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Tamilnadu New Integrated Textile Policy 2019


Tamilnadu New Integrated Textile Policy 2019

The Tamilnadu State Government has introduced the New Integrated Textile Policy 2019. The policy aims at maintaining the growth of the textile value chain and to promote the technical textiles. The policy provides support to the southern districts to develop the textile industry. Higher Incentives or subsidies are provided to different sectors in the Textile Industry through this policy.


  • Maintain the growth and position of the textile industry.
  • Encourage the production and productivity of cotton in the state.
  • Achieve growth in the textiles by shifting from the fibre to fashion.
  • Build world-class technology in association with social and environmental standards.
  • Create the best sectors in various fields of the textile industry, to produce high-quality products meeting with the requirements of the export and domestic sector.
  • Encourage industries to focus on diversification, innovation and value addition.
  • Increase the shares of the textiles export.
  • Promote and support the technical textile in the areas of technology, production and research and development.
  • Create employment opportunities.

Area of Focus

The policy focuses on the following areas:

  • Sustain and preserve the traditional handloom sector and also the artistry of the weavers.
  • Develop an environment-friendly processing sector and capacity building.
  • Develop the knitting and garment sectors.
  • Promote technical textiles.
  • Develop the textile industries harmoniously and holistically.

Incentives for various Sectors

Spinning Sector

To the extent of 2% interest subvention would be given to the spinning mills, invested on the technology modernisation and upgradation. The interest would be granted on the machinery that a minimum of 15 years from the date of installation.

Handloom Sector

The following facilities are offered by the Tamilnadu Government to the handloom sector:

  • Supply of electricity at the rate of 200 unit per month would be provided to the households of the handloom weavers.
  • To encourage weavers, the state government contributes 8 paise per rupee for the wage they have earned.
  • The family of the co-operative handloom weaver, who was deceased before 60 years of age would receive a pension of Rs.1000 per month
  • The weavers after attaining 60 years of age would receive an old-age pension of Rs.1000 per month
  • An amount of Rs.40 crore would be granted to the sector for the handloom Support Programme.
  • Life Insurance Scheme would be provided to the ancillary workers and weavers.
  • Providing loan or credit assistance to the weavers.
  • Providing infrastructural facility to the handloom clusters under the National Handloom Development Programme.
  • The weavers would be provided with the Hank Yarn Price subsidy, Transport Subsidy and Depot Subsidy while purchasing the silk yarn and hank yarn.
  • Steps will be taken to register the handloom varieties and traditional products to protect the weaving craftsmanship and the heritage of weaving sector.
  • For the products of the handloom, an exclusive identity will be given like Handloom Mark, India Handloom Brand and Silk Mark. This is to separate from the fake handloom products.
  • The interest subsidy will be increased from 4% to 6% for the Primary Handloom Weavers Co-operative Societies.
  • The Rebate Subsidy Scheme will be increased from Rs.60 crore to the amount of Rs.150 crore per year. This is to develop the sales of the handloom cloth.
  • Credit support will be given to the weavers for Marketing and Production. The support will be provided from the Government of India Schemes and NABARD.

Power loom Sector

The following facilities are provided for the Power loom Sector from the Tamilnadu Government:

  • Supply of electricity at the rate of 750 units per month will be provided to 1.06 lakh power loom units.
  • The power loom sector will be provided with a concession in the electricity tariff.
  • To an extent, 10% credit linked capital investment subsidy (CIS) will be provided for the investment of new shuttle-less loom under the Amended Technology Upgradation Fund Scheme (ATUFS).
  • Subsidy of 60% to the maximum of Rs.50 crore will be provided for the development of infrastructure under the Modified Comprehensive Power loom Cluster Development Scheme (MCPCDS). This is to increase the export and production of the sector.
  • An insurance amount of Rs.1 lakh to Rs.4 lakhs will be provided to workers in case of natural or accidental death or permanent or partial disability due to an accident.
  • To provide skills for the workers, 75% or a maximum of Rs.10,000 per person will be given.
  • Several financial support will be provided for the workers, like life insurance cover, educational assistance, marriage assistance, maternity assistance, the benefit of pension and assistance for the purchase of spectacle.
  • To the extent of 10% additional capital subsidy is provided for purchasing new shuttleless looms. A maximum of Rs.4 lakh per loom.
  • Capital subsidy of 10% will be given for new preparatory machines.
  • An additional capital subsidy of 10%, a maximum of Rs.30 lakh per unit will be provided for 2 units of warping machines and 1 unit of sizing machine.
  • To upgrade the plain looms, a capital subsidy of 50% will be sanctioned.
  • To set up a trade facilitation centre, 25% of the cost that is a maximum of Rs.10 crores will be provided.
  • To set up the infrastructure for production and export, 9% of the project cost will be provided. The maximum amount allocated is Rs.9 crore.

The following are the components that were introduced to develop the power loom sector through comprehensive schemes.

S.No Schemes Incentives Offered People subject to the incentives
1 In-situ Upgradation of Plain Power looms.

