Comprehensive Guide: MP Scheme for Textile Industry
- Sericulture and Silk Production: This includes all activities related to sericulture, including chaaki and koya production, and the reeling process.
- Jute Product Manufacturing: All activities involved in the production of jute-based products.
- Non-Woven Fabric Manufacturing: All activities related to the production of non-woven fabrics.
- Textile Manufacturing Processes: Spinning, weaving, knitting, and associated activities.
- Pre-Spinning Processes: Processes related to the preparation of all kinds of textile fibers, such as ginning and pressing, as well as the production of synthetic fibers including polyester, viscose, nylon, acrylic staple fiber, filament yarn, and recycled polyester staple fiber.
- Post-Spinning and Pre-Weaving Processes: Activities including winding, drawing, twisting, doubling, reeling, texturizing, crimping, and entanglement, as well as all pre-weaving processes such as warping and sizing.
- Textile Processing and Finishing: Dyeing, processing, printing, and embroidery, including the production of embroidered fabrics.
- Production of Mats: The production of Polypropylene Mats exclusively on power looms.
- Technical Textiles: Such textile production which is aimed not only at fabric production but also at creating products which could be used in the industrial, defence, research and other advanced sectors due to its specialized technical properties. These products are classified into following categories based on their quality and end use:
(1) Agro tech, (2) Build tech, (3) Cloth tech, (4) Geo tech (5) Home tech, (6) Ind tech, (7) Medi tech, (8) Mobile tech, (9) Echo tech, (10) Pack tech, (11) Pro tech (Protective textile) (12) Sport tech, (13) Defence tech, (14) Products announced by Textiles Ministry of Central Government from time to time
Incentives For MSME Sector
Textile units, having investments of more than ₹10 crores up to the maximum limit of medium enterprises in plant and machinery, will be eligible for the following assistance:
(i) Interest subsidy for new units and units planning for expansion/diversification –
Interest subsidy on the term loan taken for plant and certain machinery will be provided from the date of commencement of commercial production, as follows:
# | Unit Type | Interest Subsidy |
1 | For New Units with an investment up to ₹25 crores in fixed capital investment | @2% for 5 years, subject to a limit of ₹5 crores |
2 | New standalone units with an investment of more than ₹25 crores in fixed capital investment OR Expansion/Diversification of an existing standalone unit amounting to at least 30% of the existing fixed capital investment (not less than ₹25 crore) or ₹50 crore, whichever is less, provided that the unit remains in the eligible MSME category after such investment. | @5% for 5 years |
3 | New composite unit* with an investment of more than ₹25 crores in fixed capital investment OR Diversification of an Existing Standalone unit into a composite unit | @7% for 5 years |
Classification as a Composite Unit:
To qualify as a composite unit, irrespective of its location(s) within Madhya Pradesh (either at a single site or multiple sites), the entity must undertake at least one of the following activities and ensure that at least 75% of the primary product (e.g., yarn) is used as input for downstream activities:
- Manufacturing fabric using yarn and processing activities (weaving/knitting and processing).
- Processing fabric and manufacturing garments (processing and ready-made garments).
- Yarn manufacturing: garment manufacturing using yarn, or processing and garment manufacturing using fabric (spinning-weaving/knitting-processing-garmenting).
- Made-up articles.
Fiscal Incentives
Infrastructure Development Assistance 50% assistance for developing power, water, gas pipeline, road, drainage and sewage infrastructure upto the factory gate subject to a maximum of ₹5 Crore if the investor acquires private land or gets undeveloped Government land for setting up of the unit.
Green Industrialization Assistance Capital subsidy of 50%, max upto ₹5 Crore for setting up of waste management systems (such as Effluent Treatment Plant, Sewage Treatment Plant, pollution control devices etc.) and maximum of ₹10 Crore for setting up Effluent Treatment Plant with Zero Liquid Discharge. Sanctioning in 2 equal annual instalments
Assistance for IPR and Organic Certification
- IPR Assistance: 100% reimbursement of expenses incurred for filing patents, copyrights, trademarks, and geographical indications (GI), subject to a maximum of ₹10 Lakh per unit.
- Organic Certification Assistance: 100% reimbursement of expenses incurred for obtaining organic certifications from APEDA-accredited agencies, subject to a maximum of ₹5 Lakh per unit.
Incentive to Provide Employment to Differently Abled Persons
Units providing employment to Persons with Disabilities (minimum 5% of total workforce) will be eligible for following incentives: 1. 100% reimbursement of skill development expenses upto ₹5,000/- per employee for 3 months from date of joining. 2. Employees PF/ESI assistance: Reimbursement of employee’s contribution- maximum ₹6,000/per month for 5 years. 3. Medical insurance premium reimbursement for 5 years
Interest Subsidy 5% interest subsidy on term loan taken for Plant & Machinery for 5 years, maximum upto ₹50 Crore, from date of commercial production
Incentive for establishing Apparel Training Institute Units shall be given 25% subsidy for establishment of Apparel Training Institute up to a maximum limit of ₹50 lakh
Basic Investment Promotion Assistance
Basic Investment Promotion Assistance for large units shall vary between 40% to 10% based on the below formula:
BIPA=IF(EFCI>2000, 200,IF(EFCI<=50, 0.4*EFCI,MIN(15 + 0.08*(EFCI-50) + (EFCI/12) * ((1/ (1+EXP(-5.9*(1 – EFCI/2490))))(1 – EFCI/2490)) + 9.3(1 – EFCI/2500),0.4*EFCI,200)))
Sample Values of BIPA are as follows:
Investment (in ₹ Crore) | Percentage | Amount (in ₹ Crore) |
50-85 | 40% | 20-33.6 |
100 | 36% | 35.9 |
125 | 32% | 39.7 |
150 | 29% | 43.4 |
175 | 27% | 47.2 |
200 | 25% | 50.8 |
225 | 24% | 54.4 |
250 | 23% | 58 |
300 | 22% | 65.1 |
350 | 21% | 71.9 |
400 | 20% | 78.6 |
500 | 18% | 91.4 |
600 | 17% | 103.6 |
700 | 16% | 115 |
1500 | 12% | 180.1 |
2000 | 10% | 200 |
Export Multiple
The Export Multiple shall vary from 1.0 to 1.3 for exports ranging from 25% to 75% of the total production.
ExportMultiple(EM)=IF(ExportPercentage<25%,1,IF(ExportPercentage)
Export % | Multiple |
25 | 1.00 |
30 | 1.03 |
35 | 1.06 |
40 | 1.09 |
45 | 1.12 |
50 | 1.15 |
55 | 1.18 |
60 | 1.21 |
65 | 1.24 |
70 | 1.27 |
75 | 1.30 |
FDI Multiple
The FDI Multiple will be applied to BIPA based on the percentage of FDI equity in the unit. For FDI equity between 26% and 50%, the multiple will range from 1.1 to 1.2, while units with more than 50% FDI equity will receive a fixed multiple of 1.2.
FDI Multiple =IF(FDI<=51, 1.1 + (FDI-26)*(0.1/(51-26)), 1.2))
FDI Equity % | Multiple |
20 | 1.000 |
25 | 1.000 |
30 | 1.116 |
35 | 1.136 |
40 | 1.156 |
45 | 1.176 |
50 | 1.196 |
51 | 1.200 |
