India Seeks to Boost Investment in the Textiles Industry
May 5, 2011 In an attempt to inject foreign capital throughout its textile value chain, the Indian government has announced it will provide a maximum subsidy of $438 million in the hopes of attracting a total investment of more than $10.4 billion.
The Ministry of Textiles announced on May 1 the restructuring of the popular Technology Upgradation Fund Schemes (TUFS) to boost investments in the textiles sector. All segments within the textiles industry are expected to benefit from the scheme, which will be in effect from April 28, 2011 to March 31, 2012. It will provide a maximum subsidy across the textiles supply chain from spinning, power loom, garmenting, processing and technical textiles.
The objective of the restructured scheme is to leverage investments in the textiles sector by encouraging balanced growth across the value chain, the government says.
Spinning units with matching capacity in upward processing are eligible for 5% interest reimbursement, while standalone spinning upgradation projects are eligible for 4% interest reimbursement. Value-addition sectors such as power looms, garmenting, processing and technical textiles are in for additional benefits. The government will provide a 10% capital subsidy and 5% interest reimbursement on projects involving new shuttleless looms. Processing, garmenting and technical textiles sectors can get 10% capital subsidy and 5% interest rebate on specified machinery. The interest reimbursement will be for a maximum period of 7 years.
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