Rs.20,000 to Rs.81,000


Economically weak power loom units



Group Workshed Scheme (GWS)


Rs.400 to Rs.900 per square feet

Shuttleless looms



Yarn Bank Scheme


Corpus fund up to Rs.200 lakh per yarn bank, free of interest Special Purpose Vehicle (SPV) or Consortium

Common Facility Centre (CFC)


Subsidy up to Rs.200 lakh


For design, training, information cum trade centres

Pradhan Mantri Credit Scheme


Margin Money Subsidy of 20%, maximum of Rs.1 lakh. Interest Subvention of 6% per year for the working capital loan. Term loan for a maximum period of 5 years

Power loom units or weavers


6 Solar Energy Scheme for Power looms. Capital subsidy of Rs.2.23 lakh to Rs.8.55 lakh Small Power loom units, which has up to 8 looms

Tex-Venture Capital Fund


50% of project cost, maximum of Rs.3 crore


Private Power loom MSME companies


Processing Sector

  • A capital investment of 10% is provided.
  • To set up processing parks, 50% of the project cost, a maximum of Rs.75 crore will be provided by Central Government. In addition to this the State Government will provide 25% of the project cost, a maximum of Rs.37.50 crore.
  • An interest subvention of 5% will be provided to those who have availed 25% contribution of SPV.
  • A capital subsidy of 10%, a maximum of Rs.10 lakh will be provided for buying of the Wider Width Fabric Printing Machine.
  • 15% capital subsidy, with a maximum of Rs.5 crore for promoting Effluent Treatment Plants or Hazardous Waste Treatment Storage and Disposable Facility (HWTSDF) will be given.

Apparel, Knitting and Garment Sector

  • A credit-linked CIS of 15% is given for the investments in the Garmenting sector. An additional CIS of 10% is given to support machinery.
  • To set up Training centres, a subsidy of 25% with a maximum of Rs.20 lakh per centre will be given.

Technical Textiles

  • For investments on machinery, a credit-linked CIS of 15% will be provided.
  • To set up technical parks, 9% of project cost, a maximum of Rs.9 crore will be sanctioned.
  • The Technical Textile projects will be provided with an additional interest subsidy of 6% and also a 100% Stamp Duty Exemption.

Textile Parks

  • To set up Textile parks like Scheme for Integrated Textile Parks (SITP), the subsidy of 40% of the project cost up to Rs.40 crore will be permitted from the Central Government. In addition to that a 9% of State subsidy, a maximum amount of Rs.9 crore.
  • To increase employment, an amount of Rs.10 crore per park will be sanctioned.
  • For mini Textile parks of minimum 2 acres land and 3 units, a subsidy of 50%, maximum of Rs.2.50 crore will be provided.
  • 50% exemption for stamp duty will be given to the land allotted for setting the parks.

Employment-Based Incentives

A soft loan is provided to projects against the Net output VAT remitted, for the first 5 years of the production. The soft loan has an interest of 0.1% per annum, and it can be repaid after 7 years. A special capital subsidy of 15%, up to Rs.30 lakh will be provided to the Ready-made Garment sector for machinery.

Special Package for Southern Districts

Special package is announced for the below listed Southern Districts or Backward Districts of Tamilnadu to achieve balanced regional development in the state: Kanyakumari, Tirunelveli, Thoothukudi, Virudhunagar, Ramanathapuram, Sivagangai, Madurai, Theni, Dindigul, Pudukottai, Ariyalur and Perambalur Districts.

The special incentives for the Southern Districts are:

  • 5% Additional Capital Subsidy for new/expansion of textile units
  • 100% Stamp Duty Exemption for projects (minimum investment on machinery should be of Rs.5 crore)
  • SIPCOT will allocate land even if the land is not available within SIPCOT parks under the new environment policy. The minimum land of 25 acres should be occupied by the project and the investment should be more than Rs.50 Crores
  • Power supply will be given to the projects by MoU with Government of Tamilnadu

Other Benefits

  • Single Window Clearance – Single procedures for all the approvals ranging from land, electricity, machinery, license, etc.
  • State Textile Advisory Committee – Will provide industry inputs for the benefit of the industry
  • Supporting Infrastructure – Support on Energy, Water, Environmental compliances and assistance on technology upgradation and innovations
  • Labour Sector Initiatives – Assistance to Labour quarters, workers’ hostel, ESI, etc.
  • Goods and Services Tax (GST) – Assistance to compliance and best rates on GST
  • Exports – Support for forming a cluster, funding for exports, etc.
  • Foreign Direct Investments (FDI) – FDI cell to attract investors, No restriction on FDI limits


For more details, please contact:

  • Handlooms, Handicrafts, Textiles & Khadi Department,
  • Government of Tamilnadu
  • Secretariat, Fort St. George,
  • Chennai – 600 009.
  • Tel.: +91 44 25671623
  • Fax:+91 44 25672261
  • E-mail: [email protected]

The official policy can be accessed from: