Scheme for Production and

Employment Linked Support for

Garmenting Units (SPELSGU) under
ATUFS Dt. 25 Jul 2016

Presented by:
Alisha Dsouza
Ketaki Vaidya
Priyanka Shende
Mohnish Firke
Rucha Shirudkar
Sakshi Aher
 AGENDA
1. Technology Upgradation Fund Scheme (TUFS)
2. Amended -TUFS
3. Objectives of ATUFS
4. Indian Textile Industry
5. Global Import and Export of Textiles and RMG clothing
6. SPELSGU compliance with WTO Rules
7. Anti-Subsidy duties on Indian garments in Markets like EU
8. Impact of negotiations of FTA with EU
9. Competitive advantage of other countries as compared to
India
10. Joint Ventures in LDCs
11. Government Initiatives

6/29/2017 IGTC PGPBA 2016-2018 2

 Background of TUFS
TUFS was introduced by the Government in 1999
To facilitate new and appropriate technology for making the
textile industry globally competitive
Reduce the capital cost for the textile industry.
A sum of Rs. 21,347 crore has been provided as assistance to
the industry during 1999 2015.
It had led to investments worth Rs. 2,71,480 crore
Created job opportunities for nearly 48 lakh people
The scheme was earlier amended for continuation during the
12th Plan.
It also gave a boost to employment generation and exports in
the textile sector in a big way.
6/29/2017 IGTC PGPBA 2016-2018 3
 ATUFS (Amended Technology
Upgradation Fund Scheme)
The ministry introduced ATUFS on 13-01-2016, thus replacing
Revised Restructured Technology Upgradation Fund
Scheme(RR-ATUFS).

Guidelines of ATUFS:
1. Employment generation (Specifically for women )
2. Export encouraging for increasing Indias Share in Global
exports
3. Promotion of Technical Textile
4. Promoting conversion of existing looms to better
technology looms for better Quality and Productivity
5. Encouraging Quality production in Processing Industry
6/29/2017 IGTC PGPBA 2016-2018 4
 The amended scheme is expected to give boost to Make in
India in Textile sector.

It is also expected to attract investment of one lack crore

rupees

Create over 30 lakh jobs.

A budget provision of Rs. 17,822 crores has been approved,

of which Rs. 12,671 crores is for committed liabilities under
the old scheme, and Rs. 5,151 crores is for new cases under
ATUFS.

6/29/2017 IGTC PGPBA 2016-2018 5

 Objective of ATUFS

The government would provide an additional 10% Capital

Investment subsidy (CIS) for made up units who have availed
15 % CIS benefits under ATUFS based on achievement of
projected production and employment after period of 3
years.

6/29/2017 IGTC PGPBA 2016-2018 6

 Indian Textile Industry
Textile sector:
One largest contributors to Indias exports with
approximately 11% of total exports.
Labour intensive
largest employers(employs about 40 million workers and
60 million indirectly)

India's overall textile exports during FY 2015-16 stood at US$ 40

billion

6/29/2017 IGTC PGPBA 2016-2018 7

 Indian Textile
Industry
Segments

Unorganized Sector Organized sector

Handlooms Spinning
Handicrafts Apparel
Sericulture Garments

6/29/2017 IGTC PGPBA 2016-2018 8

 Market Size
The industry is the second largest employer after agriculture

It provides employment to over 45 million people directly and

60 million people indirectly

The Indian Textile Industry contributes :

Approx. 5% to Indias Gross Domestic Product (GDP)
14 per cent to overall Index of Industrial Production (IIP).

6/29/2017 IGTC PGPBA 2016-2018 9

 The Indian textiles industry, currently estimated at around
US$ 108 billion, is expected to reach US$ 223 billion by 2021

6/29/2017 IGTC PGPBA 2016-2018 10

 Major Markets of Indian Textile

Major Markets of Indian Textile and Apparel Exports (2014-15)

6/29/2017 IGTC PGPBA 2016-2018 11

Global Import and Export of Textiles and RMG clothing
WORLD TEXTILE EXPORT
Year to Date: January to October
Rank Country Million United Percentage change
States dollars 2016/2015
2015 2016
1 China 92506 89436 -3.32%
2 US 16875 15474 -8.31%
3 India 16478 15167 -7.96%
WORLD TEXTILE IMPORT
Year to Date: January to October
Rank Country Million United Percentage
States dollars change
2015 2016 2016/2015
1 US 24563 23570 -4.04%
2 China 22214 18178 -18.17%
3 Vietnam 15716 15682 -0.21%
6 Bangladesh 7361 7496 1.84%

