Apparel Online India Magazine February 1st Issue 2019 | Page 22

TEX-FILE
Gujarat unveils new textile policy;
many incentives in line for value chain
Ahead of the Vibrant Gujarat Global Summit 2019, the Gujarat Government announced the much-awaited textile
policy. The State Government unveiled a slew of measures to boost the industry – from credit-linked interest
subsidy on loans, subsidy on power tariffs, incentives for complying with water conservation and environmental
pollution norms – to doling out benefits for setting up textile parks.
Key announcements
manufacturing value chain. According
to the new policy, sectors like ginning,
spinning and technical textiles gained
tremendous growth during Gujarat
Textile Policy 2012. Exempting
these two key activities, the State
Government has covered the entire
value chain under the revised support
scheme. On the other hand, the
incentives to investors would be in the
form of interest subsidy and power
tariff subsidy.
Gujarat’s textile policy for 2019 will
also provide assistance in technology
upgradation, environmental
compliance cost apart from the setting
up of textile parks. The textile sector
is expected to reach US $ 250 billion
by this year, which was around US $
150 billion in 2017. “The Government
analysed the existence of all segments
in the textile value chain and
identified gaps in certain segments.
After careful consideration, the
Government has decided to come up
with a new scheme to strengthen the
value chain and extend support to
the textile industry in the state,” an
official statement said.
The new textile policy will benefit
almost all the sectors including
composite units, weaving, knitting,
dyeing and processing, printing,
technical textiles, made-ups and
other manufacturing activities like
embroidery, winding, sizing, twisting
and crimping. The new textile policy
assures financial aid via credit-linked
interest subsidy of 6 per cent for
micro, small and medium enterprises
(MSME) and for large enterprises, the
subsidy would be 4-6 per cent with
an upper limit of Rs. 20 crore a year.
A separate provision for power tariff
offers subsidy for weaving and other
eligible segments up to Rs. 3 per unit
and Rs. 2 per unit, respectively. The
new policy and its benefits are valid
for five years.
A one-time financial support of
about 50 per cent of the cost with a
limit of Rs. 25 lakh for technology
upgradation and modernisation will
also be given. For establishing textile
parks, the policy provides financial
aid of over 25 per cent of capital
expenditure on common facilities and
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The State Government has also
excluded garments and apparels
from the incentives’ scheme under
the new policy. These two sectors
have been given a separate incentive
scheme under the Gujarat Garment
and Apparel Policy 2017 issued in
October 2017. Experts from the
industry feel that keeping ginning and
spinning units out may cost the State
Government in a major way, as these
units are the starting points of the
value chain.
Sanjay Jain,
Chairman, CITI
welcomed the policy
and said that other
State Governments
should take cue
from the Centre and
the Government of
Gujarat, and ensure
that they do not
subsidise sectors as
the country is already
surplus on capacity.
As per official data of
various Indian states’
contribution in textile
export in 2017-18,
Gujarat stood second
in the list.
infrastructure with the limit going up
to Rs. 15 crore. Textile parks set up
under this scheme can also receive
financial support to build hostel
facilities for over 100 workers within
the park. The State Government
would reimburse the full amount of
stamp duty paid on purchase of land
required for the park. The new policy
is focusing to create local employment.
The policy makes it mandatory for
beneficiaries to employ 85 per cent
of total manpower and 60 per cent of
supervisory and managerial staff.
Mixed feeling
However as per the new policy, the
State Government has removed
incentives for two key activities,
ginning and spinning, which play
a substantial role in the textile
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The new policy will be effective
retrospectively from September
4, 2018 to December 31, 2023. The
last policy expired in September
2018 after a year’s extension, which
was introduced in 2012 for five
years’ period.
The previous policy was successful
in boosting investment in the sector,
and thereby, it generated employment
in the ginning, spinning, weaving,
knitting, apparel, denim and technical
textiles sector. It is to be noted that
Gujarat is one of the most important
states in India as far as the textile
and apparel industry is concerned,
whereas Ahmedabad is known for
fabric and garment production and
Surat is known as one of the biggest
producers of man-made fabric in
the world.