Govt Clears New Tech Fund Scheme for Textile Industry

Scheme seeks to help industry upgrade operational tech, offers fixed subsidies to techpreneurs.

Published: 31st December 2015 03:27 AM  |   Last Updated: 31st December 2015 03:28 AM   |  A+A-

NEW DELHI: The textile sector is set to receive the long awaited assistance with the Cabinet Committee on Economic Affairs (CCEA) approving the amended Technology Upgradation Fund (TUF) scheme on Wednesday. The move is expected to help in creating more than 30 lakh jobs and boost exports in the sector.

“The amendments in the scheme are expected to plug the loopholes in the earlier scheme and improve ease of doing business. It will also give a boost to employment generation and exports in the textile sector in a big way,” a official statement said.

Reacting to the approval of the amended TUFs, Prabhu Damodharan, secretary, Indian Texpreneurs Federation said, “It is a timely support and in continuation of the recent initiatives extended by the Centre to the textile sector. The textile industry, particularly those located in Tamil Nadu will benefit from this.” 

The amended scheme would give a boost to ‘Make in India’ initiative in the sector and is expected to attract investment to the tune of Rs 1 lakh crore and create over 30 lakh jobs. The scheme seeks to help the textile industry upgrade operational technology and provides fixed subsidies to entrepreneurs who invest in this regard.


The textile industry is India’s largest employer after agriculture, accounting for 14 per cent of India’s exports, but has recently lost ground to Bangladesh and Vietnam in the global market as the preferred supplier for readymade garments.

While more than Rs 21,000 crore has been provided as assistance to the industry during 1999–2015, the core issue of mass adoption of newer technologies, crucial for making the textile industry globally competitive and reducing soaring capital costs still remains.

Medium and small scale players in the industry have been the main beneficiary with total investments worth Rs 2,71,480 crore being generated along with nearly 48 lakh new jobs.

The amended scheme lays emphasis on the promotion of Technical Textiles, a sunrise sector, for exports. It will also encourage better quality in processing industry and check the need for import of fabrics by the garment sector. Conversion of existing looms to better technology looms will also receive a major push for improvement in quality and productivity.

The industry utilised Rs  12,383 crore against the budgetary allocation of Rs 13,785 crore during the 11th Plan. Allocations under the previous RR-TUF scheme did not prescribe sectoral ceilings for the spinning, powerloom and handloom sectors. Investments in the sub-sector of spinning were Rs 34,347 crore and in the weaving sector, including powerlooms and handlooms was Rs 9,750 crore. The government started with a capital subsidy when it was introduced in 1999. Later, the mode of relief was changed to interest subvention.

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