6/29/2017 IGTC PGPBA 2016-2018 12

 SPELSGU compliance with WTO Rules
The scheme aims at providing subsidies to Indian textile
Industry

Lowering the prices of Final Product in International

market

But this is not compliant to WTO guidelines which aim at

no Quotas and preferential treatment to member nations

6/29/2017 IGTC PGPBA 2016-2018 13

Anti-Subsidy duties on Indian garments in
Markets like EU
EU is encouraging imports from developing Countries like
India

EU wants to import Textile and Garments from the countries

which are compliant to environment- Beneficial for India

India stands great chance to grab the opportunity as against

Bangladesh due its investment in Technology and the
encouragement in the employment

6/29/2017 IGTC PGPBA 2016-2018 14

 Impact of negotiations of FTA with EU
Negotiations for a comprehensive FTA started in June
2007.
The negotiations cover mainly but not exclusively-
I. Access to each others markets for goods, services and to
public procurement contracts
II. The framework for investment, including investment
protection
III. The rules that frame trade, such as intellectual property
and competition
IV. Sustainable development, to ensure growth in trade is in
tandem with the environment, social and labour rights

6/29/2017 IGTC PGPBA 2016-2018 15

 India has entered into trade agreements with following
countries:

1. FTA : South Asia Free Trade Area (SAFTA), Bhutan, Sri Lanka
2. PTA: Asia Pacific Trade Agreement (APTA)38, Afghanistan,
Chile and MERCOSUR
3. CECA: Association Of Southeast Asian Nations (ASEAN) ,
Malaysia and Singapore
4. CEPA: Japan and South Korea
5. GSP: EU

6/29/2017 IGTC PGPBA 2016-2018 16

 With SPELSGU units coming into picture, Indias negotiations
with EU will have a great impact.

India continues enjoying unilateral trade preferences when

accessing the EU market under the EU generalized Scheme
of Preferences.

The impact of the EU-India FTA on the textiles and apparel

sector in India will be significant in terms of increasing
Market share,
Investment in R&D
Technology transfer,
Efficiency and
Production of economies of scale.

6/29/2017 IGTC PGPBA 2016-2018 17

 It is also expected to result in increased employment
opportunities in India for both skilled and unskilled
workers.

Now with the Brexit, India needs to have a aggresive

dialogue with UK to have a preferential trade
agreement (PTA).

Introduction of ATUFS will accelerate the process of

negotiation and attract foreign investment

6/29/2017 IGTC PGPBA 2016-2018 18

Competitive advantage of Bangladesh, Sri
Lanka, Vietnam and other countries like
South African as compared to India

6/29/2017 IGTC PGPBA 2016-2018 19

6/29/2017 IGTC PGPBA 2016-2018 20
 Joint Venture With Cambodia
Indias and Cambodias bilateral trade has not been fully
explored

There already exists a good relationship of trade between the

two countries , however India is looking at more opportunities
to explore

Cambodia as well is trying to increase the trade with India to

increase its industry

This would ultimately be a win-win situation to India.

6/29/2017 IGTC PGPBA 2016-2018 21

 Government Initiatives

A number of Promotional policies are being introduced by the

government of India

100 per cent FDI in the Indian textiles sector

Investing in to make whole of textile industry integrated with

IT technology

FTA negotiation are in process with EU and USA

6/29/2017 IGTC PGPBA 2016-2018 22

 Key initiatives in the Union Budget 17-18 to boost textile
sector:
Encourage new entrepreneurs to invest in sectors such
as knitwear by increasing allocation of funds to Mudra
Bank from Rs 1,36,000 crore (US$ 20.4 billion) to Rs
2,44,000 crore (US$ 36.6 billion).
Upgrade labour skills by allocating Rs 2,200 crore (US$
330 million)
Announcement of a slew of labour-friendly reforms
aimed at generating around 11.1 million jobs in apparel
and made-ups sectors
Increasing textile exports to US$ 32.8 billion and
investment of Rs 80,630 crore (US$ 12.09 billion) in the
next three years.

6/29/2017 IGTC PGPBA 2016-2018 23

 Scheme Benefits
Bangladesh and Vietnam are in a competitive position in
respect with India right now with their low cost of production
and FTA with developed countries.

But with this new scheme, production cost will decrease

which will promote Indian garments in foreign markets.

Also FTA with developed countries to make trade which is

favorable in India.

6/29/2017 IGTC PGPBA 2016-2018 24

 THANK YOU!

6/29/2017 IGTC PGPBA 2016-2018 25