Government policies and schemes

The Government of India has extended a host of policies and incentives to the technical textile industry to encourage growth in the sector. These incentives are provided by Central Government as well as by some progressive states anchoring the textile sector.

a. Scheme for usage of agro textiles in North Eastern Region (Fund allocation – US$ 10 million (INR 55 Crs))

Aim: The aim is to utilize Agrotextiles in improving the horticulture and floricultural produce of the NE states. With increasing acceptability of Agrotextiles, entrepreneurship in the area of agrotextiles production in the country will get an impetus. The growth of usage of Agrotextile products in the country will thus benefit both agriculturists as well as textile entrepreneurs in the country.

Main components of the scheme:

It is proposed that in the project period (5 years), Agrotextiles will be utilized to improve the horticulture and floricultural produce of the Northeast states by providing technological and financial support for establishing the demonstration centres and disburse Agrotextile-Kit with overall fund outlay of US$ 10 million.

The proposed scheme’s project targets will be with respect to following two components:

  1. Creating awareness, setting –up of Demonstration Centre and developing capacities
  2. Provide/disburse Agrotextile-Kit in the NER states

Target and expected outcomes:

  • Increased consumption of Agrotextile products in the country and boosting Agrotextiles production and investment synergies
  • Improved yield of horticulture and floriculture produce from the North- East region of the country in terms of Quantity as well as Quality of produce
  • Awareness on use of quality certified agrotextile products in the country
  • Demonstration centers depicting the benefit of usage of Agrotextile products suitable for the region
  • Study on the performance of various types of agrotextiles laboratory tests and simulation modeling for their influence on control of environmental factors like soil, temperature, heat and light and also the plant growth
  • Cost-benefit analysis to the cultivators on usage of these products and develop Capacities amongst the State Governments and other agriculture agencies

b.   Technology Mission On Technical Textiles (TMTT):

Aim: Improvement of basic infrastructure in terms of testing facilities, lack of market development support, skilled manpower, R&D, improved regulatory measures, preparation of specifications and standards for technical textiles, etc.

Main components of the scheme:

To attain the desired aim, Government has launched TMTT with two mini-missions for a period of five years (from 2010-11 to 2014-15) with a fund outlay of US$ 36.36 million, as under:

I. Mini Mission-I (Financial outlay INR156 crore):

  • Upgrade of existing four COEs: The existing COEs will be upgraded in line with new COEs, i.e. with incremental facilities like incubation centres and development of prototypes and provision for appointment of consultants. (Fund allocation US$ 10.18 million)
  • Setting up of four new COEs in Composites, Non-Wovens, Indutech and Sportech (Fund allocation US$ 18.18 million)

II. Mini Mission-II (Financial outlay INR44 crore)

  • Support for Business Start Up (Fund allocation US$ 0.55 million)
  • Fund support for organizing workshops/ seminar (Fund allocation US$ 0.91 million)
  • Support for Contract Research (Fund allocation US$ 2.00 million)
  • Market development support for sale to the institutional buyers (Fund allocation US$ 2.73 million)
  • Identification of regulations required for promotion of technical textiles (Fund allocation US$ 0.91 million)
  • Support for domestic & export market development of technical textiles (Fund allocation US$ 0.91 million)

Target and expected outcomes:

I. Mini- Mission I:

  • Setting up of 4 COEs in the field of Non woven, Composites, Indutech & Sportech
  • Upgradation of existing 4 COEs covered under SGDTT

II. Mini- Mission II:

  • 30 business start up projects
  • 52 workshops to sensitise stakeholders
  • Social compliance through standardization regulatory measures: in segments, viz. Geotech, Agrotech, Meditech, Protech
  • Market development support through 30 buyer seller meetings
  • 50 units to be assisted under Market development support for export sales
  • Fund support for 20 contract research projects

Performance of the scheme under 11th Five Year Plan

  • 4 Centres of Excellence (COEs) for Non-Wovens, Indutech; Composites and Sportech were established
  • 4 COEs for Geotech, Agrotech, Protech and Meditech were upgraded as a one stop shop for Technical Textiles
  • More than 24 awareness programs have been organized in association FICCI,CII, ICC, COEs, ROs etc
  • More than 10 buyer seller meets (BSM) have been organized
  • More than 26 companies have received approval from Office of Textile Commissioner under Market development Support for export sales
  • 9 proposals have been registered with Office of Textile Commissioner under Contract Research component, which are under screening and evaluation
  • 5 consultants have been empanelled to provide business start-up support to the industry

For more details on TMTT, please refer:

c.    Technology Upgradation Fund Scheme (TUFS)

All technical textile machinery is covered under the Technology Upgradation Fund Scheme (TUFS). In the modified TUFS applicable from 01-04-2007, specified technical textile machinery has been provided with additional benefit in terms of 10% capital subsidy in addition to 5% interest reimbursement.

d.    Concessional custom duty for specific Technical Textile Machinery

Major machinery required for technical textiles has been placed in the concessional custom duty list of 5% of list 46, Notification No. 21/2002-CUS of Customs Tariff.

e.    Focus Product Scheme (FPS) for Technical Textiles

The objective of this scheme is to incentivize export of products that have high export intensity or employment potential in order to offset infrastructure inefficiencies and other associated costs involved in marketing these products. Exports of notified products to all countries (including SEZ units) shall be entitled for Duty Credit scrip equivalent to 2 % of FOB value of exports (in free foreign exchange).

As per DGFT’s Policy Circular No. 42 (RE-2010)/2009-14 dated 21 October 2011, there are 33 Technical textile products that are allowed for FPS benefits under this scheme. The details of technical textile products covered under the scheme are given at Annexure – I.

f.   Other Government initiatives

a)    Under the Scheme for Integrated Textile Parks (SITP), the Government provides assistance for creation of infrastructure in the parks to the extent of 40% limited to US$ 8.82 million. 

b)    Under Integrated Skill Development Scheme (ISDS), it is proposed to train 22,000 personnel in technical textile sector during the year 2010-11 & 2011-12.

c)    FDI is permitted through automatic route without any limit on the extent of foreign ownership for in-bound investments in the textile sector. Thus, there is no restriction on any amount of FDI, with or without local partners. Government incentives are equally applicable to FDI units.