The technology upgradation fund (TUF) scheme for new investments in the textile sector of India expired on March 22 perhaps because the interest rates were low and the Indian government absorbing 5 percent bank markup made no sense.
But with markup increasing again the Indian textile sector is demanding the renewal of the TUF scheme that took the Indian textile industry to new heights because of the rapid upgrade of technology. The Indian industry has recently increased investments in the textile sector to cope with the current sustainability demands and moving into new textile sub-sectors like technical textiles and increasing the use of manmade fibers.
Industry players point out that without TUF the cost of textile projects would increase by 35 percent. The government has given indications of coming up with revised TUF-type schemes but no progress has been made in the last year. The government has introduced several other initiatives to boost textile investments in specific textile parks or estates.
Provincial governments in India also announced several schemes to attract textile investment. The state of Gujarat has emerged as the main textile hub in India because of its special scheme for textiles. That scheme also expired on October 22 and has not been revived. The industry leaders from Gujarat are also pleading with the state government to renew the scheme.
In Gujarat also the textile sector has invested over Rs500 crore recently and is looking towards both Union and state governments for support. The textile millers have also demanded the removal of import duty on cotton.
Indian textile sector demands revival of TUF
