The Indian textile industry has been facing a long-drawn recession since April 2014. To enhance the industry’s competitiveness, the two per cent MEIS (Merchandise Exports from India Scheme) benefit has been extended for all textile products other than cotton yarn.

The TUF scheme has been extended for the entire 13th five-year plan period. A sum of Rs 17,822 crores has been allotted to meet the committed liabilities of the schemes in the pipeline as also the ongoing and new schemes.

Under the amended TUF scheme, the spinning sector has been excluded while a 15 per cent capital subsidy has been extended for garments and technical textiles and a 10 per cent subsidy for weaving and processing sectors. Interest subsidies ranging from two per cent to six per cent extended under the earlier scheme have been discontinued.

As TUF subsidy refunds have been pending for more than one and a half years, the working capital has been totally eroded and most spinning mills are incurring cash losses due to the glut in the market. The industry has been hit by the global economic slowdown. Major markets have imposed a higher tariff on Indian textile and clothing products than they have on imports from competing nations like Pakistan, Bangladesh, Vietnam, Turkey and Cambodia.