In the industry, processing remains the weak link in the production chain and industry players feel that the industry needs more time to gear up to meet the need of the post-quota setting. The extension of the scheme would benefit a lot of such textile processing units that have not avail the savor if it. Also, TUF would greatly help the textile industry to face global competition.

The latest data available with the Textile Commissioner, textile units have picked up nearly Rs 12,758 crore over the last three years under the government of Indias Technology Upgradation Fund Scheme (TUF) which would see an addition of six million spindles and 30,000 shuttle looms this year.

The Textile Minister, Shankersinh Vaghela is of the view that the domestic and apparel industry would be the next Indian software industry, offering international quality products and services. The ministry of textile is also hopeful that the extended scheme will assist some more quality standards on the international platform. The industry people has welcomed the extension and it is assumed that Indian apparel exports are slated to grow at 15-18% annually and win 5% of the global apparel export market till 2010.

Definition of Technology Upgradation

Technology upgradation would ordinarily mean induction of state-of-the-art or near-state-of-the-art technology. But in the widely varying mosaic of technology in the Indian textile industry, even a significant step up from the present technology level to a substantially higher one for such trailing segments would be essential. Accordingly, technology levels are benchmarked in terms of specified machinery for each sector of the textile industry. Machinery with technology levels lower than that specified will not be permitted for funding under the TUF Scheme.

Benefits under the scheme:

• 5% reimbursement of the normal interest charged by the lending agency on rupee term loan (RTL); or
• Coverage of 5% exchange fluctuation (interest & repayment) from the base rate on foreign currency loan (FCL); or
• 15% credit linked capital subsidy for the SSI textile and jute sector; or
• 20% credit linked capital subsidy for the power loom sector; or
• 5% interest reimbursement, plus 10% capital subsidy, for specified processing machinery.
• 25% capital subsidy on purchase of the new machinery and equipment for pre-loom & post-loom operations, handlooms/up-gradation of handlooms and testing &quality control equipments, for handloom production units.

Eligibility criteria:

Technology levels are benchmarked in terms of specified machinery. There is no cap on funding under the scheme.

The following are covered under the scheme:

a) Cotton ginning & pressing.

b) Textile industry covering:-

•     Spinning;

•     Silk reeling & twisting;

•     Wool scouring & combing;

•     Synthetic filament yarn texturising,

•     crimping and twisting;

•     Viscose filament yarn (VFY);

•     Weaving/knitting including non-wovens,

•     fabric embroidery and technical textiles;

•     Garments, made-up manufacturing;

•     Processing of fibers, yarns, fabrics,

•     garments, and made-ups;