Gujarat Textile Policy 2024: Key Incentives & Subsidies for Textile Manufacturers

Introduction

The textile industry is one of the most important sectors of the economy in terms of employment generation. Gujarat has established itself as a textile hub, India’s highest cotton-producing state. The Government of Gujarat launched the most-awaited Textile Policy 2024 on October 15, 2024. The policy aligns with the visions of “Make in India” and “Aatmanirbhar Bharat”.

 

The policy provides comprehensive government support, including capital subsidy, interest subsidy, power subsidy, payroll assistance, and other incentives for textile units. Since the last textile policy, “Scheme for Assistance to Strengthen Specific Sectors in the Textile Value Chain 2019,” expired 8–9 months ago, many industries faced challenges due to a lack of incentives, with some even considering relocating outside Gujarat. This textile policy encourages these industries to stay, sustain, grow, and establish manufacturing in Gujarat.

Eligible Activities

The following activities are covered under Gujarat Textile Policy:

Activity: 1

• Garments
• Apparel & Make-up
• Technical Textiles Activity (including Composite Unit)

Activity: 2

• Weaving (with or without preparatory)
• Knitting
• Dyeing & Processing
• Texturizing, Twisting
• Embroidery
• MMF Spinning to manufacture yarn from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (excluding Spinning activity of Cotton and Synthetic Filament Yarn)

Key Incentives and Subsidies for Textile Manufacturers

1. Capital Subsidy:

The capital subsidy will be from 10% to 35% of eFCI (Eligible Fixed Capital Investment) with a maximum cap of Rs. 100 crore based upon the taluka category and activity.

Category of Taluka	Activity 1	Activity 2
Category 1 & PM Mitra Park	35% eFCI	20% eFCI
	Maximum Rs. 100 Crore	Maximum Rs. 50 Crore
Category 2	30% eFCI	18% eFCI
	Maximum Rs. 100 Crore	Maximum Rs. 50 Crore
Category 3	20% eFCI	10% eFCI,
	Maximum Rs. 50 Crore	Maximum Rs. 40 Crore

2. Interest Subsidy:

Interest subsidy ranges from 5% to 7% of eFCI for a tenure of 5 to 8 years, with a maximum cap of 2% to 3% of eFCI per annum based upon the taluka category and activity.

Category of Taluka	Activity 1	Activity 2
Category 1 & PM Mitra Park	@7% on Term Loan for 8 Years	@7% on Term Loan for 7 Years
	Maximum 3% of eFCI per annum	Maximum 2% of eFCI per annum
Category 2	@7% on Term Loan for 8 Years	@7% on Term Loan for 7 Years
	Maximum 2.5% of eFCI per annum	Maximum 2% of eFCI per annum
Category 3	@5% on Term Loan for 6 Years	@5% on Term Loan for 5 Years
	Maximum 2% of eFCI per annum	Maximum 2% of eFCI per annum

3. Power Tariff Subsidy

A power tariff subsidy is available for both listed eligible activities. Rs. 1/unit (kWh) is available for power from DISCOM or renewable power through open access for 5 years from DoCP (Date of Commercial Production).

4. Payroll Assistance:

This ranges from Rs. 3000 to Rs. 5000 per female worker and Rs. 2000 to Rs. 3000 per male worker per month, depending on the activity.

5. Assistance to SHG for Job Work

Financial assistance by way of training assistance of Rs. 5000 per month per member for 3 months and payroll assistance extend to the 25% of job work value turnover limited to Rs. 5000 per month per member for 5 years.

6. Other Schemes for Comprehensive Support to Textile Units:

• Assistance for Quality Certification
• Assistance for saving in consumption of Energy and Water
• Assistance for Technology Acquisition

The government of Gujarat has also introduced separate slabs for labor-intensive units employing minimum employment to 4000 persons duly registered under the EPF scheme, out of which the minimum number of female employees should be at least 1000.

How Can We Help You Maximize the Benefits of Textile Policy 2024?

At SDS Fin Advisory LLP, based in Ahmedabad, we are the leading project finance consultants specializing in project loans and government subsidies. With our expertise, we simplify the process of securing financial assistance, ensuring that you can focus on growing your business while we handle loan arrangements and subsidy applications.

Conclusion

The Gujarat Textile Policy 2024 is a golden opportunity for Textile manufacturers in Gujarat, offering numerous CAPEX and operational incentives that can significantly enhance profitability and global competitiveness. This policy offers various CAPEX and operation incentives for the support of Textile manufacturers and also includes special packages for labor-intensive units. Stay tuned for the detailed guidelines and government resolutions that will outline the applicability, deadlines, and further details of the policy.