Government Money for Garment and Textile Units in 2026: Centre + 5 States (₹, Checked Oct 2026)
As of 20 October 2026, a mid-size garment unit's real money comes from state textile policies, not the Centre. Maharashtra's 2023–28 policy offers MSME garment units 30–45% of fixed capital by zone; Uttar Pradesh offers 25% of plant and machinery. Centrally, ATUFS pays only old claims (validity ended 31 March 2022) and PLI applications closed on 31 March 2026.
Last checked: 20 Oct 2026
By the Mama Editorial Team. Rates come from the linked notifications, state Government Resolutions (GRs) and PIB releases; the ₹ example is our arithmetic.
Verified against
- PM MITRA 1st Revised Guidelines, Ministry of Textiles, 28 Aug 2025, para 3.5 (archived copy)
- PLI for Textiles amendment notification, 9 Oct 2025, paras 3.1–4.1, plus the PIB releases of 2 Jan 2026 and 10 Feb 2026 on the same page.
- PIB, Ministry of Textiles: RoSCTL to 30 Sep 2026 (1 Apr 2026), RoSCTL to 31 Dec 2026 (30 Sep 2026), ATUFS status (6 Feb 2026), Samarth (27 Mar 2026), PM MITRA sites (11 Aug 2026), Budget consultations (13 Mar 2026)
- Union Budget 2026-27 speech, paras 22–23 and 149. Notes on Demands for Grants 2026-27, No. 98 Ministry of Textiles
- Tamil Nadu New Integrated Textile Policy 2025-26 and TN MSME Policy 2021 guidelines, G.O.(Ms) No.37
- UP Textile and Garmenting Policy 2022 (English translation, notified 17 Oct 2022)
- Maharashtra Integrated and Sustainable Textile Policy 2023-28, GR No. धोरण-2023/प्र.क्र.81/टेक्स-5, 2 Jun 2023, with the corrigendum of 7 Aug 2026
- GIDC, Gujarat Textile Policy 2024 incentives page
- Checked 20 Oct 2026
Central measures: open, closed, announced
| Measure | What it pays (₹) | Status on 20 Oct 2026 | Source |
|---|---|---|---|
| ATUFS (machinery capital subsidy) | Credit-linked capital subsidy on benchmarked machinery | Valid to 31.03.2022; committed liabilities only. Budget 2026-27 provides ₹0.03 crore, down from ₹449.99 crore in the 2025-26 revised estimate | PIB 6 Feb 2026; Demand No. 98 |
| TEEM (Textile Expansion and Employment Scheme) | Budget speech: "capital support for machinery, technology upgradation" in traditional clusters | Announced 1 Feb 2026 in the Integrated Textile Programme (₹1,500 crore BE 2026-27). No guidelines release on the Ministry's PIB list, Feb–Oct 2026 | Budget para 22; PIB 13 Mar 2026 |
| PLI for Textiles (MMF apparel, MMF fabric, technical textiles) | Turnover-linked incentive; minimum investment ₹150 crore (Part I) or ₹50 crore (Part II) | Entry allowed until FY 2025-26; application deadline 31.03.2026, with no reopening notice on the portal (checked 20 Oct 2026); incentives run to FY 2028-29 | Notification 9 Oct 2025; PIB 2 Jan 2026 |
| PM MITRA Competitive Incentive Support | Up to 3% of a park unit's sales turnover. Caps: ₹10 cr/yr (₹30 cr total) for a ₹300 cr+ anchor; ₹5 cr/yr (₹15 cr) for a ₹100 cr investor; ₹1 cr/yr (₹3 cr) for other units with 100+ employees | Open inside the 7 parks; first come, first served; not for PLI beneficiaries. Scheme period to 2027-28 | Guidelines para 3.5 |
| RoSCTL (rebate of embedded taxes on apparel and made-up exports) | Rebate of embedded State and Central taxes not refunded elsewhere, at existing rates | Extended 1 Oct–31 Dec 2026 at existing rates | PIB 30 Sep 2026 |
| Samarth (skilling) | Training cost paid to empanelled partners; 70% placement required | Printed validity 31.03.2026; PIB of 28 Jul 2026 reports trainees as on 22.07.2026; Samarth 2.0 announced in Budget 2026-27 | PIB 27 Mar 2026; PIB 28 Jul 2026 |
The seven PM MITRA parks are at Virudhunagar, Warangal, Navsari, Kalaburagi, Dhar, Lucknow and Amravati (PIB, 11 Aug 2026).
For garment exporters, Budget 2026-27 (para 149) extends the time to export the final product made from duty-free inputs from 6 months to 1 year. The MSME-wide schemes (CGTMSE, ZED, Lean) are covered in what the ZED and Lean schemes pay.
