Gujarat Textile Policy: Interest Subsidy (Fiscal Incentives to Labour Intensive Unit)
The “Gujarat Textile Policy” introduced by the Industries and Mines Department aims to create a vibrant Textile Sector ecosystem and generate enormous employment opportunities in the State.
About This Scheme
The “Gujarat Textile Policy” is an umbrella scheme introduced by the Industries and Mines Department, Gujarat. It aimed at augmenting investments in the textile sector and strengthening the textile value chain across each sub-sector, while also focusing on strengthening the garments and apparel as well as technical textiles industry. Effective from October 1st, 2024 to September 29th, 2029, this initiative focuses on reducing the carbon footprint and promoting green growth, thereby making the sector globally competitive and environmentally sustainable.
The component “Interest Subsidy” provides financial assistance in the form of a credit-linked interest subsidy for eligible industrial activities. This subsidy helps reduce the financial burden on industrial units by reimbursing a portion of the interest paid on term loans for Gross Fixed Capital Investment.
Benefits
Financial Assistance:
| Category of Taluka | Activity 1 | Activity 2 |
| Category 1 & PM MITRA Park | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum |
| Category 2 | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum |
| Category 3 | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum | 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum |
Eligibility Criteria
The industrial unit must be recognized as a Labour Intensive Unit.
Industrial units must have taken a sanctioned term loan for Gross Fixed Capital Investment.
The loan disbursement date must be on or after 01/01/2024 for units under implementation as of 01/10/2024.
The unit must apply within one year from the Date of Commercial Production (DoCP).
The unit must be in regular repayment of installments and interest.
The unit must bear at least 2% interest on the term loan.
Eligible Activities:
Activity 1:
Garments, Apparel & Made-ups, Technical Textiles Activity (including Composite Unit)
Activity 2:
Weaving (with or without preparatory), Knitting, Dyeing & Processing, Texturising, Twisting, Embroidery and MMF Spinning to manufacture yarn from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (excluding Spinning activity of Cotton and Synthetic Filament Yarn).
Labour Intensive Unit:
Labour Intensive Unit means a new industrial unit that provides minimum employment to 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand). The existing unit that carrying out expansion/diversification of activities , during the operative period of the scheme and provides totally new employment to minimum 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand).
Exclusions
Application Process
Apply Offline
Application for Registration:
Step 1: The application has to be made to the Industries Commissioner in the
prescribed format
along with the following documents within one year from loan disbursement, production start, or policy operative date (whichever is later).
Step 2: On receipt of the application and after the scrutiny and verification of relevant documents as per the procedure prescribed, registration certificate will be issued by the Industrial Commissioner.
Application for Provisional/Final Eligibility Certificate:
Application for Industrial Unit:
MSME Units having GFCI up to INR 10 Crore: After DoCP, the Industrial Unit shall submit an application to the General Manager, District Industries Center.
MSME Units having GFCI above INR 10 Crore and up to 50 Crore: After DoCP, the Industrial Unit shall submit an application to MSME Commissioner for Provisional Eligibility Certificate within 1 year from DoCP or within one year from the date of issuance of this GR, whichever is later.
Other than MSME Units: After DoCP, the Industrial Unit, having registration shall submit an application for Provisional Eligibility Certificate to the Industries Commissioner within 1 year from DoCP or within 1 year from the date of issuance of the registration certificate, whichever is later.
Contact Us:
Industries Commissionerate
District Industries Center
Gross Fixed Capital Investment
Gross Fixed Capital Investment means investment made in Building, Plant and Machinery, Electrification, Tools and Equipment, Accessories, Utilities, Effluent Treatment Plant and other assets, excluding land, required for manufacturing the end product/s.
Only assets acquired and paid for during Eligible Investment Period of the project under this Policy shall be considered as the Gross Fixed Capital Investment (GFCI) for the purpose to determine the eligible Fixed Capital Investment under this Policy.
Eligible Fixed Capital Investment
Eligible Fixed Capital Investment (eFCI) means the following components of investment made during the Eligible Investment Period as per para 3.20 of this GR.
New Building:
A new building means a new building constructed, or acquired as a new and unused building, for the project including administrative building. The cost of the new building shall be calculated as per the actual cost or the Schedule of Rates (SOR) of the relevant year of the R&B Department of the State Government, whichever is lower. Building acquired under lease or on rental basis, except GIDC sheds, will not be considered as Eligible Fixed Capital Investment. No cost incurred on acquisition of old building, or the expenditure incurred on repairing a building, will be considered as Eligible Fixed Capital Investment. Dormitory Housing facilities set up for workers and staff of Industrial Units shall also be eligible.
Plant and Machinery:
Plant and Machinery means new plant and machinery, utilities, dies and moulds, including cost of transportation, foundation, erection, installation and electrification, capitalized under the head of plant and machinery. The electrification cost will include the cost of substation and transformer installed by the Industrial Undertaking at the site.
