Gujarat unveils ‘Navi Gujarat Vastraniti’ (Gujarat Textile Policy) 2012

September 5, 2012 Author: admin

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New Textile Policy to ensure Gujarat’s cotton growers get better price realization at national and international markets, guarding them from the Centre’s anti-farmers and anti-export policies

Gujarat Government’s slew of incentives to infuse new life to textile industry:

• Starting cotton spinning and weaving parks around cotton growing areas;
• Interest subsidy for value-addition chain from ginning to spinning, weaving, processing, garment manufacturing and technology up-gradation;
• Refund of VAT on expansion of existing and new units in spinning and readymade garments;
• Power tariff concession for new cotton spinning and weaving units;
• Financial assistance to skill development centres for textile industry;
• Financial assistance for technology acquisition for value chain; and
• Support for energy and water conservation and environmental compliance.


Chief Minister Narendra Modi has announced a new ambitious Gujarat Vastraniti (Gujarat Textile Policy) 2012 to establish Gujarat’s unique identity at national and international market, in recognition of the state’s enviable march to another ‘White Revolution in Cotton’, thanks to the untiring efforts of the cotton growers.

The new Textile Policy is expected to attract investment of over Rs.20,000-crore, creating new employment opportunities for over 25 lakh people, 50 per cent of them being rural women, during the next five years period. This will also increase the state’s revenue and growth rate along with growth of the textile industry.

Gujarat has recorded an exponential growth in raw cotton production during the last ten years. It is up from 23-lakh bales to 1.23-crore bales over this period, particularly due to farmers adopting Gujarat Government-sponsored scientific methods of farming and BT cotton. Gujarat cotton has high demand in China, Europe and other markets.

The objective of the new policy is in keeping the interest of the cotton growing farmers, better price realization in national and international markets, and value addition in the entire chain. It is also to protect the cotton growers of Gujarat from the present Congress-ruled UPA Government’s anti-farmer and ant-export policies. The Centre bans export on raw cotton exactly when the international prices are highest. It cost dearly the Gujarat farmers with a loss of Rs.14,000-crore during the outgoing season.

It has an integrated approach to strengthen the value chain “Farm to Fibre to Fabric to Fashion to Foreign”, enhancing sustainable growth of farmers and industry. It has many more unique, progressive and futuristic policy supports, financial and other supports for different schemes in different sectors, as follows:

Cotton Spinning Activities (including Ginning): The new policy is to enhance the growth of cotton farmers and ginners, by way of better price realization and to enable them to withstand in uncertainty due to price fluctuation, nationally and internationally, encouragement is made to establish new cotton spinning activities to strengthen the value chain.

- Interest subsidy of 5 per cent, without ceiling for the period of five years on new plant & machinery for Ginning & Processing;
- Interest subsidy of 7 per cent on new plant & machinery for Cotton Spinning, as well as for second hand imported cotton spinning machinery with certain conditions, without ceiling for the period of 5 years;
- Power tariff concession on new investment for cotton spinning at the rate of Re.1 per unit for 5 year period;
- Minimum 150-acre land, stamp duty exemption to developers and units, and assistance up to 50 per cent with maximum ceiling of Rs.30-crore for common infrastructure for Cotton Spinning Park with or without Weaving;
- Stamp duty exemption to developers and units in parks, and assistance up to 50 per cent with maximum ceiling of Rs.10-crore for common infrastructure in Parks and Other Textiles Activities;
- Refund of Value Added Tax (VAT) paid by Cotton-based units like ginning, spinning and weaving on purchase of cotton / cotton yarn and remission of tax collected on cotton yarn (applicable to the extent of investment in Plant & Machineries);

Modern Weaving, Knitting and Machine Carpeting Activities: It is to strengthen the value chain, development of cotton base weaving and knitting activities to boost the growth of cotton spinning in the State. Technology up-gradation of existing synthetic and filament power-loom weaving industry will also be done to fulfill the requirement of international market of art silk industry. Gujarat is a leading producer of carpet wool. Encouragement is, therefore, made to establish modern carpet manufacturing activities in the State.

- Interest subsidy of 5 per cent on new plant and machinery, without ceiling, for weaving, knitting, machine carpeting and other textile related activities, also on second hand imported weaving (power loom) with certain conditions, for the period of 5 years;
- Power tariff concession of Re.1 per unit for the 5 year period for weaving;
Dyeing & Processing: It is to have a substantial value addition through technological up-gradation and modernization in dyeing and processing sector, encouragement is made to establish energy-efficient and environment-friendly modern dyeing and processing unit.
- Interest subsidy of 5 per cent on new plant and machinery, without ceiling for the period of 5 years, in Dyeing and Processing;
- Assistance up to 50 per cent for audit report amounting to maximum of Rs.50,000, assistance up to 20 per cent of cost of equipment subject to maximum Rs.20-lakh, eligible once in 2 years during operation period of the scheme, as support for energy and water conservation and environmental compliance, for Processing Sector and Entire Value Chain.

Garments & Made-ups: Garment and made-ups are driving force for overall growth of textile value chain. It is also highly labour intensive mainly for rural women. Encouragement is therefore, made to establish new and modern garment and made-up units even in interior part of the State

- Interest subsidy of 7 per cent on new plants and machinery, without ceiling for a period of 5 years, for Garment and Made-ups;
- Refund of VAT paid by the unit on purchase of raw material and remission of tax collected on readymade garments, as VAT concession (applicable to the extent of investment in Plant & Machineries).

Technical Textile: Looking to the enormous industrial growth in the State and potential for Technical textile world-wide with applications in industries like Agriculture Medicals, Automobile, Defense etc., development of this segment will cause high value addition on textile value chain enabling to get better realization and sustainability.

- Interest subsidy of 6 percent on new plant and machinery, besides second hand imported machinery with certain conditions allowed, without ceiling for the 5 year period.

Apparel Training Institutes/Centers: This is with an objective to create skilled manpower, and specifically for rural women employment, an approach is made to establish skill development activities as per the need.

For establishing Apparel Training Institutes:

- Assistance up to 85 per cent, subject to maximum Rs.3-crore, excluding land cost, for setting up Training Institution;
- Need-based support towards equipment for up-gradation of facilities in ITIs.
- Assistance up to 50 per cent, subject to maximum Rs.20-lakh,for Training Centres;
- Reimbursement of tuition fees to trainees as assistance @ 50 per cent, up to Rs.7,000 per trainee per course;
- Reimbursement of training cost with maximum of Rs.7,000 per trainer per week, as assistance to training to trainers;

For training cost for skill development for weaving:

- Stipend to trainees @ Rs.2,500 per month for three month, and allowance to weavers @ Rs.200/day, and to jobbers @ Rs.300/day as assistance for advanced training to power loom owner/jobber and worker – as training cost for skill development for Power loom / Weaving Sector.

Technology Acquisition & Up-gradation: This is to withstand in competitive environment both nationally and internationally for adopting modern technology, an approach is made to encourage units for acquiring technology from abroad.

- Financial assistance up to 50 per cent, with maximum of Rs.25-lakh per Process/Product, once during the operating period of the scheme, also available for manufacturing textile machinery for technology acquisition for entire value chain.

Add Your Comment

Amit Patel
its a really great vision modi ji. i am sure that all world will start follow india after 2014. thank god that he gives a p.m. like you..... jay hind.
This is very good policy initiative. Mr. Modi's vision, specially weight on exporting final product rather a cotton. We should support exporting the final product, which will earn more value for us.
Krishnakumar Nair