefit has two parts, and weavers often count only the first.

The first part is the price itself. Buying at mill gate price removes the freight and the intermediary margin from every kilogram of yarn. NHDC reimburses the depot-operating agency for freight: 2.5 percent of yarn value in plain areas, 7.5 percent in north-eastern and hilly regions, with reduced rates of 1 percent and 2.25 percent for silk, and reimburses depot operating charges at 2 percent of yarn value up to Rs 15,000 a month. Gujarat is a plain-area state for this purpose.

The second part is the price subsidy, paid by DBT. NHDC's citizen charter states 15 percent; the Gujarat cottage industries department's own handloom scheme description states 10 percent on yarn bought from NHDC depots or the Gujarat State Handloom Corporation. This guide reports both figures because both appear on official sources and neither can be dismissed. Ask the depot for the rate applicable to your yarn type on the day you indent.

Quantity caps define how much of a weaver's consumption is actually subsidised. According to NHDC's citizen charter, cotton yarn is capped at 15 to 60 kg per loom per month depending on count, silk and blended yarn at 6 kg, woollen yarn from 6 to 50 kg and linen from 7 to 20 kg. A weaver with three looms is assessed on three looms, which is why loom details are a mandatory part of registration.

How to check your subsidy status

1. Check the bank account linked for DBT for the credit against your purchase invoice.
2. Keep the invoice number and date for every subsidised purchase. This is the reference the depot uses to trace a claim.
3. Ask the depot-operating agency to confirm that your claim was uploaded and forwarded.
4. Call the NHDC helpline on 1800 208 9988 for a claim that has not been credited after the normal processing period.

Common reasons subsidy claims fail

• Bank account not linked or not active, so the DBT credit bounces.
• Purchase exceeded the monthly quantity cap for that yarn type and loom count.
• Weaver registration lapsed or the weaver identity card details do not match the invoice.
• Invoice raised in a different name from the registered weaver or society.
• Yarn type outside the covered list for subsidy in that period.
• Purchase made from an unapproved source rather than an NHDC or Gujarat State Handloom Corporation depot. This is the most common error made by weavers buying locally on the assumption that any yarn purchase qualifies.

Key dates to remember

The scheme has no annual application deadline. Yarn is purchased as production requires it, and the operative limit is the monthly quantity cap rather than a calendar date. Weavers who plan purchases across the month rather than in one large indent tend to stay inside the cap and lose less subsidy.

How to raise a grievance

• NHDC helpline: 1800 208 9988 for yarn supply and subsidy claim issues.
• Commissioner of Cottage and Rural Industries, Udyog Bhavan, Block 7, Gandhinagar, for state-level handloom scheme grievances.
• District Industries Centre for registration, weaver card and depot access problems.

No fee is payable for weaver registration or for claiming the price subsidy, and no depot or agent may deduct a commission from a DBT subsidy that belongs to the weaver.