State textile policies for a garment unit
| State | Policy, valid to | Capital subsidy for garments | Other money | Source |
|---|---|---|---|---|
| Maharashtra | Textile Policy 2023-28, to 31 Mar 2028 (+1 year if no new policy) | MSME: 45% / 40% / 35% / 30% of fixed capital investment in Zones 1–4. Large: 40% / 35% / 30% / 25% | Power subsidy per Annexure A. Total subsidy, excluding power, capped at 100% of FCI including central incentives (corrigendum 7 Aug 2026) | GR Table 13, p.26 |
| Uttar Pradesh | Textile & Garmenting Policy 2022, 5 years from 17 Oct 2022 | 25% of plant & machinery for units with 50+ jobs (15% below 50). +10% in Poorvanchal and Bundelkhand. Cap by unit level: ₹10 cr for ₹10–50 cr P&M with 200+ jobs | 60% of interest on TUFS-eligible machinery loans for 7 years, up to ₹1.5 cr/yr (₹75 lakh in Gautam Budh Nagar); electricity duty exempt for 10 years | Policy paras 3.1, 4.3, 4.5, 4.6 |
| Tamil Nadu | MSME Policy 2021 (readymade garments are a thrust sector); Textile Policy 2025-26 "until further notification" | MSME: 25% of P&M, up to ₹1.5 crore. The textile policy's apparel scheme needs ₹100 crore and 2,000 jobs in B/C districts | Training subsidy ₹4,000/6,000 per worker per month for 6 months (apparel scheme); 50% of a CAD/CAM cutting machine up to ₹50 lakh per CFC | G.O.37 para 8; Textile Policy pp.26, 42, 47–53 |
| Gujarat | Textile Policy 2024 | Garments and apparel (Activity-1), Category-1 talukas and PM MITRA: 35% of eligible FCI, up to ₹100 crore | 7% interest on term loans for 8 years (up to 3% of eFCI a year); payroll ₹5,000 per woman / ₹4,000 per man per month for 5 years; power ₹1/unit for 5 years | GIDC incentives page |
| Karnataka | Textile & Garment Policy 2019-24 named as the textile policy in Industrial Policy 2025-30 (p.18) | No rates: nothing newer than 2019-24 on the department's policies page (checked 20 Oct 2026); ask it whether a successor is notified | — | karnatakadht.org policies; Industrial Policy 2025-30 |
Maharashtra's zones (GR Annexure B): Zone 1 is Vidarbha, Zone 2 Marathwada plus Dhule and Jalgaon, Zone 3 Nandurbar, Nashik and Ahmednagar, Zone 4 Mumbai, Thane, Pune, Kolhapur, Solapur and Konkan.
The GIDC page gives Gujarat's rates only for Category-1 talukas and PM MITRA; its GR PDF did not open on 20 Oct 2026.
All the rows above, with clause references, are in the CSV.
Worked example: the same expansion in four states (₹)
Assume a 500-machine garment unit (an MSME on Udyam) adds a line: ₹12 crore of machinery plus ₹3 crore of building, so fixed capital is ₹15 crore. It adds 200 jobs and meets each policy's expansion test.
| State (location assumed) | Rule applied | Capital subsidy (₹ crore) |
|---|---|---|
| Maharashtra, Zone 4 (Kolhapur) | 30% × ₹15 cr FCI | 4.50 |
| Maharashtra, Zone 1 (Nagpur) | 45% × ₹15 cr FCI | 6.75 |
| Uttar Pradesh, Kanpur | 25% × ₹12 cr P&M (cap ₹10 cr) | 3.00 |
| Uttar Pradesh, Poorvanchal | 35% × ₹12 cr P&M | 4.20 |
| Tamil Nadu, Tiruppur (MSME thrust) | 25% × ₹12 cr P&M, capped | 1.50 |
| Gujarat, Category-1 taluka | 35% × ₹15 cr eFCI | 5.25 |
These are ceilings, not cash on day one: states pay in instalments (TN over three years, para 8.2) and the nodal agency decides eligibility. In UP the interest subsidy comes on top. Assume a ₹9 crore loan at 9.5%: first-year interest is about ₹85 lakh, of which 60% (about ₹51 lakh) is reimbursed, falling as the loan is repaid.
What trips up a garment unit's claim
- Expansion tests. UP counts an expansion only if the investment exceeds 25% of existing gross fixed capital and installed capacity rises at least 25% (para 3.6). Maharashtra (GR definition 8) also requires 10% more jobs.
- Whose jobs count. UP counts only workers domiciled in Uttar Pradesh, on payroll or contract (para 3.7). Your job count for the subsidy can be lower than your headcount.
- Size by Udyam, not headcount. TN's G.O.37 sizes enterprises by the 2020 Udyam notification, S.O. 2119(E) (ch.4).
- Stacking. Maharashtra and UP (para 3.8) both cap total incentives at 100% of fixed capital (UP: 80% in Gautam Budh Nagar). TN's ₹1.5 crore ceiling covers the original project and expansions together (para 8.3). PM MITRA's CIS is barred for PLI companies.
- Timing. UP's policy ends five years from 17 October 2022. Machinery bought after that date is outside the scheme unless a successor policy says otherwise.
What to ask before you order machines
Ask the District Industries Centre or state textile commissioner, in writing: which zone or taluka category your plot is in, which clause covers your activity, and the disbursal schedule.
A subsidy pays back only if the new line actually runs. Prove the capacity you already have before you file, and compare a new line against more output from the old ones. For the other cost levers, see where a textile unit can spend less. Mama reads a factory's existing cameras and tells the owner each morning how many machines ran and where idle hours went, the baseline a lender asks for when an expansion is appraised. Leave an email or phone in the form below.
Estimate, not legal or tax advice. Eligibility is decided by the nodal agency; check the clause linked in each line.
FAQ
Is the TUFS scheme still available in 2026? No. Per PIB of 6 February 2026, ATUFS was valid until 31.03.2022, and only committed liabilities are now paid. TEEM, announced in Budget 2026-27 for cluster machinery, had no guidelines on the Ministry's PIB list by 20 Oct 2026.
What subsidy does a garment unit get in Tamil Nadu? A garment MSME can claim the thrust-sector capital subsidy of 25% of plant and machinery, up to ₹1.5 crore, under G.O.(Ms) No.37 para 8.
Has RoSCTL been extended? Yes. The Ministry of Textiles extended it on 30 September 2026 for 1 October to 31 December 2026, at existing rates.