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CITUS scheme for coir industry: Eligibility, benefits & implementation

By Tata Capital
18 February 2026
9 mins read
1735

The coir industry has long been an important source of employment and rural income in India, especially in the coastal regions. Mainly due to their eco-friendly nature, coir products such as mats, ropes, rugs, and brushes have steadily garnered good demand in both domestic and international markets. However, the maximum coir production in India is still carried out using traditional or outdated methods. This, in turn, leads to lower productivity, inconsistent quality, and difficulty competing with international players.

To address this challenge, the Government of India introduced a focused initiative specifically aimed at modernizing the coir sector. Known as the CITUS scheme, this program encourages technology upgradation by helping coir units invest in improved machinery and equipment.

Keep reading to know in detail about the CITUS scheme, including its full form, key features, eligibility, benefits, and more.

What is the CITUS scheme for the coir industry?

The CITUS full form is Coir Industry Technology Upgradation Scheme. It is a government-backed initiative introduced specifically to promote technology upgradation in the Indian coir sector. Under this scheme, the eligible coir units in India can avail of up to 25% subsidy on the purchase of modern machinery or equipment for coir production or extraction. The maximum subsidy amount can be Rs. 2.5 crore for a coir unit/project.

The scheme is implemented through the Coir Board, Kochi. It is the nodal agency responsible for reviewing applications and releasing financial assistance to eligible beneficiaries.

Objectives of the Coir Industry Technology Upgradation Scheme

The key objectives of the CITUS scheme include:

Modernizing and upgrading existing coir manufacturing units.
Helping coir units improve efficiency and enhance product quality.
Supporting the setting up of new state-of-the-art coir processing units.
Expanding the Indian coir industry into potential and emerging markets.
Encouraging better utilization of available coir raw materials.
Generating additional employment opportunities, especially for women in rural areas.
Attracting new and young entrepreneurs to the coir industry.
Promoting the adoption of Information Technology (IT), including Enterprise Resource Planning (ERP) systems.
Supporting the production of high-value, customer-focused coir products.
Making the coir industry more integrated, efficient, and competitive through modern technology.

Why is technological upgradation needed in the coir industry?

The coir industry still relies heavily on manual processes. Many units operate with old machines that limit output and affect consistency in quality. This makes production slow and cost-heavy, especially when demand increases.

Rising labor costs and a shortage of skilled workers add further pressure. Without modern machinery, meeting large orders becomes difficult. Technology upgradation helps improve efficiency, reduce wastage, and ensure uniform quality. It also allows units to compete with alternative materials and meet the expectations of both domestic and export markets.

Nature of financial assistance under CITUS

Under the CITUS scheme, financial support is provided mainly in the form of a capital subsidy. This assistance helps coir units upgrade machinery, adopt better technology, and improve production efficiency without bearing the full cost upfront.

The financial assistance is 25% of the total cost of the eligible plant and machinery.
The maximum financial assistance is capped at Rs. 2.5 crores per coir unit or project.
The subsidy amount is transferred directly through Direct Benefit Transfer (DBT) and Public Finance Management System (PFMS) post the installation of machinery and commencement of operations.

Eligibility criteria for the CITUS Scheme

Understanding the Coir Industry Technology Upgradation Scheme eligibility criteria is crucial before applying. The following entities are eligible to apply for financial assistance under the CITUS scheme:

Newly established or existing coir production/processing units owned by individuals, partnership firms, Self-Help Groups (SHGs), associations, cooperatives, and enterprises in the small-scale, medium, private, or public sector.
The unit must be engaged in the production of value-added coir or coir-blended products, where coir remains the dominant fiber.
The unit must be registered with the Coir Board under the Coir Industry (Registration) Rules, 2008 and must possess a valid Udyog Aadhaar.
Units applying for financial assistance for modernization must have completed at least five years of successful operations.
Financial assistance under CITUS is available only to entrepreneurs who have not availed any Central Government subsidy for the same purpose under schemes such as PMEGP, CUY, DPI, TUF, or similar programs.

Types of coir units covered under CITUS

The CITUS scheme covers multiple types of coir units, from raw coir processing units to product manufacturing units. This broad coverage ensures that technology upgradation benefits the industry as a whole, rather than a few isolated players. Furthermore, it helps improve efficiency across the supply chain and ensures that benefits reach both small operators and large production units.

Below are the types of coir units covered under the CITUS scheme:

Primary coir processing units

These units handle the initial stages of coir processing, including the extraction and cleaning of raw coir fiber. They mostly operate with outdated equipment and depend heavily on manual labor. The CITUS scheme helps these units procure modern machinery and technology. This, in turn, helps in wastage reduction and more consistent fiber quality.

Spinning and weaving coir units

Spinning and weaving units convert coir fiber into yarn, mats, carpets, rugs, and geotextiles. The primary challenges for these units are low productivity and uneven output. With the help of the CITUS scheme, these units receive financial assistance to invest in better spinning machines and looms. This helps them improve production efficiency, reduce defects, and make high-quality products.

Coir pith processing units

These units deal with coir pith, which is a by-product of fiber extraction. They process coir pith into blocks, briquettes, and pellets. But without the use of adequate technology, pith handling can lead to storage and environmental issues. The CITUS scheme encourages coir pith units to adopt modern processing systems. These systems convert coir pith into compost without harming the environment.

Coir plywood manufacturing units

These units use coir-based materials for plywood and board manufacturing. Precision and uniformity are critical in this segment. The CITUS scheme helps these units invest in advanced machinery that improves bonding strength, finish quality, and production efficiency. High-quality coir plywood products are better placed to compete in the national and international markets.

