Introduction
India’s textile industry is a cornerstone of the economy—supporting millions of jobs, contributing significantly to exports, and driving rural economic activity. Modernizing this sector is crucial for global competitiveness, which is precisely the mission of the Technology Upgradation Fund Scheme (TUFS), a flagship initiative by the Government of India.
What is TUFS?
Launched in April 1999, TUFS was designed to support textile and jute industry units in adopting modern, state-of-the-art machinery. It began with a 5% interest reimbursement and evolved over time. Today, it has matured into the Amended TUFS (ATUFS), operating from January 2016 to March 2022, shifting focus to direct capital subsidies to encourage tech upgrades, improve productivity, and boost exports.
Evolution at a Glance
- Original TUFS (1999–2007): 5% interest reimbursement
- Modified TUFS (2007–2010): Broader coverage
- Restructured TUFS (2010–2013): 6% interest reimbursement
- Restructured & Revised TUFS (2013–2016): Capital subsidy introduced
- Amended TUFS (2016–2022): Focused on capital investment subsidies
Financial Support Under ATUFS
| Sector | Subsidy Rate | Cap per Unit |
|---|---|---|
| Garmenting & Technical Textiles | 15% of investment | ₹30 crore |
| Weaving (shuttle-less), Processing, Jute, Handloom, Silk | 10% | ₹20 crore |
| Composite units with >50% in garmenting/technical textiles | 15% | ₹30 crore |
| Composite units with <50% | 10% | ₹20 crore |
Additional incentives include 10% bonus subsidies for garmenting and made-ups that meet production and employment targets after 3 years under the SPELSGU initiative.
Who Can Avail the Scheme?
Eligible categories include:
- Spinning, weaving (including shuttle-less), knitting
- Fabric processing, embroidery
- Garmenting, made-ups manufacturing
- Technical textiles, handloom, silk, and jute sectors
To participate, businesses must purchase benchmarked new machinery supported by term loans from authorized banks or NBFCs.
Step-by-Step Application Process
- Obtain UIN: Generate from the i-TUFS portal managed by the Textile Commissioner.
- Secure Machinery Loan: Approach accredited banks or NBFCs.
- Complete TUFS Application: Submit UIN, loan sanctions, machinery list, and investment details.
- Verification: Ministry, Textile Commissioner’s office, and lender validate the application.
- Subsidy Disbursed: Subsidy amount is adjusted against your machinery loan.
Real-World Impact
A recent NITI Aayog–commissioned impact assessment revealed:
- TUFS-funded investments made up around 80% of total textile investments between 1999–2016.
- 82% of stakeholders reported enhanced investment inflows.
- Significant gains in productivity, cost-efficiency, sales, and exports.
- India now leads globally in spinning equipment due in large part to TUFS, while weaving and processing sectors have also shown growth.
However, smaller and unorganized units—particularly in weaving and processing—still need greater support and targeted assistance.
Key Highlights of TUFS
- What’s in it for them? 10–15% subsidy on capital costs, making modern equipment more affordable.
- Why now? The scheme’s incentives remain relevant, especially for high-potential categories like technical textiles.
- How to access benefits? Via the i-TUFS portal and accredited lenders.
- What are the risks? Machinery eligibility, loan structuring, and administrative compliance need diligence.
- What next? Post-2022, continued modernization support will be vital—blog readers should stay updated for scheme extensions or successors.
Final Thoughts
TUFS has transformed the landscape of the Indian textile industry by making modern technology accessible and affordable. For businesses on bizconsulting.io, it’s a powerful tool to drive productivity, quality, and exports. Highlighting it through blog content can guide your readers to make informed investment decisions—and boost their competitive edge.
