The Government of Gujarat has launched the Gujarat New Textile Policy 2024 to further strengthen the state’s textile sector. This policy is designed to support the growth and modernization of the textile industry, particularly focusing on key sectors such as garments, technical textiles, weaving, knitting, and MMF (Man-Made Fiber) production. By offering significant financial assistance through various subsidies and incentives, the government aims to enhance competitiveness, sustainability, and employment generation within the industry. Let’s explore some key highlights of this comprehensive policy.
Let’s explore some key highlights of this new policy.
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Capital Subsidy
The capital subsidy offered under this policy is a major incentive for businesses looking to invest in new textile projects or expand existing operations. Depending on the activity and the taluka (district) category, businesses can avail a subsidy ranging from 10% to 35% of the Eligible Fixed Capital Investment (eFCI). The subsidy cap varies between ₹40 crore to ₹100 crore, making it an attractive option for both small and large enterprises.
This provision is intended to boost capital investments in the textile sector, which will lead to the modernization of existing infrastructure and the establishment of new facilities, particularly in areas that need more industrial activity.
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Interest Subsidy
To reduce the financial burden on textile businesses, the policy offers an interest subsidy ranging from 5% to 7%, with an upper ceiling benefit of 2% to 3% of eFCI depending on the activity and category of taluka. This interest subsidy is available for a period of 5 to 8 years, making loan repayment more manageable and promoting long-term sustainability of businesses.
The interest subsidy is especially beneficial for startups and growing companies that rely on loans to fund their projects. By reducing the interest load, the government is ensuring that textile units can focus on scaling up without being overburdened by financial obligations.
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Power Tariff Subsidy
Energy costs are a major concern for industries, and the textile sector is no exception. To mitigate this, the Gujarat New Textile Policy 2024 introduces a power tariff subsidy of ₹1 per unit for a period of 5 years from the date of production.
This reduction in energy costs will significantly benefit textile companies, particularly those that rely heavily on energy-intensive processes. By lowering operational expenses, businesses will have more room to invest in other critical areas such as technology, research, and innovation.
In Conclusion
The Gujarat New Textile Policy 2024 is a comprehensive plan designed to promote growth, modernization, and sustainability in the textile industry. With attractive capital, interest, and power subsidies, the policy is set to foster increased investment, reduce operational costs, and support the development of textile infrastructure across the state. For businesses in the textile industry, this policy represents a golden opportunity to scale up and compete on both national and global levels.
Moreover, the policy places a strong emphasis on employment generation by providing payroll assistance ranging from ₹2,000 to ₹5,000 per month per worker, along with special incentives for female workers. It targets labor-intensive units that employ over 4,000 workers, including at least 1,000 female employees, offering enhanced subsidies to foster a more inclusive workforce.
The government has also introduced dedicated support for Self-Help Groups (SHGs), providing payroll and training assistance to empower local communities and promote entrepreneurship within the textile sector.
By leveraging these subsidies, Gujarat aims to solidify its position as a key player in India’s textile industry and contribute significantly to the state's economic growth.
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