Coir products manufacturing units

These units are engaged in the manufacturing of diverse coir products, including mattresses, cushions, rugs, mats, and upholstery. Technology upgradation via the CITUS scheme allows these units to automate key processes, improve product quality, create world-class designs, and scale production. This helps them meet export requirements and adapt to changing market preferences.

Other important conditions under the CITUS Scheme

Assistance is available only up to the investment limits prescribed for Small and Medium Enterprises under the MSME Act.
After the application is submitted, officials from the Coir Board will inspect the unit, verify the documents, and determine the eligible amount of assistance in accordance with the scheme guidelines.
All machinery, equipment, and motors must comply with the minimum BIS standards updated from time to time.
Beneficiaries are free to procure machinery from vendors of their choice. However, they must take GST invoices for the same. Import of machinery is also permitted, subject to proper justification.
Equipment suppliers must provide a minimum warranty period of two years.
Beneficiaries are selected strictly based on the rankings assigned by the Project Steering Committee.

Role of nodal agencies in implementing CITUS

The Coir Board, based in Kochi, functions as the nodal agency for implementing the CITUS scheme. It is responsible for issuing guidelines, receiving and reviewing applications, and overseeing the overall execution of the scheme. The Board also carries out field inspections, verifies documents, and determines the eligible assistance amount for each unit.

The nodal agency also collaborates with other institutions for the proper implementation of the scheme. For instance, the Coir Board authorizes certain financial institutions to provide subsidized loans for the procurement of machinery under the scheme. It also appoints technical agencies to evaluate machinery and technology. Together, they ensure that the assistance reaches genuine units and is used strictly for the intended purpose.

How to apply for the CITUS Scheme?

The process to apply for financial assistance under the CITUS scheme is straightforward and involves a few simple steps:

1. Visit the Coir Board portal and log in to your user account.

2. Submit a detailed project report in the prescribed format to the nearest Regional/Sub-regional Office.

3. Wait for the Coir Board to review your application and provide the In-Principle Approval (IPA).

4. Purchase and install the plant/machinery/equipment as per the IPA.

5. Start business operations using the new technology.

6. Submit the application within a year after starting business operations.

7. The subsidy amount will be credited directly into your bank account.

Key benefits of the CITUS Scheme for coir entrepreneurs

The CITUS scheme offers several benefits for coir units and entrepreneurs:

Helps in machinery and technology upgradation through financial support.
Improves productivity by enabling faster and more efficient production processes.
Reduces operational costs through automation.
Enhances product quality by reducing defects and improving consistency.
Lowers dependency on manual labor.
Supports better utilization of raw materials and waste reduction.
Helps units compete more effectively in both domestic and international markets.

Final overview of the CITUS Scheme

The Coir Industry Technology Upgradation Scheme (CITUS) plays a crucial role in strengthening the coir industry by supporting technology upgradation across different types of units. Furthermore, it helps businesses improve productivity, maintain consistent quality, and reduce operational strain. The scheme also encourages units to become more competitive in changing markets while protecting traditional livelihoods.

As a coir entrepreneur, it’s important to understand the eligibility criteria and other conditions binding the scheme benefits before applying for it. For more details regarding the application procedure and assistance disbursement, you can visit the nearest RO/SRO or go to the official website of the Coir Board, which serves as the nodal agency for this scheme.

FAQs

Who is eligible to apply for the CITUS Scheme?

Coir units falling under the small and medium enterprise category, as per MSME norms, are eligible to apply for the CITUS scheme. This includes primary processing units, spinning and weaving units, coir pith units, and product manufacturing units that meet the scheme’s investment and operational criteria.

Are MSMEs eligible under the CITUS Scheme?

Yes. Registered MSMEs are eligible for financial assistance under the CITUS scheme. They must be engaged in coir-related activities and should not have availed similar Central Government subsidies for the same purpose.

Which types of coir units are covered under the scheme?

The CITUS scheme covers a wide range of coir units to ensure the benefits reach both small operators and large production units. The types of coir units covered include primary fiber processing units, spinning and weaving units, coir pith processing units, coir plywood manufacturing units, and units producing finished coir products.

What benefits does the CITUS Scheme provide to coir units?

The CITUS scheme helps coir units upgrade machinery at a lower cost. It improves productivity, reduces manual effort, and enhances product quality. The scheme also helps units control production costs, reduce wastage, and compete better in domestic and international markets.

Is financial assistance available under the CITUS Scheme?

Yes, financial assistance is available under the CITUS scheme in the form of a capital subsidy. The support helps coir units invest in modern machinery and technology. The maximum financial assistance is capped at prescribed limits, while the remaining cost is borne by the entrepreneur.

What is the maximum subsidy offered under the CITUS Scheme?

The maximum financial assistance available under the CITUS scheme is capped at Rs. 2.5 crore per unit or project. Eligible units can avail of up to 25% subsidy on the purchase of modern machinery or equipment for coir production or extraction.

Does the scheme support technology upgrade?

Yes, technology upgradation is a core focus of the CITUS scheme. It supports the replacement of outdated machinery with modern equipment. This helps coir units improve efficiency, reduce production losses, and maintain consistent quality across different stages of manufacturing.

How long does it take to receive benefits after approval?

Once the application is approved, the timeline depends on inspections, document verification, and completion of machinery installation. In most cases, benefits are released after the Coir Board confirms compliance with scheme guidelines, which can take a few weeks to a few months.

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