India Development News & Foreign Investment Opportunities

Govt policy initiatives to promote textile industry

India captures 5% global textile trade


India captures 5% global textile trade


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The Government is implementing various schemes/programmes and has taken several policy initiatives to promote textiles industry and become globally competitive.

The various steps/initiatives taken have helped Indian Textile Industry become the 2nd largest manufacturer and exporter in the world, after China. India has a share of 5% of the global trade in textiles and apparel.

Textiles Minister Smriti Zubin Irani said in a written reply in the Lok Sabha 12 July 2019.

She also gave update on the industry.

Rebate of State and Central Taxes and Levies (ROSCTL) With effect from 7 March 2019, the Central Government has launched a new scheme viz. Rebate of State and Central Taxes and Levies (ROSCTL) on Export of Garments/Madeups.

The ROSCTL Scheme provides rebate of State and Central Taxes and Levies in addition to the Duty Drawback Scheme, through the Scheme on Export of Garments/Madeups at notified rates and value caps and will remain in force up to 31 January 2020.

Enhanced Customs Duty to boost domestic manufacturing to boost indigenous production and Make in India, Government has increased Basic Customs Duty from 10% to 20% on 501 textile products.

Special Package for Textile and Apparel sectors Rs.6,000 crores package was launched in June 2016 to boost employment and export potential in the apparel and made up segments. This package consists of Remission of State Levies for garmenting and made-ups; additional production and employment linked subsidy of 10% under ATUFS for garmenting; assistance for the entire 12% employers’ contribution towards EPF; fixed term employment in garmenting, increasing overtime caps; and income tax concessions under section 80JJAA for the garmenting sector.

Enhanced Duty Drawback Coverage/Rebate of State Levies (ROSL) on Export of Garments/Made-ups: This scheme is in operation from 20 September 2016 for a period of three years. In accordance with the recognized economic principle of zero rating of export products and in recognition of the fact that only Central Levies are rebated by way of the drawback scheme, the Central Government has decided to provide remission of State Levies in addition to the Duty Drawback Scheme through the Scheme for Rebate of State Levies on Export of Garments on an average basis only.

Amended Technology Up-gradation Fund Scheme (ATUFS): The amended Scheme was launched in January 2016 with an outlay of Rs.17,822 crores for technology upgradation of textiles industry with one-time capital subsidy for eligible machinery. The scheme has been designed to mobilize new investment of about Rs.95,000 crore and employment for 35 lakh persons by the year 2022.

SAMARTH: The Scheme for Capacity Building in Textile Sector (SCBTS) for the entire value chain of textile sector, excluding Spinning and Weaving in the organized sector, for a period of three years from 2017-18 to 2019-20 with an outlay of Rs.1,300 crore to provide skilling and skill-upgradation in the traditional sectors. Ten lakh persons will be trained under the scheme by March 2020.

PowerTex India: A comprehensive scheme for development of Powerloom sector has been launched with effect from 1 April 2017 to 31 March 2020 with components like Insitu-upgradation of plain Powerlooms, Group Work Shed Scheme, Yarn Bank Scheme, Common Facility Centre (CFC), Solar Energy Scheme, Pradhan Mantri Credit Scheme, etc.

National Handloom Development Programme and National Handicrafts Development Programme: These programmes aim at holistic development of handloom and handicrafts clusters through integrated approach. The strategic interventions under the programme include financial assistance for new upgraded looms and accessories, design innovation, product and infrastructure development, skill upgradation, training, setting up of Mega clusters for increasing manufacturing and exports, easy access to working capital through customized Mudra loans for weavers and artisans and direct marketing support to weavers and artisans.

India Handloom Brand Scheme has been launched by the Government in 2015 to enhance the quality in weaving, designing and defect free handloom products for safeguarding the interest of the buyers in the domestic and international markets. It will promote production of niche handloom products with high quality, authentic traditional designs with zero defect and zero effect on environment. Since its launch, 1,232 registrations have been issued under 122 product categories and sale of Rs.689.72 crore as reported on 31 March 2019.

Silk Samagra: The Government has been implementing a Central Sector Scheme “Silk Samagra” for development of sericulture in the country with components such as Research & Development, Training, Transfer of Technology and I.T Initiatives, support to seed organisations, coordination and market development and, quality certification Systems (QCS)/Export Brand Promotion and Technology Upgradation. R&D efforts have also been initiated to evolve new products by blending silk with other fibres such as wool, coir, cotton etc., which have demand in international markets.

Scheme for Integrated Textile Park (SITP)This scheme is implemented in Public Private Partnership mode to attract private investments in developing new clusters of textiles manufacturing. Government of India provides financial assistance up to 40% of the project within a ceiling of Rs.40 crores.

Integrated Wool Development Programme (IWDP): The Government has recently approved IWDP for implementation during 2017-18 to 2019-20 after integrating and rationalization of various schemes for holistic growth of wool sector by providing support to entire chain of wool sector from wool rearer to end consumer to increase the wool production as well as its quality.

Jute (ICARE) A project Jute ICARE (Improved Cultivation and Advanced Retting Exercise) was introduced in 2015 for improving productivity and quality of raw jute through carefully designed interventions. The project has benefitted more than 1.9 lakhs farmers in various states in the country.

Enhancement of rates under Merchandise Exports from India Scheme (MEIS): To further boost exports of apparel & made-up sectors, interest rates under Merchandise Exports from India Scheme (MEIS) has been enhanced from 2% to 4% for apparel, 5% to 7% for made-ups, handloom and handicrafts with effective from 1 November 2017.

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