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 offers comprehensive government support, including capital subsidies, interest subsidies, power subsidies, payroll assistance, and other incentives for textile units. Since the “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 themselves, grow, and establish manufacturing in Gujarat.

Eligible Activities

The following activities are covered under the 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 on the taluka category and activity.

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.

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. 3,000 to Rs. 5,000 per female worker and Rs. 2,000 to Rs. 3,000 per male worker per month, depending on the activity.

5. Assistance to SHG for Job Work

Financial assistance is provided in the form of training assistance of Rs. 5,000 per month per member for 3 months and payroll assistance extended to 25% of job work value turnover, limited to Rs. 5,000 per month per member for 5 years.

6. Other Schemes for Comprehensive Support to Textile Units:

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

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

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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 provides various CAPEX and operational incentives to support textile manufacturers, and also includes special packages for labor-intensive units. Stay tuned for the detailed guidelines and government resolutions that will outline the policy’s applicability, deadlines, and further details.

FAQ

Q1. What is the Gujarat Textile Policy 2024?
A1. The Gujarat Textile Policy 2024 is a government initiative launched on October 15, 2024, to provide comprehensive incentives and subsidies for textile manufacturers, covering capital, interest, power, and payroll assistance for a period of five years.​

Q2. Who is eligible to apply for incentives under this policy?
A2. Eligible entities include textile manufacturing units, labor-intensive units, and Self-Help Groups operating across the textile value chain—such as garments, weaving, knitting, dyeing, processing, and technical textiles.​

Q3. What are the main subsidies available under the Gujarat Textile Policy 2024?
A3. The policy offers capital subsidies (10%-35% of eligible investment), interest subsidies (5%-7% for up to 8 years), power tariff subsidies (Rs. 1/unit for 5 years), payroll assistance (up to Rs. 5,000 per worker/month), and special assistance programs for SHGs and quality certifications.​

Q4. How long will the policy be effective?
A4. The operative period of the Gujarat Textile Policy 2024 spans from October 1, 2024, to September 30, 2029, covering five years.​

Q5. How can textile manufacturers apply for subsidies?
A5. Applications for subsidies and assistance must be submitted through designated government portals or nodal agencies, with all supporting documents regarding investments and operations in Gujarat.​

Q6. Are there special benefits for large or labor-intensive textile units?
A6. Yes, labor-intensive units employing at least 4,000 persons (1,000 of whom must be women) are eligible for enhanced subsidies and extended payroll assistance.​

Q7. Is a power subsidy applicable to units using renewable energy?
A7. Yes, the power subsidy applies to electricity from both DISCOM and renewable power procured through open access, supporting sustainability goals.