Telangana announces Textile and Apparel Incentive Scheme

Hyderabad: In a major boost to the textiles and apparels sector in Telangana, the State government announced Telangana Textile and Apparel Incentive Scheme 2017, providing a slew of capital and operational incentives for textiles and apparels industries to be established in the State. The incentives will be applicable for both new industries as well as existing units for the next five years.

As per the orders issued by Industries Principal Secretary Jayesh Ranjan on Friday, the incentives will provide towards Capital Assistance, Operational Assistance, Infrastructure Support, Capacity building and Skill development Support, and also Fibre to Fabric incentive. For units established with an investment of Rs 200 crore or above or providing more than 1,000 jobs, the incentives will be customised further.

A capital subsidy of 25 per cent will be provided for conventional textile industries and 35 per cent for technical textiles industries involved in production of medical textiles, geotextiles, agrotextiles, and protective clothing among others. An additional capital subsidy of five per cent will be provided to units promoted by SC/ST entrepreneurs or persons with disability (PWD). A capital incentive of 20 per cent of cost of plant and machinery up to Rs 5 crore per unit, will be provided to existing units for modernisation and adoption of advanced technologies. An additional rebate of five per cent will be extended on capital investment and power, for industrial units with start-to-finish production chain comprising production of textile fibre to fabric as an integrated family.

Power subsidy

Similarly, an operational assistance of up to 75 per cent will be extended towards interest rates, against loans availed for establishment of these units over a period of eight years. Power subsidy ranging from Rs 1-2 per unit will be provided depending on the size of each industry up to five years. The government will reimburse 100 per cent of stamp duty paid for land purchase or lease. Further, GST collected on end product within value chain, will be reimbursed 100 per cent for a period of seven years.

Towards infrastructure support, the government will allot land with rebate up to 50 percent on land cost for major industries or 25 per cent rental subsidy on built-up space owned by TSIIC for MSME units. Subsidies will be provided on industrial water supply, environmental conservation infrastructure, and infrastructure like roads, power and water. Under Telangana State Skills Development Mission, the government will provide subsidies towards capacity building and skill development support to facilitate reputed institutions involved in textiles-related training programmes to set up their permanent centres in the State.

Long staple cotton

Telangana is known for its production of long staple cotton, with an annual production of about 60 lakh bales. However, processing and value addition to cotton in the State is largely limited to ginning and pressing. Roughly 10 lakh bales are utilised by the 35 spinning mills having a capacity of 9.3 lakh spindles located within the State. Primary processed cotton from Telangana is being exported to states like Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh for further value addition. Lakhs of textile workers employed in well-established clusters in the country like Surat, Bhiwandi, Sholapur and Ichalkaranji are natives of Telangana, with rich experience.

The Telangana government has decided to explore rich opportunity in textiles and apparel industry with sector-focused comprehensive incentives framework for the industry, with an aim to attract investments as well as create employment opportunities. The objective is also to encourage investments in downstream processing activities focusing on spinning, weaving, knitting, processing and garment manufacturing including made-ups within the State. In addition to encouraging new units, the incentives are also aimed at supporting the existing units for their modernisation and expansion as well as marketing and promotion activities. However, the government will terminate approvals granted and recover monetary value of accorded incentive in case these industrial units fail to provide a fair and decent wage to the workforce.