India: CMAI Welcomes Amended TUFS

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The Clothing Manufacturers Association of India (CMAI) has welcomed the Amended Technology Upgradation Fund Scheme (ATUFS) that has been cleared by the Cabinet Committee on Economic Affairs on December 30, 2015.

Rahul Mehta, President CMAI stated that the launching of the new scheme in place of the present Revised Restructured TUFS (RR-TUFS) is a relief to the entire textile sector, especially because the RR-TUFS was in a limbo and no Unique ID, which is the formal sanction under the scheme, has been issued after September 2014. Allocating nearly Rs.13,000 crore for clearing the committed liabilities will help in clearing the backlog pending for issuance of UIDs and also the large number of so called 'left out cases' that have been pending for a decision for nearly four years. Allocation of over Rs 5,000 crore for new projects will encourage fresh investments, both for modernising as well as scaling up existing production facilities and for green field investments.

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Mehta thanked the government for the added focus provided to the highly labour intensive apparel segment and the highly potential technical textiles sector by stipulating a higher capital assistance of 15% for them as against 10% available to the other segments. He pointed out that the apparel industry was not very capital intensive, but given the sub-scale operation of production facilities in this segment in the country and the need to achieve economies of scale for competing with large units in countries like China, Bangladesh and Vietnam, the higher assistance to the apparel segment will prove to be highly beneficial in pushing up both employment and exports in the textile sector. 

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He pointed out that the uncertainties and delays in implementation of TUFS had dampened the enthusiasm of investors in the sector for the last 3-4 years. Though the level of assistance has been scaled down in the Amended TUFS compared to the earlier schemes, it would remove uncertainties and the industry will be in a position to take informed decisions on expansion and modernisation. 

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