News & Insights | Textile Industry

Tamil Nadu Budget Boosts Textile Industry with New Parks and Subsidies

Published: February 21, 2024

In a move to bolster the textile industry in Tamil Nadu, Finance Minister Thangam Thennarasu unveiled a series of key initiatives in the state budget presentation on Monday. The highlights include the development of PM MITRA Park in Virudhunagar and a textile park in Salem, along with increased capital subsidy for investments in technical textiles and support for technology upgradation in spinning mills.

The budget outlines plans to establish 10 mini-textile parks in Erode, Karur, and Virudhunagar at ₹20 crore, a research and business development centre for technical textiles at ₹25 crore, and a 25% capital subsidy for investments in technical textiles. Additionally, a 6% interest subvention will be provided for technology upgradation in spinning mills.

A major announcement in the budget is the proposal to set up an integrated complex in Chennai, spanning 4 lakh sq. ft., for showcasing handlooms and handicrafts from Tamil Nadu and other states, at an estimated cost of ₹227 crore.

Industry associations have lauded the budget for addressing the pressing needs of the sector. The Southern India Mills’ Association praised the government’s decision to increase interest subsidy for spinning modernisation from 2% to 6%, which will help boost modernisation efforts and reduce capital costs for spinning mills.

The Tiruppur Exporters Association commended the focus on creating industrial estates with plug-and-play facilities and incentivizing women’s employment to benefit the garment industry.

However, calls have been made for additional support and concessions for investments in non-conventional energy by small and medium-scale enterprises and textile dyeing units. President of the Recycle Textile Federation, M. Jayabal, emphasised the need for subsidised power rates to aid existing industries in the state.

Overall, the Tamil Nadu budget is geared towards revitalising the textile sector and empowering it for sustainable growth in the coming years.

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