States such as Telangana, Maharashtra, Odisha, and Madhya Pradesh already offer substantial incentives to textile units.

In recent months, several companies from Gujarat, including major players like Arvind and Welspun, have announced plans to invest in southern India. In response, the Gujarat government has decided to introduce an attractive textile policy to ensure the state maintains its leading position in textile manufacturing in the country.

Manchester Of The East

The textiles industry is the second most important economic activity in India in terms of employment generation after agriculture.

Gujarat, an industrially robust state, has long leveraged its geographic advantage on India's western seaboard, including ports and fertile black soil to be an industrial and textile giant. It has a history of being the largest producer of cotton in India and using that raw material to be the country's "Textile State".

The state's biggest city Ahmedabad has long been hailed as the "Manchester of the East."

Gujarat is still India's largest producer of manmade fiber, synthetic fabric, and denim, contributing about 12 per cent of the country's textile exports.

Gujarat's Textile Industry In The 21st Century

Gujarat boasts of a comprehensive textiles and apparel (T&A) value chain, from raw material availability and yarn production to fabric production and apparel manufacturing.

The state contributes 35 per cent to India's cotton production and nearly 50 per cent to manmade fiber production. Besides, almost 30 per cent of India's mill sector fabric production comes from Gujarat.

In all, the state has a significant number of medium and large textile processing houses, producing 40 per cent of India's fabric from manmade fibers and 25 per cent of the country's technical textiles.

Policy Driven Manufacturing

Over the years, the Gujarat government has introduced various textile policies to boost investment and invigorate the industry.

The Gujarat Textile Policy 2012, the Gujarat Garment & Apparel Policy 2017, the Gujarat Textile Policy 2019, and the Aatmanirbhar Gujarat scheme announced in 2022 all provided incentives including interest subsidies, power tariff subsidies, and SGST benefits to eligible textile units.

However, the synthetic textiles sector has faced challenges with an inverted tax regime, where the input tax exceeds the output tax, resulting in no net SGST benefits.

New Policy To Benefit The Textile Sector 

Recognising the importance of strengthening the textile value chain, the State Government is set to introduce the 'Gujarat Textile Policy-2024'. This policy will take effect from the date of issuance of the Government Resolution and will remain in force for five years, providing various incentives and support to textile units in the state.

Eligible activities under the new policy include ginning and pressing, spinning, weaving (with or without preparatory), dyeing and processing, knitting, machine carpeting, machine embroidery, made-ups (excluding garments), technical textiles, and other processes like crimping, texturising, twisting, winding, and sizing within the textile value chain.

The policy offers various incentives such as interest subsidies, power tariff subsidies, and capital subsidies to eligible textile units (See Graphic below).

The amount of assistance varies based on the type of enterprise (MSME or large), the activity undertaken, and the size of the investment made.

Besides, the policy provides support for energy conservation, water conservation, and environmental compliance to existing units that have been operational for more than three years. It also promotes technology acquisition and upgradation, green practices through zero liquid discharge (ZLD), and the establishment of textile parks.

The implementation and monitoring of the schemes will be overseen by the Industries Commissioner, who will issue necessary guidelines. The expenditure will be met from the sanctioned grant of the respective financial year.

Overall, the Gujarat Textile Policy-2024 aims to strengthen the textile value chain, promote investment, and support the growth of the textile industry in the state. With its comprehensive incentives and support measures, the policy is expected to further boost Gujarat's position as a leading textile hub in the country.