Gujarat Textile Policy: Interest Subsidy

Description
The "Gujarat Textile Policy" is an umbrella scheme introduced by the Industries and Mines Department, Gujarat. It aimed at augmenting investments in the textile sector and strengthening the textile value chain across each sub-sector, while also focusing on strengthening the garments and apparel as well as technical textiles industry. Effective from October 1st, 2024 to September 29th, 2029, this initiative focuses on reducing the carbon footprint and promoting green growth, thereby making the sector globally competitive and environmentally sustainable. The component "Interest Subsidy" provides financial assistance in the form of a credit-linked interest subsidy for eligible industrial activities. This subsidy helps reduce the financial burden on industrial units by reimbursing a portion of the interest paid on term loans for Gross Fixed Capital Investment.

Exclusions
• <br>

Definitions
Gross Fixed Capital Investment
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Eligible Fixed Capital Investment
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Ineligible Capital Expenditure/Assets
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Term Loan
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Date of Commercial Production (DoCP)
(Source: https://ic.gujarat.gov.in/documents/pagecontent/Gujarat%20Textile%20Policy_2024.pdf)

Benefits
• Financial Assistance:

Eligibility Criteria
1. Industrial units must have taken a sanctioned term loan for Gross Fixed Capital Investment.
2. The loan disbursement date must be on or after 01/01/2024 for units under implementation as of 01/10/2024.
3. The unit must apply within one year from the Date of Commercial Production (DoCP).
4. The unit must be in regular repayment of installments and interest.
5. The unit must bear at least 2% interest on the term loan.
6. &amp;gt; **Eligible Activities:**
7. **Activity 1:**
8. - Garments, Apparel &amp;amp;amp; Made-ups, Technical Textiles Activity (including Composite Unit)
9. **Activity 2:**
10. - Weaving (with or without preparatory), Knitting, Dyeing &amp;amp;amp; Processing, Texturising, Twisting, Embroidery and MMF Spinning to manufacture yarn from Polyester Staple Fiber (PSF) / Viscose Staple Fiber (VSF) (excluding Spinning activity of Cotton and Synthetic Filament Yarn).

Required Documents
• Document of registration of the industrial undertaking, as applicable under law, and the Industrial Entrepreneur Memorandum, as prescribed by the Government of India.
• Documents related to legal possession of land with valid nonagriculture permission for industrial use, and registered purchase / Lease / Rent deed. If the plot or shed is in GIDC estate, a copy of the possession letter should be attached.
• Consent to Establish from GPCB, if applicable.
• Detailed Project Report containing the following:
• Term loan sanction letter from financial institution(s)
• Board Resolution / Authority Letter / PoA
• PAN Card of Enterprise and Authorized Person
• GST Registration with all Annexures
• First Sale Bill ( In case of Commercial Production is commenced)
• Audit Report (Before initiation of Expansion)

Frequently Asked Questions
Q: What is the "Gujarat Textile Policy"?
A: The "Gujarat Textile Policy" is a government initiative aimed at strengthening the textile sector by promoting investment, sustainability, employment generation, and value chain integration.

Q: What is the operative period of the "Gujarat Textile Policy"?
A: The operative period of the Gujarat Textile Policy 2024 is from October 1, 2024, to September 30, 2029, covering a span of five years.

Q: How does the policy contribute to employment generation?
A: The policy focuses on creating a robust textile ecosystem by attracting investments, encouraging MSMEs, supporting women entrepreneurs, and expanding production capacities, thereby generating employment opportunities.

Q: What incentives are provided under the policy?
A: The policy offers financial assistance, infrastructure support, and subsidies to strengthen textile manufacturing, encourage investment, and support MSMEs, startups, and large enterprises.

Q: What is the objective of the "Interest Subsidy" component?
A: The component "Interest Subsidy" is a financial assistance program that provides credit-linked interest subsidies to eligible industrial units to reduce their loan repayment burden.

Q: Who is eligible to apply for this subsidy?
A: Any industrial unit that has taken a sanctioned term loan for Gross Fixed Capital Investment and meets the eligibility criteria specified in the scheme guidelines is eligible to apply.

Q: How much subsidy is provided under this scheme?
A: The subsidy amount varies based on the category and location of the industrial activity, ranging from 5% to 7% of the interest on the term loan.

Q: For how many years can an industrial unit avail of the subsidy?
A: An industrial unit can avail of the interest subsidy for a period ranging from 5 to 8 years, depending on its category and location.

Q: When should an industrial unit apply for the Interest Subsidy?
A: The industrial unit must apply within one year from the Date of Commercial Production (DoCP). after obtaining the Eligibility Certificate.

Q: What happens if an industrial unit defaults on loan repayment?
A: If an industrial unit defaults on loan repayment, it will not be eligible to receive the subsidy for the default period, and that period will be deducted from the total eligible subsidy duration.

Q: Does the Interest Subsidy cover penal interest or additional bank charges?
A: No, the subsidy is provided only on regular interest payments and installments paid to the financial institution. Penal interest and additional charges are not covered.

Q: Can an industrial unit avail of interest subsidies from both the State and Central Government?
A: Yes, an industrial unit can avail of subsidies from both governments; however, the total subsidy amount will be adjusted to ensure that the unit bears at least 2% interest on the term loan.

Q: Is proof of loan repayment required for claiming the subsidy?
A: Yes, the industrial unit must submit proof of regular installment and interest payments to the financial institution in order to claim the subsidy.

Q: If an industrial unit has multiple term loans, which disbursement date will be considered for eligibility?
A: If multiple term loans are availed from different financial institutions, the first disbursement date from any one financial institution will be considered for determining the subsidy eligibility.