The electrical manufacturing industry in India is gaining importance as a result of government initiatives, including “Make in India,” and the growing demands for power system development, electric vehicles, and consumer electronics. Nonetheless, for many entrepreneurs and small and medium-sized enterprises (SMEs) in electrical manufacturing, gaining access to the correct funds at the correct time continues to be a challenge. However, there are several simple and useful ways to raise funds to help grow a business.

Here are the best funding options available to businesses in the electrical manufacturing industry in India:

Electrical Manufacturing Industry: Government Schemes and Subsidies

The Indian government is actively fostering manufacturing and employs a multiplicity of schemes to promote manufacturing. For electrical manufacturers, the Production Linked Incentive (PLI) and Modified Electronics Manufacturing Clusters (EMC 2.0) schemes offer both financial incentives as well as cash grants and infrastructure support.

Other useful schemes include:

• MSME Credit Guarantee Scheme: Provides collateral-free loans up to ₹2 crores.
• Stand-Up India Scheme: Provides support to SC/ST and women entrepreneurs.
• Technology and Quality Upgradation Support (TEQUP): Assists in adopting energy-efficient technologies.

These schemes are advantageous for startups and small businesses within the electrical segment that are scaling up and modernizing.

Bank Loans and NBFC Funding

Conventional bank loans are still a trustworthy funding source. Both public banks and private banks that offer term loans, working capital loans, and machinery loans specifically target industrial setups.

In addition, Non-Banking Financial Companies (NBFCs) such as Bajaj Finserv, Tata Capital, and Lendingkart offer the advantage of faster disbursal and a more flexible repayment schedule, making them useful for urgent capital needs.

To increase approval chances:

• Maintain clear financial records.
• Have a solid business plan and projected ROI.
• Ensure compliance with tax and regulatory filings.

Venture Capital and Angel Investors

Although VCs and angel investors have traditionally focused on tech firms, they have started to invest in manufacturing firms, especially those with clean tech, automation, or IoT applications in their products.

To attract investors:

• Highlight innovation and scale.
• Demonstrate energy efficiency, sustainability, and the advantages of localization.
• Leverage AngelList India, LetsVenture or Venture Catalysts to have your pitch in front of investors.

Keep in mind that usually early-stage funding is an equity investment; be prepared to give up equity for angel investment capital and mentorship.

Crowdfunding and Peer-to-Peer Lending

Crowdfunding platforms such as Wishberry, FuelADream, or Ketto are typically for creative project funding. But if your electrical device has a mass appeal—such as solar kits, smart meters, or EV chargers—they can also fund the public directly.

Peer-to-Peer (P2P) lending platforms like Faircent and RupeeCircle facilitate transactions directly between borrowers and lenders with minimal paperwork and competitive rates of interest.

Both methods are good sources for small manufacturers to raise short-term working capital or innovative new product launches. 

Export Credit & International Funding

Are you exporting electrical equipment or installations? If so, organizations such as the Export Credit Guarantee Corporation (ECGC) and EXIM Bank can provide targeted financial support, provide credit risk insurance, and even provide support as a foreign market exporter.

International (regional) development agencies like the World Bank, IFC, and ADB can also provide support funds to Indian manufacturers, especially those focused on clean energy and infrastructure-based manufacturing.

Staff Writer

Staff Writer at Manufacturing Industry

 //funkyotherhalf.com