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Navigating the Fabric of Government Subsidies in Textile  Industry

Navigating the Fabric of Government Subsidies in Textile Industry

India is one of the largest producers of cotton and jute in the world and has dominated the Indian Ocean trade for centuries. It is the 2nd largest producer of silk in the world, and 95% of the world's hand-woven fabric comes from India. The textile industry has been a cornerstone of the country's economy, contributing approximately 2.3 % to the country's GDP.

The industry is highly diversified with a wide range of segments, including traditional handlooms, handicrafts, wool, silk products and technical textiles.

Being an employment-friendly industry, it is the 2nd largest employer in the country, providing direct employment to 100 million people in allied industries.

Weaving Prosperity

To drive the growth of the textile sector, the government has introduced various financial incentives, including the Production Linked Incentive (PLI), the Technology Upgradation Fund Scheme, and the Textile Cluster Development Scheme.

To boost the investment in this sector, a Capital Investment Subsidy of 20% is being offered by the Haryana government. Uttar Pradesh government is providing reimbursement of 25% of land cost on the purchase of land in industrial areas developed by the Government Development Authorities.

A subsidy of INR 3,200/- per worker per month will be provided to mega and super mega garment units in Uttar Pradesh. Textile businesses can avail 5% Interest Subsidy on term loans taken from financial institutions recognized by RBI under the Rajasthan Investment Promotion Scheme.

India is the 5th largest producer of technical textiles in the whole world, with a market size of nearly $24.3 billion, which is expected to build up to $300 billion by 2047.

The Indian government has launched an outlay of INR 10,683 crore under the Production Linked Incentive Scheme to promote the production of MMF Apparel, MMF Fabrics and Products Technical Textiles in the country. Incentives ranging from 7% to 15% across different financial years are being provided under the scheme.

One of the primary objectives of these incentives is to boost exports and build global textile brands in the country. Maharashtra government is also promoting the setting up of textile parks by providing 9 crores or 9% of project cost, whichever is lower, with the objective to generate 10 lakh employment and to encourage the setting up of Fiber to Fashion value chain.

Transforming Textile Landscape

The Government of India's strategic initiatives in the form of subsidies and PLI incentives have transformed the textiles and apparel industry, propelling it to unprecedented heights.

Companies should focus on capitalizing on such financial incentives provided by the government as it will not only lead them towards sustainability but will also ensure long-term growth and competitiveness.

By actively participating in these programs, businesses can not only enhance their production capabilities and global competitiveness but also contribute significantly to the country's economic development. Expert guidance can help businesses navigate the world of subsidies and can enhance the growth of their textile businesses.

About SubsidyPro

SubsidyPro is the most knowledgeable and trusted partner in navigating the complex world of government subsidies in India. It guides and assists entrepreneurs through the maze of subsidy programs offered by various governments. Subsidy Pro specializes in identifying eligible subsidies, preparing requisite documentation and ensuring compliance. The company helps unlock the potential of subsidies by providing customized solutions as per client’s needs and objectives to make their financial planning more viable.