The Indian government will provide a maximum subsidy of Rupees 1,972 crores (US $438 million) to attract an investment of approximately US $10.42 billion across the textiles value chain. A communiquÃ© dated May 1st, 2011, from the Ministry of Textiles has announced 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. The scheme will provide a maximum subsidy across the textiles supply chain from spinning, power loom, garmenting, processing and technical textiles for the period April 28, 2011 to March 31, 2012.
The objective of the restructured scheme is to leverage investments in the textiles sector by having balanced growth across the value chain, according to the government announcement. Spinning units with matching capacity in upward processing are eligible for 5 percent interest reimbursement, while stand-alone spinning upgradation projects are eligible for 4 percent interest reimbursement. Value-addition sectors such as power looms, garmenting, processing and technical textiles are in for additional benefits: the government will provide 10 percent capital subsidy and 5 percent interest reimbursement on projects involving new shuttleless looms. Processing, garmenting and technical textiles sectors are eligible for a 10 percent capital subsidy and 5 percent interest rebate on specified machinery.