If you are planning to start a tyre retreading business in India, the Prime Minister’s Employment Generation Programme (PMEGP) offers a lucrative subsidy to make your venture viable. Tyre retreading (NIC 22112) is an environmentally sustainable and cost-effective alternative to new tyres, especially for commercial vehicles. Under PMEGP, a project costing between ₹5 lakh and ₹40 lakh can avail a margin money subsidy of 15-35% (up to ₹35 lakh for general category, 35% for special categories). A bank-ready project report is mandatory for loan approval. This report must include detailed CMA (Credit Monitoring Arrangement) data, DSCR (Debt Service Coverage Ratio) calculations, and 5-year financial projections to demonstrate repayment capacity. Our guide provides a ready-to-use format, covering project cost, machinery list, working capital, and subsidy calculation, helping you secure PMEGP funding smoothly.
Any individual above 18 years of age, with at least 8th standard education (for projects above ₹10 lakh), can apply. There is no upper age limit. For tyre retreading, you need a suitable workshop space (minimum 500 sq ft) and basic knowledge of retreading processes. The applicant should not have defaulted on any previous loan. Special categories (SC/ST/OBC/minorities/women/ex-servicemen/physically handicapped) get higher subsidy. The project must be a new venture; existing businesses are not eligible under PMEGP. The unit should be registered as a sole proprietorship, partnership, or private limited company. Additionally, the applicant must have a bank account and Aadhaar-linked mobile number.
For a tyre retreading unit, typical project cost includes: machinery (tyre buffing machine, curing chamber, tread rubber applicator, air compressor, etc.) – ₹3-8 lakh; equipment (moulds, tools, testing gauges) – ₹1-2 lakh; working capital for raw materials (tread rubber, cushion gum, cement) – ₹2-5 lakh; and preliminary expenses (licenses, training) – ₹0.5-1 lakh. Total ranges from ₹5 lakh to ₹40 lakh. Under PMEGP, the promoter contributes 10-20% (5% for special categories). The bank provides term loan and working capital as per project report. Subsidy is released in two installments: 50% after loan disbursement and 50% after unit starts production. The project must generate at least one full-time job per ₹5 lakh investment.
You will need: (1) Project report in PMEGP format (with CMA, DSCR, 5-year projections). (2) Identity proof (Aadhaar, PAN). (3) Address proof (utility bill, rent agreement if leased). (4) Caste certificate (if applying under special category). (5) Educational qualification certificate (minimum 8th pass). (6) Bank statement of last 6 months (personal or business). (7) Quotations for machinery and raw materials. (8) Land/building documents (ownership or lease deed). (9) No-objection certificate from local authority (if needed). (10) Any existing loan statements (if any). For partnership/company: partnership deed, registration certificate, board resolution. Ensure all documents are self-attested and scanned clearly for online application via PMEGP e-portal (kviconline.gov.in).
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Project cost ₹5–40 Lakh, NIC 22112.
CMA, DSCR ≥ 1.50, 5-year projections.
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Yes — PMEGP (15–35% margin-money subsidy) is commonly used for tyre retreading. The report is formatted to PMEGP requirements with subsidy/margin money shown.
15–35% margin-money subsidy — computed automatically in the means-of-finance and subsidy sections.
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For general category, subsidy is 15% of project cost (max ₹15 lakh). For special categories (SC/ST/OBC/minorities/women/ex-servicemen/physically handicapped), it is 25% (max ₹20 lakh). In hill and border areas, general gets 25% (max ₹20 lakh) and special gets 35% (max ₹35 lakh). The subsidy is provided as margin money assistance and is not a direct cash grant; it is adjusted against the loan.
No. PMEGP is only for new projects. Existing units are not eligible. However, if you have a different business (unrelated to tyre retreading), you can still apply for a new tyre retreading unit. Also, the applicant must not have availed any other government subsidy for the same project.
Banks typically expect a minimum DSCR of 1.25 for the first year, improving to 1.5 or above in subsequent years. For a tyre retreading unit, with proper projections, DSCR can be maintained at 1.5-2.0. The project report should show sufficient net profit and cash flow to cover debt obligations.
After online application, the District Task Force (DTF) recommends within 30 days. Then the bank processes the loan within 30-45 days. Total time from application to disbursement is usually 2-3 months, provided all documents are in order and the project report is bank-ready.