Plant and machinery shall include:
Plant for captive power generation through renewable.
Plant for pollution control measures, including facility for collection, treatment, disposal of effluent or solid/ hazardous waste, Zero Liquid Discharge Plant (ZLD).
Imported second-hand machinery not more than ten years old and with a residual life of minimum ten years, duly certified by the competent authority such as Chartered Engineer.
Investments towards components other than Plant and Machinery shall be limited only up to 20% of eligible FCI.
Fixed Capital Investment at the workplace of SHG:
Building/Shed constructed at the workplace of SHG
Plant and Machinery installed at the workplace of SHG including installation and electrification.
This investment will be considered as a part of the project, if a legally enforceable job work contract is executed with the SHG for at least a period of five years.
Ineligible Capital Expenditure/Assets
The following expenditure shall not be considered for calculating the Eligible Fixed Capital Investment:
Land and land development cost
Working Capital
Goodwill
Royalty
Preliminary and Pre-operative expenses
Indigenous second-hand Plant & Machinery
Interest Capitalized
Rented or leased property
Anything which has not been included in the eligible FCI.
Term Loan
Term Loan means loan sanctioned by the financial institutions / Banks / External commercial borrowings sanctioned by overseas institutions (except NBFCs) for the setting up of the project by an Industrial Undertaking. However, only the amount actually disbursed during the Eligible Investment Period against the sanctioned Term Loan will be considered for the incentives under this Policy.
Date of Commercial Production (DoCP)
In case of New Industrial Unit, the DoCP shall be the date of First Sale Bill of the product/s for which the project has been set up. In case of Expansion / Diversification / Modernization, the DoCP shall be the date of First Sale Bill of the product/s being manufactured by Expansion/ Diversification / Modernization Project.
Official Source: View on myScheme.gov.in
Eligibility Criteria
The industrial unit must be recognized as a Labour Intensive Unit.
Industrial units must have taken a sanctioned term loan for Gross Fixed Capital Investment.
The loan disbursement date must be on or after 01/01/2024 for units under implementation as of 01/10/2024.
The unit must apply within one year from the Date of Commercial Production (DoCP).
The unit must be in regular repayment of installments and interest.
The unit must bear at least 2% interest on the term loan.
Eligible Activities:
Activity 1:
Garments, Apparel & Made-ups, Technical Textiles Activity (including Composite Unit)
Activity 2:
Weaving (with or without preparatory), Knitting, Dyeing & Processing, Texturising, Twisting, Embroidery and MMF Spinning to manufacture yarn from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (excluding Spinning activity of Cotton and Synthetic Filament Yarn).
Labour Intensive Unit:
Labour Intensive Unit means a new industrial unit that provides minimum employment to 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand). The existing unit that carrying out expansion/diversification of activities , during the operative period of the scheme and provides totally new employment to minimum 4000 (four thousand) persons duly registered under EPF scheme, out of which minimum female employee should be at least 1000 (one thousand).
Benefits
Financial Assistance:
Category of TalukaActivity 1Activity 2
Category 1 & PM MITRA Park7% on Term Loan for 8 years; Maximum 3% of eFCI per annum 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum
Category 27% on Term Loan for 8 years; Maximum 3% of eFCI per annum 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum
Category 37% on Term Loan for 8 years; Maximum 3% of eFCI per annum 7% on Term Loan for 8 years; Maximum 3% of eFCI per annum
Application Process
Apply OfflineApplication for Registration:
Step 1: The application has to be made to the Industries Commissioner in the prescribed format
along with the following documents within one year from loan disbursement, production start, or policy operative date (whichever is later).
Step 2: On receipt of the application and after the scrutiny and verification of relevant documents as per the procedure prescribed, registration certificate will be issued by the Industrial Commissioner.
Application for Provisional/Final Eligibility Certificate:
Application for Industrial Unit:
MSME Units having GFCI up to INR 10 Crore: After DoCP, the Industrial Unit shall submit an application to the General Manager, District Industries Center.
MSME Units having GFCI above INR 10 Crore and up to 50 Crore: After DoCP, the Industrial Unit shall submit an application to MSME Commissioner for Provisional Eligibility Certificate within 1 year from DoCP or within one year from the date of issuance of this GR, whichever is later.
Other than MSME Units: After DoCP, the Industrial Unit, having registration shall submit an application for Provisional Eligibility Certificate to the Industries Commissioner within 1 year from DoCP or within 1 year from the date of issuance of the registration certificate, whichever is later.
Contact Us:
Industries Commissionerate
District Industries Center
References & Official Links
Scheme Details
| Full Name | Gujarat Textile Policy: Interest Subsidy (Fiscal Incentives to Labour Intensive Unit) |
| Short Title | GTCISLIU |
| Level | State |
| Scheme For | Infra |
| Categories | Business & Entrepreneurship |
| States | Gujarat |
| Gender | All |
| Age Range | 2 — 3 years |
| Area | Both |
| Source | myScheme.gov.in ↗ |