Published on October 28, 2013

This year major policies has been announced by the central as well as state governments to enhance textile sector. Haryana government announced the deduction in VAT (Value Added Tax) rate for this industry, including home textile and woolen, from 12.5% to 5%. Due to Several policies made by Rajasthan Government textile industry in this state is expecting about 100 billion new investment in next 7 years. These policies will include interest subsidy for setting up new industries and reimbursements.

After a year of Announcement of the Textile Industry Promotion Policy 2012, the government of Gujarat has notified the same by enabling textile units to receive government assistance under the policy. The main objective of the policy is to have integrated approach to strengthen the value chain-“Farm to Fiber to Fabric to Fashion to Foreign (5 Fs), which will improve the growth of the textile industry.

This policy aims to attract Rs.200 billion investment in the state over the next five years for this sector, resulting in creation employment for 2.5 million people. The new policy provides interest subsidy of 5% without an upper cap on the amount for the period of five years on new plant & machinery. The west Bengal government has finalized its textile policy in August 2013. According to the policy state government will set up 200 handloom clusters, with an average of 10 clusters in each district. State will also set up Spinfed Holding Company by bringing all mills in states under one umbrella.

The government of Karnataka has also drafted a textile policy that will be placed before the State Cabinet for approval. This new textile policy is expected to attract about Rs.10, 000 crore investment in the state for textile sector. Major state where textile industry is moving at good pace is looking for more investment in this sector by introducing various facilities and taking support from the central government.